Sub-Saharan Africa's only profitable airline reveals success formula

29 Aug 2014 - by Adele Mackenzie

Thanks to a concerted drive to
help grow regional and global
trade, Ethiopian Airlines was
the only airline of the top three
in sub-Saharan Africa to make
a profit over the past three
years.
The other two – Kenya
Airways and South African
Airways – joined
the rest of the
region’s airlines
in suffering
cumulative
losses in the
period 2011-
2014.
“Ethiopian
Airlines (ET)
has the largest
cargo fleet in
Africa and part
of its success
lies in the fact that it worked
with exporters and importers
to grow trade, recognising
that trade would help grow the
country and subsequently the
airline as well,” said Zemedeneh
Negatu, managing partner at
Ernst & Young (EY), Ethiopia.
Speaking at last week’s
International Air Transport
Association (Iata) Aviation Day
Africa conference in Sandton,
he said that the country’s
exports were not dependent on
commodities but that currently
its greatest
export product
was aviation
services due
to the route
connectivity it
had established.
“The airline
also helped
grow the
Ethiopian
flower export
industry to
what it is
today because of its global
route network,” said Negatu.
According to Consultancy
Africa Intelligence (CAI),
Ethiopia has become the
second-largest flower exporter
in Africa (after Kenya) with
speculations of increased
future growth. Export value
earned is expected to rise up to
US$ 550 million by 2016, said
CAI earlier this year.
Negatu noted that
working with other business
stakeholders, as well as
government, to meet the
collective objective of
improved trade growth
through increased regional,
local and international
connectivity was one of the
keys to an airline’s success.
“Airlines must collaborate
to ensure greater regional
liberalisation of skies. Africa
and emerging Asia offer
the greatest trade growth
opportunities, yet the SSA
region’s intra-Africa trade
currently still only amounts to
10-12%,” he said.