Ethiopian Airlines is pursuing its “Vision 2035” growth strategy in the face of high inflation, post-pandemic competition, and a shifting airline market.

With a larger fleet and more passengers than EgyptAir and Kenya Airways combined, Ethiopia Airlines is by far the largest airline in Africa. It was one of the few organizations in the world to have survived the COVID-19 pandemic without the aid of the government or job cuts.

As CEO Mesfin Tasew, who assumed the position in March 2022, says, the airline is currently confronted with new challenges in a rapidly evolving environment.

Mesfin claimed that the fiscal year 2022–2023, which ended on June 30, “was a very prosperous year.”

“We carried 13.7 million passengers, 57% more than the previous year and 10% more than before Covid [as well as] 740,000 tonnes of freight, twice as much as before Covid,” claims Mesfin.

In order to demonstrate that “we have fully recovered from the impact of Covid,” Mesfin quotes Ethiopia’s state-owned airline, which prides itself on being the only profitable airline in Africa, as having generated “6.1 billion dollars in turnover, an increase of 20% over the previous financial year and almost 50% over the pre-Covid period.”

Effects of pandemic still present
Mesfin emphasizes that the pandemic’s consequences are still being felt, citing “high inflation” as a result of the disease, which “translates into high operating costs, high fuel prices, and many countries still recovering from Covid and whose economic growth remains weak” globally.

Ethiopian carriers is affected by the same shortage of replacement components as other carriers.

According to the CEO, the epidemic caused a disruption in the supply chain, which has not yet fully recovered. As a result, aircraft have occasionally had to be grounded while waiting for components.

The issue should be resolved in two to three years, but right now it’s a significant challenge.

The “increased competition” that comes with post-Covid activities is a different issue.

Airlines had been working hard in previous years to recover from the effects of Covid, but today, he says, “most are very optimistic and have ordered a large number of aircraft.”

This “will result in a dumping of available seats, which will reduce yields and intensify competition on ticket pricing. To be competitive, Ethiopian Airlines will need to reexamine its cost structure and put a lot of effort into cutting costs.

claims of discrimination
A civil court in Ethiopia is currently hearing “discrimination” cases against the corporation.

Following the two-year conflict between the regional government and the Ethiopian federal government, a human rights organization has accused Ethiopian Airlines of taking discriminatory actions against travelers from the Tigray region who wanted to fly to Addis Abeba.

The business has refuted the accusation that it transported soldiers and equipment from the Ethiopian army to Tigray during the conflict.

Future expansion
Mesfin claims Ethiopian Airlines is committed to pursue its growth strategy despite the many difficulties.

According to the “Vision 2035” strategy plan, which was unveiled at the end of 2022, the number of passengers will increase by four times, to more than 60 million, by increasing the number of foreign destinations from 130 to 207 and the fleet from 140 to 271 aircraft.

Mesfin claims that the business is “currently developing a sustainable development strategy” at a time when the airline industry has set a goal to reduce its carbon emissions to zero by 2050.

SAF, or sustainable aviation fuels, are necessary to achieve this.

Studies reveal that the use of sustainable aviation fuel (SAF) will account for more than 60% of the decrease in these emissions.

Both its supply and its price, which is two to four times more expensive than paraffin, present issues for all airlines.

Mesfin notes that paraffin “accounts for about 40% of our costs” and that “today, there are a few producers [of SAF] in Europe and the US, but none in Africa.” Using SAF at the current cost would increase our costs significantly.