Hailu: Our Brand Is Stronger Despite B737 MAX Crash

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Esayas WoldeMariam Hailu

Managing Director, Ethiopia Airlines International Services, Esayas WoldeMariam Hailu spoke on the impact of the Boeing 737 MAX crash on March 10, 2019, the allegiance of the airline’s customers and the support it garnered from all over Africa after the accident. Hailu, who granted interview to some Nigerian journalists in Addis Ababa, Ethiopia, also unveiled future plans for the Africa’s most profitable airline. Chinedu Eze brings the excerpts:

What has been the impact of the B737 Max-8 air crash on the operations of the airline and how has it been able to weather the storm following the incident?
We have a high respect for the general Nigerian public, its government, travelling public and the Nigerian media because they have been standing by our side during those hard times. The sense of allegiance within the continent was superb and we are grateful for that. Some of the impacts include the lost lives of our passengers and our crew. These are irreplaceable human lives and it has been so depressing. It was an emergency situation for the first one week after the accident, as we were eating at the accident scene, sitting there and handling everything. We were dedicated to the media, the logistics, and the rescue and search operations amongst others. Secondly, the aircraft was lost. One out of the five B737 Max aircraft we had was lost. Thirdly was our brand but we found out that our customers had a good sense of allegiance towards us and everybody knew that it was from the design deficiency and even Boeing came out to apologise officially.

Western media had this habit of parading the African company or brand as not competent enough. At last Boeing and Federal Aviation Administration (FAA) acknowledged that it was a design problem. Our brand emerged even stronger because the confidence of the travelling public to travel using our airline has not been affected. It has, however, impacted us in a way that the rest of the aircraft have been on ground. However, because we have over 100 aircraft, we have been switching one aircraft from the other.
The second reason is that March to May was a slack season in our operation, so we could manage with the available fleet in our possession. June to September is peak season in our operation, so we are considering all options to mitigate aircraft shortage we may face during this period. In the future we are going to receive the rest of the order to have a total of 27 MAX aircraft but this will only be determined with the outcome of the adjustment of this aircraft system and FAA accrediting it and all airlines flying it.

Ethiopian Airline has vowed to be the last airline to fly that aircraft after the entire world has tried, tested and trusted it. So, the impact has not been easy but with all the support and patronage of our African brothers and sisters and the international community, our brand has emerged even stronger.

If FAA Certifies Boeing B737MAX 8 for operations, would you start its operation immediately or will your pilots undertake more training?
When Boeing does any system adjustment, FAA has to review, audit, test and accredit. After that, the America carriers, China carriers, the European carriers, and the rest of them will have to use it. We have fulfilled all the requirements and by the way, we even have a simulator. American carriers are operating that aircraft but many of them do not even have simulator for the B737 MAX but we have. So, all our pilots have gotten all the requirements. So, after everyone has flown it, we will fulfill all the additional requirements, and then we will fly it. Like I said, the problem is with the design of the flight control system of the B737 MAX and its redesign is under review by regulatory bodies and stakeholders.

If you have a choice, will you rather think of another aircraft type than a MAX 8?
Each and every aircraft type has got its own mission. Some are for long rage, some for medium and some for short range. Some are high-density aircraft. MAX is designed to be fuel efficient. It is economical. So if Airbus brings something equivalent to the MAX aircraft’s mission, definitely, we will use that also. Our fleet is highly diversified both from Airbus and Boeing.

