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Ethiopian Airlines’ strategy of breadth over depth and building regional hubs has led it to become one of the continent’s largest carriers; a strategy it will have to speed up to maintain market share amidst growing competition.
Ethiopian Airlines Enterprise, sub- Saharan Africa’s second-biggest carrier, said it’s planning to add a hub in the Democratic Republic of Congo to secure transfer traffic amid growing competition from Middle Eastern operators.
Congo is the favored location for a subsidiary that would seek to attract travelers from across central Africa, following on from bases in Togo in the west and Malawi in the south, Chief Executive Officer Tewolde GebreMariam said in an interview.
Ethiopian Airlines is building a system of African hubs to help win traffic beyond its headquarters in Addis Ababa as economic growth and a mining boom spur passenger traffic across the continent. Gebremariam said the exact location of the bases is less important than the regional markets they give access to.
“We’re planning to cover the continent,” the executive said in Cape Town, where he was attending the International Air Transport Association annual meeting. “That’s becoming more urgent as demand attracts competition from the Gulf. But we think Africans will use African airlines of they can.”
Ethiopian Airlines established its Togo hub from 2008 through ASKY Airlines, controlled via a 40 percent stake and a five-year management contract. It was selected this year to purchase a 49 percent holding in Air Malawi 2012 Ltd. following the liquidation of a predecessor company.
The company had previously said it was considering hubs in Tanzania or Zambia to serve the southeast of the continent. Gebremariam didn’t say if a venture in the Congo would follow the same model based on equity holdings as favored previously.
The CEO told the gathering of airline chiefs in South Africa that local carriers should be seeking a 50 percent share of the continent’s international traffic, compared with the 18 percent that they currently control.
In addition to Persian Gulf operators such as Emirates and Etihad Airways, Ethiopian Airlines is seeing increased rivalry from Star Alliance partner Turkish Airlines, the CEO said. The Istanbul-based company serves cities including Kinshasa, the capital of the DRC, with the route made viable through the use of a narrow-body Boeing Co. 737 plane.
Editor: Benedikt Kammel.
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