Aviation – Africa from above

The rapid rise of Ethiopian Airlines is an impressive success story. Now the government wants to sell a minority stake – an opportunity for investors.

It was an evening when it quickly became clear that the management of Ethiopian Airlines does not do things by halves. The first flight from Addis Ababa had just landed in Asmara, with Ethiopians and Eritreans in their arms, separated by war and hostility for two decades. “It’s a historic day,” said Tewolde Gebremariam, the head of Ethiopian Airlines, in front of a few hundred guests this July in a hotel in Asmara. The then the glasses lifted on the historical event. There was Ethiopian beer and wine from the neighboring country, and the food had brought the Ethiopians along with the embassy, ‚Äč‚Äčalso want to participate in the national airline Eritrean Airlines. If you are already here. After the long banquet speech from Tewolde, many guests did not know what was actually celebrated – the historic peace agreement or the brilliant business of Ethiopian Airlines.

Tewolde has been managing Ethiopian’s business for seven years, and since then, the number of airplanes and passengers has tripled: with 100 aircraft, 120 international destinations are served and 10 million passengers are transported. For several years, Ethiopian has also been a member of the Star Alliance, which also includes Lufthansa. It is one of the biggest success stories in Africa. Who has managed to do so without help from the outside and shows what is possible when a company has a clear goal and can pursue it without too much corruption and state disability. The government of Ethiopia has hitherto allowed the airline to operate autonomously, but now wants to sell a minority stake to raise funds for further investment.

This is the first time that Ethiopia has offered foreigners participation in state-owned enterprises. Young Prime Minister Abiy Ahmed, who has been in office since spring, is reforming the country at a breathtaking pace and wants to open it up to investors.

The Post subsidiary DHL set up a joint venture with Ethiopian’s freight division just a few days ago. The two companies already worked together before that. With pretty impressive results. If you give up a package on Addis Ababa on Monday afternoon, you usually reach your customers in Cape Town on Friday mornings over a distance of 5200 kilometers.

Also open to participation is Ethio-Telecom, the state telecommunications company, which has a monopoly in mobile communications. Gerd Müller, the Federal Minister for Economic Cooperation, was in Ethiopia and hopes for more investment by German companies. “In Ethiopia, there are huge opportunities for the German economy, which is a country with 100 million inhabitants and great momentum for reform.” Prime Minister Abiy Ahmend wants German companies in the country, for example, Telekom could participate in state-owned telecommunications company Ethio-Telecom I will talk to the Telekom.”

Ethio-Telecom is one of the poorly managed companies. Even in the megacity of Addis Ababa, you can only buy sim cards from a handful of places in Africa, which have overslept important payment systems in Africa.

Anders Ethiopian Airlines, which has to correct its goals every year – upwards. “This is all the more remarkable because Africa is not the easiest continent for aviation,” says CEO Tewolde. Although most African countries have been known to open their airspace, in practice there are many small states that want to protect their tiny airlines from too much competition or start their own airline.

Instead of waiting for eternities on land rights and concessions in other states, Ethiopian Airlines has now begun to take over or take over smaller airlines: Malawi, Chad, Zambia, Guinea and Togo. At monthly intervals, new alliances are being announced. Ethiopian has a functioning management, which is popular in many countries. Nigeria, the most populous country in Africa, has not managed to build a functioning airline despite its billions of oil revenues, and all attempts failed after a few years. Now talks are being held with Ethiopian.

No bad times for the entry of an investor. In the past fiscal year Ethiopian made a profit of 210 million euros with a turnover of 2.8 billion. It should be even better next year. The new part of the airport has just been inaugurated in Addis Ababa.