Ethiopian Airlines’ CEO Mesfin Tasew on roadmap of company

By Nelly Fualdes
Posted on Wednesday, 7 September 2022 13:03

Mesfin Tasew Bekele, CEO of Ethiopian Airlines. ©Ethiopian Airlines

Recapitalisation, diversification, alliances, competition... Six months after taking office, the new CEO of Africa's largest airline talks to us about his roadmap and offers his initial status report.

With Ethiopian Airlines’ 2021-2022 financial year closed on 30 June, its CEO Mesfin Tasew, who wanted to see this accounting year completed before granting his first interview to the press, offered to share a few figures for the continent’s largest airline as well as its roadmap, a little more than five months after taking office.

Boasting turnover of some $5bn, “which is 8% more than what we expected and 26% more than the pre-Covid level”, Ethiopian Airlines has had “a good year”, according to its chief executive officer.

The company, which posted net profits of $937m, carried 6.9 million passengers on its international network over the past year. This confirms its position as one of the world’s top performers, after being one of the very few companies in the sector worldwide to have posted a profit in 2020-2021, and having distinguished itself during the health crisis with its operational agility.

The man who was abruptly recalled to Addis Ababa after the surprise resignation of Tewolde GebreMariam, barely a year after taking over the reins of Asky in Lomé, has spent his entire career with Ethiopian Airlines, a company he joined in 1984 after university graduation, and says he “loves it as much as [his] family”. He was director of operations for eleven years and has distinguished himself as a rigorous manager.

Jeune Afrique: As a new leader, what do you intend to bring to Ethiopian Airlines?

Mesfin Tasew: My predecessors built and carefully implemented a long-term strategy to grow the company and develop skills. I will follow in their footsteps. My ambition is to have taken Ethiopian even further when I hand it over to my successor.

Despite our different characters and personalities, we share the same philosophy of building strong leadership and leading by example to embody the company’s values: agility, integrity, resilience, perseverance…

Ethiopian holds stakes in Asky Airlines, Zambia Airways and Malawi Airlines. It also held a stake in Chadia Airlines, which was liquidated on 4 August, and has announced its presence in the capital of the future Air Congo (DRC) and Air Nigeria, the future flagship of Abuja… Is there any hope that this investment strategy will prove profitable in the medium term?

Since 2010 and the birth of Asky, we have been committed to developing additional hubs in Africa. Asky is doing well and even recorded exceptional profits in 2021. Chadia Airlines suffered a lot, both from Covid and the country’s political instability, so the shareholders decided to place it in liquidation. But Air Malawi is doing quite well, and as for Air Congo, all the formalities have been completed, including the signing of the management contract. We are just waiting for the green light from the regulator to start flying.

In June 2021, the Ethiopian government increased the company’s capital from 2.5 to 60 billion birr (from €47m to €1.13bn), including 18.8 billion (compared to 1.4 billion previously) in cash and in kind. Is this a recapitalisation?

Yes, our assets have increased in value, so the capital has since been further increased to 100 billion birr, and we have asked the state, our sole shareholder, to increase it to 300 billion.

After Vision 2025, is a new business development plan on track?

We have launched Vision 2035, which is a sort of intensification of Vision 2025, and therefore consists of building growth that is both rapid and sustainable, still based on the same five pillars: fleet modernisation, infrastructure development, human resources development, information technology and sustainability.

The Covid period highlighted the strategic interest of cargo, on which Ethiopian had already been focusing for several decades. What is the current share of this activity in the company’s balance sheet?

Before Covid, cargo accounted for 15% of our business. In 2021-2022, this share has risen to 59%, because during the crisis we converted 25 passenger aircraft to all cargo. Today, the demand for cargo has slowed down internationally and 14 of these aircraft have returned to their original functions. So, infallibly, the cargo share will go back down. Nevertheless, we are continuing our momentum: we have ordered new freighters [an order for five Boeing 777 freighters was unveiled by the company at the end of May] and are working to expand our network.

Your predecessor Tewolde GebreMariam felt that competition was somehow distorted by the Gulf airlines, which have access to fuel at unbeatable prices. Has this situation worsened further with the current jet fuel crisis?

Ethiopian operates in an internationally competitive environment, where every terrain has its advantages. Being a landlocked country and not an oil producer, Ethiopia is faced with very high fuel prices, which is also the case for many of the countries we fly to. We try to counterbalance this difficulty with our advantages, which include our technical and operational skills.

On an African scale, do you see the new proposed alliance between Kenya Airways and South Africa Airways as a threat?

What South African Airways and Kenya Airways are doing is similar to what we did with Asky. On the other hand, our neighbour Rwandair is joining forces with Qatar Airways… We have nothing against cooperation projects, especially in Africa. We will strive to continue to grow our company in a global context.

With other African airlines, we are in competition on certain routes, but there are also areas where we can cooperate, such as maintenance or training. Rwandair, Jambojet, Air Peace, Arik Air, Camair-Co and Angola’s Taag use our maintenance centre.

In terms of training, how many students does the Ethiopian Academy accommodate?

The Ethiopian Academy can accommodate up to 4,000 students at any one time, all courses combined. Because of this, and also because we have not made anyone redundant during the crisis, we do not have the labour problems reported by the media in other parts of the world. However, we still need manpower because the company is still growing.

Is this academy a requirement for joining the company?

No, I didn’t come from there [Tasew has a bachelor’s degree in electrical engineering from Addis Ababa University, a master’s degree in electrical engineering with a speciality in communications from the same university, and an MBA from the Open University in the UK]. While 90% of our pilots and almost all of our cabin crew have been through this academy, it is not a prerequisite. The top management has a more varied background.

In recent years, Ethiopian has also diversified into the hotel business with the opening of a 5-star hotel, Ethiopian Skylight Hotel. Is this a business that you want to strengthen?

We want to build a group that supports all activities related to the airline: the company, of course, but also MRO [Maintenance, Repair and Overhaul], the Academy, catering… Opened four years ago, the hotel is the latest branch. It has 373 rooms, and we have a 650-room extension planned, which is due to open in January 2023 – we will then have over 1,000 rooms. We also have a 95-room project within Bole Airport itself, in the international area, for transit passengers.

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