By Kaleyesus Bekele

The Ethiopian Airlines is to implement a new restructuring program that will transform it into an aviation investment group.

The management of Ethiopian recently developed a 15-year development strategy dubbed “Vision 2025” aimed at making the airlines a world-class airlines.

Reliable sources told The Reporter that the main objective of the development strategy is to restructure the national flag carrier into an aviation investment group which will have six subsidiary companies. The executive said Ethiopian will commercialize its different departments,
including the Maintenance Repair and Overhaul (MRO) Center, Cargo Service, Catering, and Aviation Academy.

Based on the development plan, under a parent company Ethiopian will have six different business units. The domestic flight service will be incorporated as a new domestic airlines that will have its own management team. The domestic airline (Et Domestic) will feed passengers to the major airline that will render international flight services.

The second subsidiary company will be ET Technical. By commercializing its maintenance and engineering department, ET Technical will be a separate business entity that will provide line maintenance, repair and overhaul service to ET domestic, ET International and other domestic and international carriers. ET’s MRO center is certified by the Ethiopian Civil Aviation Authority, FAA, Boeing and Pratt and Whitney. The MRO center has been providing repair and overhaul services to major African and Middle East carriers.

In 2006, Ethiopian inaugurated a new maintenance hangar at its hub at the Addis Ababa Bole International Airport built at a cost of 6.4 million USD by a Chinese construction firm called CATIC. With the capacity to handle aircraft as big as the B-747, the hangar covers 7,200 sq.m. As Ethiopian placed firm orders for 37 jetlinners - 10 B787, 10 B737-800, 12 A350XWB and 5B777 - it is planning to build another maintenance hangar that will accommodate the new fleet. Ethiopian recently acquired six Bombardier Q400 aircraft and two more are coming by the end of this year. Staffed by more than 550 certified technicians and engineers, Ethiopian MRO center provides maintenance and overhaul services for B-767, 757,737,727,707, DH6, ATR42, Fokker50 and L-100. Ethiopian provides MRO services to 67 airlines from Africa, Europe, the Middle East and Asia.

Ethiopian will also incorporate its Cargo department into a new company dubbed ET Cargo Services. The company envisions making Addis Ababa an African cargo hub. ET Cargo will transport cargos destined to Africa from Europe, the Middle East and Asia to Addis Ababa and then from Addis Ababa it will haul the cargo shipments to different African countries. ET Cargo will strive to have a major market share in the African cargo business. Ethiopian cargo has two B-747F, 2B-757F and 2 MD11F. With cargo aircraft, Ethiopian has the largest cargo fleet in Africa.

In May 2006, Ethiopian inaugurated a new cargo terminal built at the cost of 30 million USD. The cargo terminal on 1,400 sq.m of land has the capacity to handle 250,000 tonnes of cargo per annum.

The Ethiopian flight school and the aircraft maintenance technicians training center will also be upgraded into an African aviation academy that will operate as a separate business unit. The pilot and technicians training schools have been training Ethiopian and foreign nationals, mainly from African countries. The aviation academy will increase its capacity and expands its market share by admitting more trainees from African and Middle East countries. In addition to basic flight education it will render simulator training services to Ethiopian and foreign pilots. The flight school has simulators of B-767, 757 and 737. It is planning to acquire B-787 simulator in the near future.

The other subsidiary company will be ET Catering which will provide in-flight catering services to ET Domestic, ET International and foreign carriers.

The other business unit is Ethiopian core business, marketing passenger. This is Ethiopian national flag carrier that will provide international flight services in Africa, the Middle East, Asia, Europe and North America.

An Ethiopian industry analyst lauded the development strategy developed by the management of Ethiopian. The analyst said that commercializing the various business units such as the MRO and cargo service is the order of the day in the global airline industry, adding that Egypt Air and South Africa Airways have done the same.

Sources said the management of Ethiopian would soon appoint new executives. Some Ethiopian senior executives have been transferred to ASKY Airline (a newly-established private airline in West Africa in which Ethiopian has a 25 percent stake) and Nigerian Airways. According to sources in the management, new appointees will be assigned in the vacant positions.

With the 15-year development program Ethiopian plans to boost its annual revenue to 10 billion USD from the current 1.3 billion and the number of aircraft to more than 100 from 43. The national flag carrier has attained its five-year development plan “Vision 2010” by raising its annual revenue to one billion USD.

EthiopianReporter