Page 73 - World Airnews News July 2020 Edition

AFRICAN

Kenya Airways by 35 percent. in Africa. We had also built a state-of-the- countries. What did happen there?
art cargo terminal at our main hub Addis Tewolde Gebremariam: No one thought
Ababa Bole International Airport which can that an airline from a developing African
The Reporter: What strategy are handle 1.2 million tons of cargo per annum. country would come to serve South
you implementing to withstand the Since March, we were busy transporting American countries such as Brazil and
current adverse impacts of COVID-19? lifesaving equipment like PPE from China Argentina. But this is what happened.
Tewolde Gebremariam :When we to Europe, the US and South America. We Many people were dying in Europe in
prepared the Vision 2025 growth strategy transported lifesaving medical equipment March. There was shortage of ventilators.
some ten years ago we were looking at to France, Spain and Italy. You see our The South American countries ordered
the idea of having diversified businesses. cargo planes in major European airports. for ventilators from China. The ventilators
It was a very debatable subject. Some were transported via Europe and the US.
argued that business diversification has While en route to Brazil and Argentina
caused the demise of airlines. We looked The Reporter: There are giant cargo during a stopover in the US for refuelling in
at Lufthansa and British Airways. British airlines like Lufthansa Cargo, Turkish Miami ventilators were taken.
Airways had catering business, cargo, MRO Cargo, Qatar, and Etihad Cargo. How So they ordered ventilators to be
(Maintenance Repair and Overhaul), and it did Ethiopian Cargo compete with transported by Ethiopian cargo. These
also had a hotel at one time. these giants and won contracts? ventilators were transported from China
The then management of British Airways Tewolde Gebremariam : For big compa- via Addis Ababa to Brazil and Argentina.
decided to spin of the businesses and to nies to make a swift turn is a bit difficult. And they were very grateful.
focus on passenger transport as their core It takes time for giant companies to make
business. a change in their business strategies.
On the other hand, Lufthansa expanded The cargo market boom was a sudden The Reporter: Is the revenue generat-
its aviation group. Today, Lufthansa Technik phenomenon. Ethiopian Airlines is a ed from cargo operation helping you
is the leading MRO center in the world. flexible company. We have an experienced to stay afloat?
Their catering company Sky Chef is also the management team with rich experience Tewolde Gebremariam: Until the
leading catering company. They have built and we immediately made the decision to COVID-19 pandemic Ethiopian Airlines
one of the biggest cargo airline, Lufthansa exploit the cargo market. We do not have was on growth mode. After the impacts of
Cargo. Lufthansa Systems produces flight a cumbersome bureaucracy. If you do not COVID-19 began to bite we put the airline
control system. It has a big market share use the opportunity quickly it will go away. on survival mode. We are not working for
and we also use their flight control systems. loss and profit. We are working on cash
So Lufthansa has become a successful basis to ensure the survival of the airline.
aviation group. The Reporter: How much cargo did
Considering the situation in Ethiopia we you transport in the past few months? We are working on cost reduction
have chosen having a diversified business aggressively. We are reducing our cost as
much as we can. We are using the revenue
units. That is the pillar of Vision 2025. Tewolde Gebremariam: In March we we generate from cargo and aircraft
We have Ethiopian Cargo, MRO, Aviation transported 10,300 tons of cargo, in April maintenance operations to cover our fixed
Academy, Catering and Ground Handling. 13,600 tons and up to mid May 6000 tons. costs. We are servicing the loans we took
We have also established Ethiopian Skylight We transported a large amount of air for aircraft purchases and we are paying
Hotel and ventured into airport operation. freight. aircraft leases. We are paying salaries. We
We made substantial investment on are reducing costs and covering our fixed
Ethiopian Cargo and Logistics. costs.
Though it was a debatable subject we The Reporter: Can you tell us about
believed in having a diversified business the cargo market surge?
units and today we have reaffirmed that it Tewolde Gebremariam: The cargo
was a right decision. It was a well thought market has increased by 50 percent. It was The Reporter: How much is your
out plan. When the passenger market has wise decision for us to focus on cargo and monthly salary expense?
come to a standstill, cargo is the market MRO market back in March. We call these Tewolde Gebremariam: Our salary
that we could look at. business ‘Corona Free’. expense is around 650 million birr.
In March the executive management We deployed the ten B777s we have
members sat down and after we deliberat- but they were not enough to serve the
ed on the unfolding situation we decided increasing air cargo market. So converted The Reporter: To all your 17,000
that we should focus on cargo operation. some of our passenger aircraft into cargo. permanent and contract employees?
When we decided to concentrate on cargo At the beginning we used the passenger
operation, the cargo market boomed. The aircraft. We load up to 60 tons of cargo in Yes, our total monthly salary expense
Chinese market was closed in February and the big passenger aircraft and up 40 tons is around 650 million birr. We service our
March. As you know the China is the global of cargo in the mid-size passenger aircraft. debt and settle aircraft lease payments. In
manufacturing hub. The factories were We load the cargo on the seats. But we March we decided not to lay off employees
closed. Goods could not be transported. feared that it will harm the seats in the and not to cut salaries unless situation is
When the Chinese manufacturers resumed long run so after consultations with the beyond our control.
operation most of the goods which was aircraft manufacturers, Boeing and Airbus, This is not the US and Europe where you
transported by sea came to air transport. our engineers took out the seats and made have social well fair payments. So staff lay
Second, COVID-19 life saving equipment them suitable to carry cargo. We have off is not an easy decision to make. That
like face masks, hand gloves, testing kits, converted 25 passenger into cargo planes. is our last resort. You do not make it a
have to be transported by air because priority option. We are reducing our cost
speed was very important. Those who as much as we can and use the revenue
prepared themselves can exploit the The Reporter: Recently, the Financial we generate to cover our basic costs. The
market which was created abruptly. With Times reported that Ethiopian Airlines majority of our income, 85 percent, comes
ten B777s and two B737 freighter aircraft Cargo came to rescue Latin American from passenger transport and 15 percent
Ethiopian Airlines is the largest cargo airline comes from cargo and MRO. The revenue

World Airnews | July Extra 2020
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