Ethiopian Airlines is in process to join the star alliance group.

Dino D'Amore
By Dino D'Amore September 27, 2010 14:29

Ethiopian Airlines is in process to join the star alliance group.

A senior executive at Ethiopian Airlines told Aviation News that 28 CEOs who are members of the Star Alliance group will come to Addis Ababa on Tuesday (Sept 28). The executive said the CEOs will deliberate on Ethiopian Airlines application for membership on Wednesday (Sept 29) in Addis Ababa. The CEOs are expected to give a nod for Ethiopian’s request for membership. According to sources, Ethiopian will most probably join the group by end of 2011.

The Star Alliance has 28 member airlines and two of them are African carriers – Egypt Air and South African Airways. Ethiopian would be the third African carrier to join the group, if accepted.

The news from Ethiopian Airlines comes at the same time as the airlines implements another part of its restructuring program that aims to transform the airline into an aviation investment group.

The management of Ethiopian has recently developed a 15-year development strategy dubbed “Vision 2025” that is aimed at creating a world class airline. A senior executive of Ethiopian, who declined to be named, told Aviation News 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 commercialise its different departments including the MRO centre, 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 airline that will have its own management team. This 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 centre is certified by the Ethiopian Civil Aviation Authority, FAA, Boeing and Pratt and Whitney. The MRO centre has been providing repair and overhaul services to major African and Middle East carriers.

In 2006, Ethiopian inaugurated a new maintenance hangar at his hub the Addis Ababa Bole International Airport built at a cost of $6.4 million by a Chinese construction firm called CATIC. With the capacity to handle aircraft as big as the B747, the hangar covers 7,200 sq.m. As Ethiopian placed firm orders for 37 aircraft – 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 centre provides maintenance and overhaul services for B767, 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, which it is envisioned, will make Addis Ababa into an African cargo hub. ET Cargo will transport cargo destined to Africa from Europe, the Middle East and Asia to Addis Ababa and from there it will haul the cargo shipments to different African countries. ET Cargo aims to win a major market share in the African cargo business. Ethiopian cargo has two B747F, 2B757F and 2 MD11F and with cargo aircraft Ethiopian has the largest cargo fleet in Africa.

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

The Ethiopian flight school and the aircraft maintenance technicians training centre 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 expand 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 B767,757 and 737. It is planning to acquire B787 simulator soon.

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, the 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 airline management. The analyst said that commercialising the various business units such as the MRO and cargo service is the order of the day 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% stake) and Nigerian Airways. According to management sources, new appointees will fill the vacant positions.

With the 15 year development program, Ethiopian plans to boost its annual revenue to $10 billion 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 $1 billion.

Dino D'Amore
By Dino D'Amore September 27, 2010 14:29
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