We have Boeing 737-700 and 800; B777, B787 and Airbus A350 amongst others. We have a mixture of long- and short-range aircraft and various density classes. All these aircraft are for different missions. So, if there is any other aircraft, which fulfills the same mission and economics, we are going to take it. As I speak to you, the age of our average fleet is four years. Ethiopian Airline is the first airline to introduce jets into the African skies. The B707s, B767s, B757s, B787s and the B777; we were the first to bring these aircraft into the African skies. This is to give good value preposition to our customers and to be able to compete in the global aviation market. Of course, it is very expensive to buy an aircraft. Only one single aircraft can cost over $150 million. We have a commitment to give a dependable, global standard air service. We have good fleet diversification, simulators, trainings and accreditations. We train our people, our pilots, flight engineers and those from other African carriers.
We not only fly our aircraft, we maintain them. We do all engine maintenance and aircraft maintenance for our service and other carriers. So we train pilots, mechanics, hostesses, cargo logistics, marketing amongst others. So our training centre is also registered by International Air Transport Association (IATA), and International Civil Aviation Organisation, (ICAO). We lay emphasis on training and bringing the best of knowledge.

What do you think of the upcoming Boeing 777X. Do you have any plans of ordering them as a replacement for the current Boeing 777 fleet?
B777X could be a great aircraft, and we are evaluating it as possible replacement for the existing 777 fleet. If the outcome of our evaluation shows that aircraft is very good and can achieve the mission we have for our network, then definitely, we are going to take it.

What is the 2019 end of year projections of Ethiopian Airline and what plans do they have for your operations in Nigeria?
We have a couple of plans. First of all, we fly into four gateways into Nigeria, which are Kano, Enugu, Abuja and Lagos. This is because we want to give the best value prepositions to our customers. Many people fly from various parts of Nigeria to Lagos. The Murtala Muhammed International Airport (MMIA) processes a huge number of passengers and finding parking space, slot, arrivals and departures, embarking and disembarking people takes time. So, to reduce the burden of the Lagos airport, we decided to diversify the traffic. When we airlift people from different parts of the country, it is easier for the passengers. We used to fly into Kaduna. We did this for some time but the traffic volume hasn’t been forthcoming. We have been developing the route at our own costs. Because Kaduna is in between Kano and Abuja and we fly into these two places, the economic sense has not been guaranteed. If the economics is eventually justified, then we are going to go there. For 2019 projection, the second frequency to Lagos is being planned. There is also a plan to connect Lagos across the Atlantics to the United States. All these plans are subject to the approval of the Nigerian government.

What has been the secret behind the success of Ethiopian Airline and how can other African airlines learn from you?
The first is our long-term planning. Ethiopian Airline has always had vision 2010. We upgraded to vision 2025 and now we are up scaling it to vision 2055. Long-term planning requires fleet planning, route planning, human resource planning, systems planning, facility planning, the ground handling, the catering, and the cargo planning, amongst others. Everything must be planned for. We have to plan for the appropriate type of fleet and you have to plan your order in advance. Aircraft is produced by order and not like cars where you go to the show room and pick it. So all these require planning and our long-term planning has always been the root of our success.

Secondly, the autonomy of the airline despite its government ownership is key. The airline is allowed to run on its own and in in accordance with industry rules and regulations without meddling on its commercial decisions and its day-to-day running whatsoever. Thirdly, we always emphasize on new technologies and these new technologies are part of the success. We always bring in new aircraft and young fleet. This is also part of the success. The management’s prudence and the strict corporate governance of the management is key. When it comes to safety, security and transparency, we don’t compromise. So these are some of the elements that are part of the successes of Ethiopian Airline. So, whatever we prescribe, we also share experiences with our fellow African brothers and sisters in those small airlines we are setting up in Africa. We are also trying to sell this model to them. For example, a big executive of Ethiopian Airline travelling for a business trip, if he takes cash advance, when he comes back, he gives a report on expenses and returns the remaining cash to the company. So, this is part of the success factor.

What are the contributions of Ethiopian Airlines and its affiliate companies to the gross domestic product (GDP) and the economy of Ethiopia as a country?
For Ethiopia’s GDP, the airline’s contribution is hardly up to four per cent of Ethiopia’s GDP because Ethiopia’s annual budget is $350billion. On the other hand, Ethiopian Airline annual revenue is about $4.5billion. With the passengers and all the other Ethiopian Airlines’ group is about $5 billion revenue per annum but at the end of vision 2025, we hope to generate revenue of $10billion. We hope to double our revenue.

