Ambitious Ethiopian views Addis as potential Dubai-like hub

August 16, 2012 |  ATWEthiopian Airlines 787.

With the Boeing 787 now officially part of its fleet, Ethiopian Airlines (ET) believes it is well-positioned to be the leading airline on the African continent and eventually compete against any of the world’s top carriers for passengers and cargo.

During a conversation with ATW aboard ET’s first 787 as it flew from Boeing’s Everett, Wash., facility to Washington Dulles (ATW Daily News, Aug. 15), CEO Tewolde Gebremariam didn’t shy away from comparisons with Emirates and said that ET-base Addis Ababa (ADD) could become a global connecting hub similar to Dubai.

“Most of the growth [over the next 10-20 years] will come from emerging markets, notably the BRICs [Brazil, Russia, India and China], and if you draw a line between China, India, Africa and Brazil, [Addis] is strategically located right in the middle of the line,” he said. “We are strategically located to take advantage of that fast growth and the 787 fits the strategy of serving markets within a 10 hr. radius with nonstop flights east, west, north and south. It enables us to access a market catchment area of 5.4 billion people … in growth economies that will require air mobility.”

ET’s first 787 will be used on routes within Africa “for the time being” to promote the aircraft, Tewolde said. But the ultimate focus is on connecting passengers worldwide via ADD. “The business model is almost the same” as Emirates, he said. “To any point in the world, it’s just one stop in Addis.”

The carrier believes it is similarly positioned to be a major cargo player. Next month, it will take delivery of the first of six Boeing 777 freighters it has on order. It will be the first African carrier to operate the type.

“Africa is rich in natural resources, particularly oil, and because of that the world is [increasingly] interested” in trade with Africa necessitating air cargo, Tewolde said, adding, “Particularly China is squarely focused on Africa as a strategic location.”

He said the airline aims to generate $10 billion in annual revenue by 2025 (ET reported revenue of $1.5 billion in 2011) operating a fleet of 120 passenger and cargo aircraft to 90 international destinations, and also providing MRO, training and catering services on a third-party basis to other African airlines.