ETHIOPIAN AIRLINES by Outlook Publishing

ETHIOPIAN AIRLINES

Doubling in size since the turn of the decade www.ethiopianairlines.com

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RAPID EXPANSION OF

Africa’s Largest

AIRLINE 2

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thiopian Airlines (Ethiopian) has already become the largest airline in Africa based on fleet size and could overtake South African Airlines (SAA) this year as the largest in terms of passengers carried. With plans to further expand both its fleet and network, the flag carrier hopes to widen the gap between itself and the other leading African carriers. Fuelled by 15 percent year on year growth, in 2014 Ethiopian carried six million passengers and is one of only four airlines in Africa with more than five million annual passengers, and one of only four airline groups with a fleet of more than 50 aircraft. Having doubled in size since the beginning of the decade, Ethiopian has aggressive plans to tap the booming Asia-Africa market moving forward, with plans to launch services to Tokyo in April this year, which will become its 11th destination in Asia. The carrier will also add its second US destination in June as a service to Los Angeles is launched.

Booming Asia-Africa market

With further fleet and network expansion plans in 2015, Ethiopian Airlines has been able to jet ahead of the competition Writer: Emily Jarvis Project Manager: Tom Cullum

CEO Tewolde Gebremariam told CAPA TV in November 2014 that the airline believes most of its future growth opportunities are in Asia, Africa and Latin America. He pointed out that while “Europe is a strong market for us”, most of the growth over the past decade has been to Asia and China is now Ethiopian’s single largest market. Ethiopian currently serves Beijing, Guangzhou and Shanghai, with all three destinations now served with daily non-stop flights. Hong Kong is currently served with three weekly non-stop flights and one to Bangkok per week. The airline has gradually upgraded its routes to non-stop as new generation widebody aircrafts are now being used that do not need to

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Boeing 777-200F aircraft

stop-over, rather than using China as a gateway into India and Thailand. Not only is Tokyo being added to the Ethiopian flight network in April, but Singapore is due to be served with three weekly non-stop 787-8 flights in the same month. “With the launch of a new Tokyo route, Hong Kong will be upgraded to a daily non-stop service. “The new non-stop option in Singapore should be able to improve Ethiopian’s performance as it will open up one-stop connections to Australia and New Zealand and offline destinations in Southeast Asia,” said the company. Singapore has limited local traffic to Africa but Ethiopian intends to use this location as a hub for offline traffic, leveraging its fruitful partnership with

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Singapore International Airlines (SIA). Moreover, Ethiopian has been codesharing with All Nippon Airways since October 2014, which seems a logical move ahead of its launch of services to the Japanese market. The non-stop services to Singapore, the launch of Tokyo and the upgrade of daily flights to Hong Kong have only been possible through additional fleet expansion. The carrier plans to take on three 787-8s and two 777-300ERs in the first half of 2-15, which will free up aircrafts to fulfil its other international commitments.

US and European growth

In June, Los Angeles will become Ethiopian’s second destination in the US after Washington Dulles, which is

Emerging as Africa’s leading airline

The non-stop services to Singapore, the launch of Tokyo and the upgrade of daily flights to Hong Kong have only been possible through additional fleet expansion

served daily with 777-200LRs. Ethiopian has also cemented its presence in the US market with a new codeshare with United Airlines that was implemented in November last year. Los Angeles and Washington Dulles are both United hubs. Additionally, Ethiopian currently serves Toronto with three weekly 787-8 flights. Washington Dulles and Toronto are served non-stop eastbound but both flights stop in Rome on the westbound leg due to payload limitations in departing from the high altitude of Addis Ababa. Over in Europe, Dublin will become Ethiopian’s 10th destination for the continent. Ethiopian has continued growing its network in Europe – adding Madrid, Stockholm and Vienna

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CONTINENT

T H AT

GROWS.

A PA R T N E R S H I P T H AT S OA R S .

