Arnold Segawa
2 minute read
26 Sep 2018
6:30 am

SAA can learn a lot from Ethiopian Airlines

Arnold Segawa

In contrast to SAA, the East African carrier reported operating revenue of $3.7 billion in 2017-18, making it Africa’s sole profitable airline.

Picture: AFP

Last month, Ethiopian Airlines announced results for the 2017-18 financial year with the net profit at $233 million (R3.3 billion).

The East African carrier went on to report a 43% rise in operating revenue amounting to $3.7 billion in 2017-18, proving it was Africa’s sole profitable airline.

South African Airways, on the other hand, has in the past decade endured about eight CEOs and more than six turnaround plans, with bailouts of about R46 billion.

As SAA mounts yet another recovery, it is essential to borrow a page from their East African counterpart.

SAA has to come strong on the continent, given the intra-Africa trade prospects.

By 2013, intra-Africa trade was at a meagre 13% but the African Union’s agenda 2063 projects the figure to climb to 50% by 2045 – and airlines will be cardinal to the binge.

Ethiopian Airlines has opted to collaborate with other carriers, acquiring stakes in national carriers across Africa.

This year, the state carrier bought a 45% stake in Zambia Airways and followed up with an agreement with the government of Chad for the launch of Chad’s national carrier, where Ethiopian airlines owns a 49% stake.

These added to its presence in Malawi, where it operates Malawian Airlines.

Raphael Kuuchi, International Air Transport Association (Iata) vice-president for Africa, said: “If you look at the industry globally, African airlines are the ones that least work with each other. If you want to benefit from traffic, you need to have a relationship with other operators and Ethiopian has done that.”

Over the years, the East African carrier has benefitted from as little government intervention as possible.

With a mandate to run the carrier as a self-sufficient business, maintenance, catering, and even operation of the pilot school, are handled by Ethiopian Airlines.

SAA, meanwhile, has had numerous bosses and six years of losses posing queries on whether migrating the carrier to the public enterprises docket, as announced last month, would have an effect.

Moneyweb

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