Is there any partnership plan between Ethiopia Airline and the Federal Government of Nigeria on the proposed Nigeria Air and what is your advice to the Nigerian government on their quest to float a national carrier?
There have been attempts to float a national carrier by the Federal Republic of Nigeria. So far, we have not been picked but we are able, capable and ready and whenever the vacancy is created, we are ready to come and partner on this. Secondly, Nigeria has been a very big host. By the population of the county, which is by demographic data, the most precious kind of resource is the human resource. Nigeria being the largest Africa population and the largest economy, the mobility is very high, domestically and overseas. As a result of these, Nigeria really needs a national carrier. We wish them all the best and we are ready and willing to support them on this. Any partnership, which arises from that, is most welcome and we are expecting that.

What is the latest on your talks with the Ghanaian government on partnerships to float a national carrier for Ghana?
The initial memorandum of understanding (MoU) has already been signed and whenever our legal team finalises, we are going to be signing.

Airlines have been accused recently of conniving with baggage handlers at the airport to plant illegal items (illicit drugs) on passenger baggage. What measures has Ethiopia Airlines put in place to prevent this kind of untoward practice and safeguard the integrity of your operations?
We are always very serious about the security of our operations and customers. We have discussed with all the authorities on how the process of baggage screening should be done in a way that ensures safety is at the peak. We together with other airlines, ground handling companies and the security companies, raised the need for scanning machines, sniffing dogs at the airports, which should be arranged by the authorities. We have also placed strict control on the ground handling companies and the security companies as well. The check lists we are using includes sensitising all handling staff to strictly follow the standard passenger check-in procedure, interviewing all passengers in regards to their baggage and asking questions relating to who packed the luggage and details at point of check-in, ensuring passenger appear themselves for check-in of baggage, ensuring security company searches all bags, proper supervision and control are in place at the baggage area and tightening the security check and additional security check at transit (ADD).

The International Air Transport Association (IATA) usually talks about Radio Frequency Identification Device (RFID) for baggage tracking. Are you going to adopt this?
Ethiopian Airlines is one of the founding members of IATA and Tewolde GebreMariam, the CEO of Ethiopian Airline, sits on its board of governance and he has just been re-elected. So any IATA initiative is also part of our initiative because IATA is a consortium of airlines. Whenever there is a migration from paper ticket to E-tickets, or any other development, we are always up to the tune and we comply.

What are your suggestions on ways forward for the growth of African aviation industry?
We believe that Africa needs to liberalise its sky if the full potential of African carriers are to be unleashed. Open sky policy is in the best interest of African airlines as it boosts their efficiency by reducing the high operational costs such as high airfares and airport charges. Liberalised airspace will also help strengthen collaboration among the carriers towards claiming the market share they deserve. Ethiopian Airline has been advocating for the implementation of the Single African Air Transportation Market (SAATM) as per the Yamoussoukro Decision. So far, a number of African countries have signed SAATM, which, once implemented, will drive down airfares by allowing carriers of signatory countries to freely access each other’s airports.

How have you been able to take advantage of the growth of your aviation to grow your tourism industry?
With the growth of aviation service, there is better opportunity to promote Ethiopia as a tourist destination among tourists. The growth of aviation is positively contributing to tourism industry through availing better connectivity to different tourist destinations in Africa and beyond.

