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The impact of COVID-19 on Ethiopian airlines, recovery preparedness and challenges

Ethiopian airlines

Digitisation and agile diversification has allowed Ethiopian Airlines to weather the pandemic better than many other carriers, explains Tewolde GebreMariam, Group Chief Executive Officer

The emergence of COVID-19 has shattered economies on unprecedented scale. The pandemic has affected the global economy in general and the aviation industry in particular, bringing the global aviation industry to its knees.

African airlines, which before the COVID crisis were already dealing with financial losses, have been particularly vulnerable and have had to seek bail-outs from governments which were already facing financial constraints. African carriers have taken different measures to deal with the crisis, including layoffs, furloughs and fleet reductions.

Global demand for travel declined as a result of the pandemic, leaving a number of major airlines in bankruptcy. Some have ceased operations altogether. The aviation industry has been the hardest hit business as a result of the pandemic and Ethiopian Airlines is no exception. Its passenger service, the airline’s biggest revenue generator, saw most of its revenue plummet, forcing it to ground many aircraft and operate at just 10% of its capacity. This created a huge financial burden on Ethiopian with unavoidable costs such as aircraft- and infrastructure-related payments as well as bank loan repayments.

But Ethiopian has kept its business afloat with diversification strategies and agile management, continuing operations by shifting its focus to cargo, hotel and MRO businesses. It implemented a cost leadership strategy to reduce expenditure while maintaining quality and efficiency.

The airline’s diversified business units have responded differently to challenges

Ethiopian leveraged its cargo, maintenance, repair and overhaul (MRO) and hotel businesses to continue without laying off employees or making any pay cuts. These business units have been used to generate revenue and help it stay financially stable during the pandemic. The airline generated revenue by providing aircraft maintenance services to Middle East and African carriers. More than 40 aircraft from different airlines have received Ethiopian MRO services. Ethiopian cargo also played a critical role serving customers around the world by transporting essential medical supplies.

Using its in-house MRO professionals, it reconfigured about 25 passenger aircraft into freighters to boost its cargo capacity as demand to transport emergency medical supplies soared across the world. It operated more than 360 charter cargo flights and carried medical supplies to over 80 countries.

Remaining loyal to its commitment to serve its customers in bad and good times, it carried out over 470 charter repatriation flights and reunited more than 63,000 citizens of different countries with families and loved ones. These charter cargo and repatriation flights together with the austerity measures Ethiopian put in place were instrumental in the fight to survive the pandemic.

"Complete recovery is dependent on the confidence of travellers and airlines’ safety measures."

Ethiopian was one of the top three airlines to make a profit during this unprecedented crisis.

Recovery preparedness and challenges

Ethiopian has a four-pillar growth strategy that has led to success during these difficult times: human resource development, a modern fleet, infrastructure development and technology.

In the wake of the pandemic, Ethiopian capitalised on these pillars and used its agile workforce and technology to cope with the crisis. The flexibility of the airline’s management has been critical in devising new strategies to come through the crisis, including the reconfiguration of passenger aircraft into cargo and redeployment of its staff to its least affected business units and applying cost leadership strategies.

Ethiopian will continue to repeat the efficiency demonstrated during the distribution of essential medical supplies and personal protection equipment (PPE) to prevent the spread of the virus and it will continue to transport vaccines across the globe until everyone is vaccinated. Ethiopian has joined the global COVAX initiative and is currently transporting vaccines to and from different parts of the world.

When “normal” flight will be fully restored is not yet known and varies from country to country, depending on airport strategies of recovery and preparation for the new normal. Complete recovery is dependent on the confidence of travellers and airlines’ safety measures. For Ethiopian, safety has been at the heart of its operation and it has stepped up precautionary actions to help gain passenger confidence in travel and expedite recovery.

"So the recovery plan predominantly focuses on the effective implementation of safety measures on board and on the ground."

The coronavirus pandemic has completely changed the passenger flight experience and for this reason Ethiopian is taking various actions to ensure safety and meet travellers’ changing expectations.

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Travellers are more cautious than ever now and consider airport cleanliness, cabin safety and an airline’s overall precautionary measures as essential to their safety. Ethiopian’s precautionary measures to protect passengers and staff include digitising all its operations for a safer airport experience.

Ethiopian’s priority has always been the safety and security of passengers and staff, even before the pandemic. So the recovery plan predominantly focuses on the effective implementation of safety measures on board and on the ground. Ethiopian has been meticulously implementing precautionary measures recommended by the International Air Transport Association (IATA), the World Health Organisation (WHO) and other national and regional health regulatory bodies such as Africa Centres for Disease Control and Protection (CDC), national public health institutes and ministries of health.

Digitisation has been a priority to bring about a contactless passenger experience from booking all the way to boarding. At the airport, customers experience is contactless, easy and convenient with the newly designed terminal equipped with the latest aviation infrastructure. The airline has digitised most airport activities and passengers can book, check-in or change travel dates from home. Most customer flight needs can be met via the Ethiopian Mobile App. The majority of passengers’ queries are addressed online; travellers get any travel- and safety-related information via the airline’s chatbot and social media channels.

Meanwhile, Ethiopian is taking additional measures in the cleaning and disinfection of all touch points on board and at the airport. Aircraft undergo deep disinfection after each flight and masks have been mandated since the outbreak. Hand sanitisers have been made available at airport gates, toilets and other places for passengers and staff to use. Airport terminal floors, baggage trays and trolleys are frequently disinfected. Social distancing measures are also in place with markings on the floor to remind passengers, for example, while standing at airport checkpoints for security clearance. These measures have significantly changed passengers’ experience.

"Despite the effort to make travel safe and secure, there are challenges in gaining passengers’ confidence globally."

Regaining trust could take some time even with the introduction of vaccination and the possibility of a global vaccine passport. New coronavirus variants emerging in some parts of the world have also posed an additional challenge to the global economic recovery. Ethiopian is working in collaboration with governments, airports and aviation authorities around the distribution of accurate COVID-19 information and regulations. Consistent flow of information among countries helps customers understand variations in entry regulations and requirements which in turn could affect travel. Ethiopian believes that coordination with stakeholders will help to ease travel. The airline plans to attract more customers into Africa as countries reopen borders and IATA works towards a digital health pass that will help airlines restore travellers’ confidence in travel and contribute to the revival of passenger business; Ethiopian has trialled this IATA Travel Pass which is expected to ease air travel globally when it comes into effect.

The skills of adaptability and resilience Ethiopian developed over its 75-year journey are significant at this time when countries start easing restrictions and airlines need to adapt themselves to new challenges to restore business. In collaboration with other airlines, airport operators and aviation regulatory bodies, Ethiopian is determined to recover soon with the effective practice of safety measures to boost passenger confidence.

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