Partners in Africa’s Growth Together, Ethiopian Airlines and Bombardier are rising to the challenge of connecting communities in Africa through the Q400 NextGen aircraft. We’re proud to support one of the continent’s leading airlines through its continued growth.

Bombardier Bombardier Commercial Aircraft: Supporting Growth in Africa Elsewhere in this issue of Africa Outlook, Tewolde Gebremariam, Chief Executive Officer at Ethiopian Airlines, refers to the Bombardier Q400 NextGen turboprop airliner’s role in developing a network of regional routes linking Ethiopia’s diverse communities with each other and connecting to the country’s capital, Addis Ababa, as well as to international destinations. It’s a role ideally suited to the Q400 NextGen aircraft because of its outstanding characteristics . . . performance, economy, flexibility, reliability and -- in the two-class configuration chosen by Ethiopian -- extra passenger comfort and convenience. Ethiopian’s diverse operational requirements provide an excellent example of the Q400 NextGen aircraft’s abilities.

Ethiopia offers unique challenges to an airline because of climate and terrain. The country has a low point of -410 ft. (-125 m) and a high point of 14,938 ft. (4,553 m). Its highest airstrip is at 9,997 ft. (3,047 m). Despite these challenges, Ethiopian Airlines’ Q400 NextGen aircraft have an impressive dispatch reliability that’s very close to 100 per cent. That is a strong tribute to both the aircraft and Ethiopian Airlines’ strict maintenance practices so it’s not surprising that the airline has won Bombardier’s Airline Reliability Performance Award for the highest Q400 dispatch reliability in Africa and the MiddleEast region for four consecutive years (2010 – 2013). Mr. Gebremariam earlier said, “Overall, our experience with this excellent aircraft in a wide range of weather and other conditions proves that it is ideally suited for operations in Africa.” Ethiopian has gone one step further with its Q400 NextGen airliners. It leases four of its aircraft to its affiliate ASKY Airlines

of Togo to establish a West African hub at Lomé from which it serves 23 destinations in West and Central Africa. Another Ethiopian Q400 NextGen turboprop is leased to Malawian Airlines at Lilongwe that began flying between there and Blantyre a year ago and plans to add more aircraft and more markets. “This forming of strategic alliances is an historic intra-African co-operation in the airline business,” said Mr. Gebremariam. “By joining with us, ASKY and Malawian Airlines are linked into the Star Alliance network and all the benefits and advantages it provides to the airline passenger.” Ethiopian Airlines has also been an Authorized Service Facility for Q400 and Q400 NextGen Turboprops in Africa since November 2013 and has a Q400 training simulator that is used for in-house and third-party training. John Kassis, Regional Vice President, Sales, Middle East and Africa, Bombardier Commercial Aircraft, pointed to this initiative as one of Bombardier’s prime

Ethiopian Airlines has won Bombardier’s Airline Reliability Performance Award for four consecutive years objectives in Africa. “We want to help airlines develop their domestic routes linking regional cities with larger centres which act as gateways to the world via an airline’s intercontinental jets,” he said. Altogether, Ethiopian Airlines, ASKY Airlines and Malawian Airlines operate a fleet of 17 Q400 NextGen aircraft -- the largest on the continent. Another 14 operators from the Mediterranean to the tip of South Africa use another 46 Q400 and Q400 NextGen aircraft, making it the turboprop of choice. Recent additions to the Bombardier family in Africa include Q400 NextGen aircraft operators Air Côte d’Ivoire, Senegal Airlines and RwandAir. Other Bombardier commercial aircraft -- Q100, Q200, Q300 turboprops, as well as CRJ100, CRJ200, CRJ700/CRJ700 NextGen, CRJ900/CRJ900 NextGen and CRJ1000 NextGen regional jets -- are also working hard for their users in Africa. In

