Africa airlines said to be inefficient due to state interference

The inability of most African governments to give state-owned enterprises (SOEs) the free will to operate has been a great source of distress to state-owned airlines in the continent.

Such interference, according to the Senior Vice President in-charge of Global Sales at Ethiopian Airlines, Mr Esayas Woldemariam Hailu, has caused most national airlines in Africa to under-perform and further accumulate debts which are later serviced through the public purse.

Speaking to the Daily Graphic on the performance of national airlines in the continent vis-à-vis the fortunes of Ethiopian Airlines, Mr Hailu said most national carriers on the continent were currently struggling to survive due to state interference which he observed limited them from venturing into lucrative areas.

“Some governments want to dictate to the airline on the destinations they should fly to, how the revenue generated should be applied and all that, but that doesn’t make the carrier profitable.”

“If you want it to survive, make profit and stand on its own, then you just need to guide it, not to interfere in the activities” the Senior Vice President of Ethiopian’s national carrier said.

His comments at the airline’s head office in Addis Ababa, Ethiopia, formed part of activities marking a five-day visit by travel and tour agencies from Ghana to that country to get acquainted with the operations of the carrier.

It was at the instance of the Ghana office of the airline and aimed at exposing the owners, managing directors, director-generals and other management executives of the top seven agencies to Ethiopian Airlines’ operations, the country’s tourist sites and how the airline and the agencies could collaborate to grow their respective businesses.

“The good thing about our operation is that the Ethiopian government doesn’t dictate to us, they don’t interfere in our operations and we don’t pay any money to the government; they just guide us,” Mr Hailu said.

Ethiopian Airlines, which flies to 72 destinations worldwide, is currently one of the best performing airlines on the continent, with an annual turnover of about US$1.78 billion as of June, last year.

The airline runs its own aviation academy, services all its aircraft as well as that of other airlines at its maintenance, repairs and overhaul (MRO) unit in Ethiopia and is now aiming at becoming a major player in the aviation industry in the world.

It recently won a bid that made it the sole carrier of heads of state and other delegates to the just-ended 50th anniversary celebrations of the African Union.

But while the fortunes of the Ethiopian national carrier are improving year after year, that of its competitors on the continent are dwindling, with most even collapsing.

Here in Ghana, the government is working at a possible re-establishment of a national carrier after the defunct Ghana Airways collapsed around 2004, after years of recurrent losses.

The same applies to neighbouring Nigeria as well as other countries across the continent.

“Some governments just see the presence of a national airline as a national pride while others see it as an economic value.”

“If the motive is to make it an economic value to the country, then the best is to avoid state control and instead, guide the management to run it efficiently,” Ethiopian Airline’s Vice President said.

Source: Daily Graphic