Tewolde GebreMariam: “We are trying to reduce our cost as much as we can. But we have decided not to lay off our employees.”
When passenger traffic virtually disappeared in early March, Ethiopian Airlines management held a crucial meeting.
Unlike many other African carriers, Ethiopian hadn’t suspended its operation. However, it had been forced to ground most of its fleet (around 90 out of 120 aircraft) due to the closure of airspace and stringent flight restrictions.
“We have gone through civil war, famine and epidemics like SARS, MERSE and EBOLA,” said Tewolde GebreMariam, Ethiopian Airlines Group CEO. “We have also witnessed the turbulent time in the wake of the 9/11 terrorist attack in the US. But nothing has come close to the impact of Covid-19.”
The airline estimated it had lost $1 billion in revenue, with its operation reduced by 90%.
“In March, executive management members deliberated on the unfolding situation and decided that we should focus on our cargo operation,” explained GebreMariam. “At that point, the market boomed.”
The demand for air cargo surged as countries desperately sought life-saving equipment like facemasks, testing kits, and ventilators. Since March, Ethiopian has been transporting lifesaving equipment from China to Africa, Europe, the US and South America.
“Personal protective equipment (PPE) had to be transported by air because speed was vital to save lives,” said GebreMariam.
Ethiopian Cargo and Logistics Services, one of the eight business units of the aviation group, operates 12 freighter aircraft – ten B777-200s and two B737-800s. It has a modern cargo terminal, which can handle one million tons of freight per annum.
However, the 12 aircraft were not enough to handle the huge new market, so Ethiopian converted 25 of its passenger aircraft, including the B787s and A350s, into freighters.
According to GebreMariam, Ethiopia’s cargo market has increased by 50%, boosting its revenue substantially, and compensating for the passenger flight losses. He said the revenue generated from cargo enabled the airline to cover its monthly expenses – some $112 million.
Ethiopian has a workforce of 17,000 but GebreMariam said proudly: “We didn’t lay off our employees.” To stay afloat, however, the airline is working aggressively on cost reduction.
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