The Single African Air Transport Market (SAATM) seems to be following the way of Yamoussoukro Declaration as many states fear that established airlines like Ethiopia Airlines, Egypt Air, Air Maroc would take advantage of it at the expense of new national carrier start-ups. Do you have reasons to allay these fears?
The SAATM is one of the flagship projects of the African Union’s Agenda 2063. It will ensure that aviation plays a major role in connecting Africa in order to achieve social, economic and political integration and boost intra-Africa trade. SAATM was launched by the African Union Heads of State and Government in January, 2018. There is an unrealistic fear that the established airlines like Ethiopian, Egypt Air, Air Maroc would take advantage of it at the expense of new national carriers. However, this allegation is baseless due to the following reasons:

African Union has competition rules that prohibit any agreement or practice that negatively affects the liberalisation of intra-Africa air transport services and which has as its object or effect on the prevention, restriction or distortion of competition.
Secondly, in air transportation service Africa is underserved, compared to other regions. African carriers, all combined, cover less than three percent of the world’s air transportation. Similarly, African carriers’ market share in their home market, Africa, is only less than 20 per cent while the remaining is being taken up by the non-African carriers.
SAATM in this regard, proposes African countries to open up their skies for African carriers so that tax and related burden on the African national carriers will ease and countries get motivated to embark on same.

Nigerian market seems to be one of the greatest contributors to your earnings. Do you have special products or services for travellers on this route as a reward for loyalty and patronage?
Ethiopian Airline has been serving the Nigerian public since independence and has never stopped its operation. We always give the best to our Nigerian travellers by deploying the most modern, newest aircraft from our fleet collection, availing them the best and short connections to more than 120 destinations, availing attractive promotional fares and packages (for tourism travellers) to all our destinations, and allowing E-visa and on arrival visa facility.

How effectively has your e-visa process contributed to the tourists’ arrival in Ethiopia and how has it helped to open new vista of opportunities for tourism value chain in Ethiopia in terms of hotels, tour operators, sites visit, airport pickups and others?
The e-visa service has eased travel to Ethiopia by streamlining the travel process. It reduced waiting for visa, delays and cancelations. We are now working on offering tourists attractive packages so that they can extend their stay in the country and visit more tourist destinations. The automated visa service has contributed to Ethiopia’s tourism significantly.

How has the multiple routes operated by Ethiopia Airlines in Nigeria (Abuja, Enugu, Lagos and Kano) scaled up passenger patronage?
Ethiopian Airline is the only airline that operates four destinations in Nigeria, which gives better choice for the travelling public. A passenger based in Enugu was supposed to take domestic flight or take a long drive to fly international routes but since Ethiopian Airline started the flight, all this suffering stopped and they can easily take the flight from their hometown. We fly daily from Logos and Abuja and three times weekly from Kano and Enugu, all independent flight. So these flights are serving the public by connecting them to the rest of the world.

Your all-women flight crew has gained tremendous applaud from around the world. What is the rationale behind it?
The flight is aimed at highlighting that women are capable of doing what men can do as long as they get the opportunity. We believe that such an initiative will go a long way towards inspiring girls in Africa and beyond to dream big.

What is new about the New Spirit of Africa at Ethiopian Airline, in terms of in-flight entertainment and services?
As part of its continuous efforts to provide the best possible inflight service to its passengers, Ethiopian Airline has been taking different measures. Internet Wi-Fi connectivity is being rolled out on its A350 aircraft – so far Wi-Fi has been availed on three aircraft, Wi-Fi steaming on passengers’ personal devices has been implemented on 3 B767 aircraft and installation has been finalised on few B737-8 aircraft.

We have increased our TV series contents to 131 movies from the previous 83; we also plan to increase Hollywood Blockbuster movies from 16 to 26 in the coming budget year.
Currently we have a mix of inflight entertainment content which includes: 16 HW movies, 50 International movies including Asian (Chinese, Korean, Japanese, Indian, Arabic), Africans (Amharic, English African and French African) and European (Italian, Portuguese, Germany, Spanish and Brazilian), 131 channels of TV program, 42 documentaries, 10 Kids movies, 71 Classical, 500+ CD tracks on all B777, B787 and A350 and 12 channels of compiled audio on the remaining aircraft and 10 audio books on all B777, B787 and A350.