total, African customers operate, or have ordered, 115 Q-Series turboprops and 58 CRJ regional jets. Waiting in the wings is Bombardier’s exciting CSeries aircraft, the all-new 21st century airliner with two models designed specifically for the 100- to 149-seat market segment. The CS100 aircraft with 110 to 125 seats is scheduled to enter revenue service in 2015 and the CS300 with 135 to 160 seats is scheduled to follow six months later. The CSeries aircraft will offer operators a 15 per cent operating cost advantage, a 20 per cent fuel burn advantage, exceptional operational flexibility, widebody comfort in a single-aisle aircraft and an unmatched environmental and noise footprint. Among the CSeries customers is an unidentified but current Bombardier aircraft operator in Africa that has signed a letter of intent to acquire five CSeries aircraft. The 100- to 149 seat aircraft category is expected to account for 48 per cent, or 336 aircraft, of the 700 new aircraft expected to be delivered to African operators between 2014 and 2033, according to Bombardier’s Commercial Aircraft Market Forecast for the period. The 60- to 99-seat segment is expected to attract 46 per cent, or 322 aircraft and the 20- to 59-seat segment is forecasted to amount for only six per cent of deliveries, or 42 aircraft. “We continue to improve and enhance our products to make them even more of an asset to their operators,” said Mr. Kassis. “Some of the jets and turboprops offer business-class seating to accommodate growing business traffic and provide seamless service with larger aircraft. We have added an optional passenger-cargo combination configuration and an optional, extra capacity 86-seat passenger configuration

to the Q400 NextGen aircraft. Enhancements to the CRJ900 NextGen regional jet have resulted in a 5.5 per cent reduction in fuel consumption compared to earlier versions of the CRJ900 aircraft. The CSeries is also very well suited to the African continent. The CS100, the smaller variant, can be configured as a 100-seat dual class airliner that allows for significant baggage payload and exceptional performance while maintaining a seamless feed to the large narrowbodies. There are simply no better products in their seat segment for operators in Africa.” The forecast noted that African airlines have historically experienced low load factors in the 70 per cent range, indicating a mismatch between seat capacity and passenger demand. Smaller aircraft with 70 to 120 seats segment in dual class are the right size to support profitable route development. Supporting the success of Bombardier’s aircraft in Africa is a well established support infrastructure. Operating from the company’s regional office located in the United Arab Emirates, Bombardier Commercial Aircraft’s sales and marketing team is well positioned to provide industryleading solutions to its current and prospective customers.

T +44 (0)28 9045 8444 www. bombardier.com

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VIVO ENERGY

ith a vision to create Africa’s most respected energy business Vivo

Energy sources, distributes, markets and supplies Shell’s high-quality fuels and lubricants to retail and commercial customers in more than 20 countries across Africa. Vivo Energy also sells jet fuel to its customers at 23 airport locations across Africa, and is a proud supplier to Ethiopian Airlines.

Ethiopian is growing both its fleet and network around the world

In partnership with Vitol Aviation, Vivo Energy is building its aviation customer

to its portfolio in 2014 – and has now begun focusing on North America.

Fleet expansion

With plans to approximately double its fleet over the next 10 years, Ethiopian strives to maintain its status as Africa’s largest airline. In line with this, it phased-in 16 game-changing aircrafts last year. At the end of FY2009 Ethiopian’s fleet consisted of just 34 aircraft, including 29 passenger aircraft and five freighters. In order to meet its goal of operating 150 aircraft by 2025, Ethiopian will need to commit to at

least 29 more aircraft. “Assuming the ageing 757 and 767 fleets are retired over the next decade, at least 44 more aircraft will be needed,” stated the company. Furthermore, new orders will be needed to maintain the level of growth targeted by the company. Supporting the fleet expansion is the Ethiopian Aviation Academy, which in 2014 enrolled more than 1,200 students in different fields including pilots, aircraft technicians, cabin crew, marketing and finance staff and customer service position. 96 aviation technicians, 46 marketing professionals and 48 cabin crew

base across Africa. We operate to the latest international Joint Inspection Group (JIG) refuelling standards across our network of airports. We also conduct regular inspections of airport facilities to ensure that quality control and the safety of our onsite refuelling operations and processes are adhered to rigorously.

