In Africa, the aviation industry operated well below the growth of the other aviation markets in the world. The airlines that operated in Africa were under-capitalised and operated on a narrow network with small and aging fleet of aircrafts.
November 14th 1999 – ‘The Yamoussoukro Decision’ (YD) to liberalise the air transport market access in Africa was adopted. The YD was signed by 44 African nations in order to foster the regional air markets and deregularise air services in the continent.
The overall success of the numerous initiatives was ‘too little and too slow’ due to political, procedural and institutional constrains. Govts. Need to look at their policies and reduce some of the bottlenecks the airline sector is facing. Cost of doing business in this sector is too expensive.
IATA urged African governments to focus on the development of the aviation industry at national level on priority.
Due to ‘policy failure’, by the end of 2016, ‘less than half of the continent’s countries’ were interconnected.
African aviation industry was characterised by poor connectivity, weak infrastructure, low passenger volumes and high-ticket prices. Growth of the industry was adversely impacted by the complex rules and regulations, lack of political willingness to develop the industry and monopolies of loss-making national carriers.
EAG owned by the Govt. became the largest domestic African carrier by fleet and no. of intl. destinations. 1st airline in Africa to operate 100 aircrafts.
Key challenges of African airlines – The growth is heavily constrained by the high industry costs, inadequate infrastructure at several airports, slow implementation of the Yamoussoukro Decision (liberalization of Africa’s airspace), lack of a single traffic rights negotiating body with respect to third parties like the EU.
High taxation imposed on aviation fuel in Africa meant that operating costs of African airlines are among the highest in the world. Airlines on the continent are served by costly monopolies at the different airports including catering services, logistics management etc. Limitation of airports with many countries having one operational international airport means that airlines don’t usually have the luxury of operating away from an airport served by an expensive service provider.
EA was also able to leverage Ethiopia’s economic progress. Thought beyond profit making and created market opportunities for hotels and other businesses across Ethiopia.
With such healthy financial position, EA pursued a strategy of acquiring stakes in the defunct airlines and other operational airlines. EA acquired minority stake in Malawi Airlines (in 2013) in order to create a base for its operations in Southern Africa. Entered into an agreement with Zambian government to again start country’s defunct.
2017 – EA became Ethiopian Airlines Group with various strategic units such as Ethiopian Airports Enterprises, Cargo Airline and Logistics Company, Ethiopian Aviation Academy, Passenger Airline, Ethiopian MRO Services, Ethiopian Inflight Catering Services, and Ethiopian Hotel and Tourism Services etc. came under EAG for a seamless customer focused service.
Even tough EA was state owned, it was not state run. The Ethiopian govt has have allowed the national airline to be run by competent management and dedicated staff.
EA had established Ethiopian Aviation Academy, a training institute in order to bring self-sufficiency and professionalism by providing comprehensive training for marketing, ground operations, cabin crews, aviation maintenance technicians, and pilots to have a steady supply of manpower.