Building Africa’s Fastest Growing Airline
The Rise of Tewolde Gebremariam and Ethiopian Airlines
Ethiopian Airlines has been on an unstoppable growth spurt. The airline, which was founded in 1945, is Africa’s fastest growing and most profitable airline. From its first flight in 1946 on the Douglas C-47, the airline has achieved many milestones to become Africa’s leading airline. The airline’s growth story has been marked by an aggressive investment strategy in its fleet, a strong technology focus, expansion of the number of its routes, and an ambitious acquisitions strategy which has often involved starting new airlines around Africa. From 2010, Ethiopian is said to have seen annual growth of over 20% and is set to see growth of up to 11 million passengers per year. It has also been on an aggressive drive to build its fleet to 110 planes.
The man behind much of this story is the company’s CEO, Tewolde Gebremariam. Tewolde, a long time company veteran, has risen through the ranks to its helm. Tewolde began his career in the cargo handling department. He later moved through the ranks through a variety of departments such as marketing and sales and overseas management. Prior to becoming CEO, he served as the company’s Chief Operating Officer. He graduated from the Addis Ababa University with a Degree in Economics and a Master’s in Business Administration from the Open University in the United Kingdom. As a prominent business leader in Ethiopia Tewolde sits on the boards of many of Ethiopia’s largest companies. Under his leadership Ethiopian has bagged numerous industry awards and launched an ambitious growth strategy.
In 2010, Ethiopian launched a 15 year expansion strategy to drive its sustained growth. Part of that strategy has involved acquiring stakes in airlines on the African continent in a bid to expand the airline’s network. As part of this growth plan the company helped to launch ASKY Airlines in Togo followed by an acquisition of a 49% stake in the Malawian national carrier in 2013. The airline has been in talks with countries such as the Democratic Republic of Congo and Djibouti regarding the development of strategic partnerships to create new airlines or establishing new routes in those countries. Ethiopian has also been reportedly seeking joint venture opportunities for setting up airlines in Guinea and Equatorial Guinea. The company is also reported to have similar plans for Mozambique, Chad and Central Africa. A notable part of this strategy has been the company’s effort to instil Ethiopian’s culture in the new airlines in which it takes stakes in.
Under Tewolde’s leadership, Ethiopian airlines, is making these strategic moves with an eye on the key trends taking place on the continent and which are likely to affect the aviation market. For instance the continent is abuzz with talks of accelerating regional integration. Along with this has been talks about the creation of a single African aviation market. These and other changes are contributing to a growth in air traffic in Africa which is projected to grow at 6% per year. Tewolde and his team are evidently seeking to gain a significant share of this market with an increased number of flights across Africa’s growing cities by establishing regional hubs. The hubs are widely seen by analysts as gateways into strategic regions whose markets the airline would like to develop. Thus the airline which Ethiopian establishes in Chad is designed to draw passengers from the Central African Republic, Niger, Northern Nigeria and Sudan.
Tewolde is also leading the airline at a time when other competitors such as South African Airways and Kenya Airways have been having challenging times having been on a money losing streak. At the same time there has been increasing competition from non-African carriers such as Emirates and Turkish Airlines which have been grabbing an increasing share of the market. Ethiopian Airlines seems intent on keeping and even growing its share of the market from these new competitors Tewolde has received numerous recognitions for his work. These include Best African Business Leader, African CEO of the Year, and The Airline Strategy Award for Regional Leadership. The Leading Women of Africa Group also awarded Tewolde the Most Gender Focused CEO Award for 2015. And in spite all of these accolades and milestones, the trailblazing CEO’s work of building the continent’s most successful airline looks like it is only getting started