Vivo Energy currently has aviation operations in the following countries: • Cape Verde • Ghana • Ivory Coast • Kenya

• Mauritius • Morocco • Senegal • Uganda

T +44 1234 904 026

www.vivoenergy.com

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Vivo Energy, creating Africa’s most respected energy business Vivo Energy is the company behind the Shell brand in Africa. We are here to offer customers the very best of Shell’s products and services, including supply reliability, technical expertise, and unmatched customer service, in the countries in which we operate. We have in place industry-leading health and safety standards, and are committed to delivering Shell’s high-quality fuels and lubricants in an environmentally and socially responsible manner. Vivo Energy also has aviation operations in eight of its markets, selling jet fuel to its customers at 23 airport locations, through its partnership with Vitol Aviation. A joint venture between Vitol (40%), Helios Investment Partners (40%) and Shell (20%), Vivo Energy represents a unique combination of resources, experience and expertise. With a strong and growing presence across Africa, we have plans to invest further – with around US $300m of capital investment planned in the next three years. Our local teams have the experience to go beyond meeting initial customer needs. Through access to superior technology, products and related services we are able to add additional value to customers’ operations. In this way we aim to be the first and trusted choice for our customers.

Shell trademarks used under license.

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graduated from the academy last year. The premier Pan-African Aviation Academy represents the highest international standards and is dedicated to bridging the aviation skill gap on the continent. “The academy is the backbone of Ethiopian’s success and we are continuously investing in the expansion of both its intake capacity and the scope of training it provides. “As per our vision 2025 strategic roadmap, we plan to scale up our yearly intake capacity to more than 4,000 trainees with a view to cater to the growing needs of the continent,” said Mr Gebremariam. As a result of continued dedication to an all-round excellent service, Ethiopian was named Airline of the Year by the African Airlines Association (AFRAA) on November 9, 2014, amongst others. “Ethiopian proved to be a multi-award winner in 2014, receiving recognition from more than 12 different bodies, including awards for exceptional leadership as well

Ethiopian Airlines has

won the ‘Airline of the Year’ Award

The Aviation Academy represents the highest international standards

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as training and services,” stated the company. “We were crowned Airline of the Year due to our consistent profitability and sound strategy, which has enabled us to forge win-win partnerships... This is the third year that Ethiopian has continued to receive the award from AFRAA,” commented the company.

A bright outlook

Due to several strategic moves, Ethiopian has quickly emerged as Africa’s leading airline in recent years. Most importantly, the group is still continuing to evolve and take a more invested role in setting up joint ventures throughout Africa, Asia and North America. Corporate social responsibility is a crucial element to the success of the airline, and Ethiopian support some of the most significant events and

48 cabin crew graduated from the academy in 2014

Ethiopian Airlines carried six million passengers in 2014 and is one of only four airlines in Africa with more than five million annual passengers

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The flag carrier plans to again double in size over the next 10 years

causes across the length and breadth of Ethiopia including sponsoring music concerts, supporting individuals, fashion shows, contributing supplies to the Ebola crisis, helping where they can in terms of education, and assisting people both young and old. By contributing to the spirits of the local communities, Ethiopian hopes to demonstrate its caring nature for the country and the people supporting the economy. Ethiopian Airlines still faces challenges and obstacles in its quest to again double in size over the next 10 years. But the flag carrier has successfully entered the next phase of its development with a level of scale and efficiency that is rare for the region

By contributing to the spirits of the local communities, Ethiopian hopes to demonstrate its caring nature for the country and the people supporting the economy

and industry. Ethiopianâ&#x20AC;&#x2122;s willingness to develop aviation across the continent and beyond is noteworthy, in a market where most others have struggled. This puts Ethiopian in a strong position to cash in on the growth and vast potential that Africa offers.

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ETHIOPIAN AIRLINES Bole International Airport, P.O.Box 1755, Addis Ababa, Ethiopia Tel: +251 11 665 2222 Email: Customerrelations@ethiopianairlines.com