By Kirubel Tadesse
“We have made history!” Ethiopian CEO Girma Wake said on Thursday, flanked by his successor Tewolde GebreMariam and his new management team. Indeed they made history with Girma Wake writing the main chapter.
Ethiopian Airlines’ most successful CEO Girma and Chairman of the Board Seyoum Mesfin officially retired together this week while a new CEO Tewolde and Addisu Legesse, former Deputy Prime Minister, assume chairmanship of the Board, on a surprising comeback.
The first phone call
On November 2003 Seyoum Mesfin, Ethiopia’s Foreign Affairs Minister, made a rare phone call to the United Arab Emirates.
Seyoum was not looking for an official of the government there which would be the case if the call was to any other country.
At the receiving end of the call was Girma Wake who only knew the senior minister on TV. Seyoum wanted to offer Girma the top job at Ethiopian but Girma just signed a new contract with Gulf Air.
“I agreed to meet Ato Seyoum since I come to Ethiopia every three months for vacation. I planned to convince him to give the job to another person; one reason is I was 60 at that time which is the official age for retirement. There are usually professionals competing for new posts; I thought I would convince the minister to give the job to one of them,” Girma said reminiscing on Thursday how he ‘reconnected’ with the national flag carrier.
Girma came to Addis Ababa and met Seyoum who did the convincing in which Girma agreed to lead Ethiopian for five years.
“He was there, which ET needed him, and unlike any other African government, we were allowed to do what we thought commercially and strategically right- that is our secret for success ,” Girma said of Seyoum who led the airlines, 100 percent owned by the government but free to work as a business.
7 is more than 65
The Gulf Air CEO could not believe Girma, the only person whose contract was extended was going back to Ethiopia after he only served two months on his new contract, “Are you crazy?” the CEO said.
“Everybody is somewhat crazy,” Girma joked. What happened to the national flag carrier since Girma took office was anything but crazy.
Ethiopian has been always strong but when Girma became its CEO in February 2003 it had only twelve jetliners. It carried 1.2 million passengers annually to 42 international and 16 domestic destinations.
Girma spent most of 2004 devising a bold plan with assistance from the locally based Ernst and Young team. Then he followed a five year strategic plan: Vision 2010 that was launched in 2005.
Pundits remained skeptical about the ambitious plan which had Ethiopian evolving into a billion dollar company.
Nobody then saw how the homecoming Girma, who accidentally joined Ethiopian at 22 years of age, was about to change things once and for all.
The expression ‘a record’ was suddenly a culture at Ethiopian; in less than a year since Girma took office the airlines grew by 20 percent.
Operating revenues skyrocketed by 26 percent to amount more than half a billion dollars in 2004/05, an impressive start of the five year plan.
Consecutively and consistently in the remaining four years of the plan, the airlines grew by an average 25 percent and became a billion dollar company by 2009- one year ahead of the target.
The 1.2 million passengers the airlines used to carry annually when Girma arrived almost tripled and now stands at 3.2 million.
The twelve jetliners the airlines had more than tripled. ET’s fleet, one of the youngest globally, has 37 aircraft. Addis Bole International Airport spent one billion birr last month to expand the airport for the growing fleet, including the latest arrival Boeing 777-200LR. More planes means Ethiopian can now reach 60 destinations.
The airline is now the second biggest in Africa next to South Africa Airways.
The growth of Ethiopian was reflected in profits it pockets: from just 269 million birr it grew to 1.345 billion birr under Girma’s leadership.
In a deserving coincidence, now that Girma leaves office, Ethiopian is Africa’s most profitable airline.
The airline is now a carrier everyone likes to be associated with. Before Girma, Ethiopian had a single code sharing agreement, now it has twelve and it was also unanimously accepted by Star Alliance as member.
Girma’s Ethiopian created 1,500 new jobs including 250 for foreigners. The profits the airline has made have significantly raised employees’ income, “on average every employee’s pay increased by 167 percent,” Girma said.
Ethiopian Airlines is also investing elsewhere, more importantly in Africa. Ethiopian is a strategic partner with a 20 percent stake in the new West African ASKY Airlines which is doing “marvelous” since it made its maiden flight in January 2010.
“Ethiopian Airlines has always been strong but we have made history,” Girma said at last Thursday’s dinner at the Addis Ababa Hilton. Indeed the last seven years Girma had with EAL was historic and by far the best in the 65 years of the flag carrier.
Who is in charge now?
Girma, father of six, retired as of last Friday, December 31st. From now on his six grandchildren are the priority and the national carrier can’t be in better hands, Girma insisted.
Recommended by him, the new boss at Bole EAL headquarters beginning Monday is Tewolde GebreMariam. The CEO didn’t waste any time in outlining yet another bold plan, Vision 2025,that came at the success of the five year strategic plan, which created a muscle for Ethiopian to aspire to evolve to an aviation group to be known as The Ethiopian Group.
Alongside Tewolde are a team of sixteen senior managers who have a combined experience of 421 years of airlines service.
Ethiopian’s long term executive vice president of finance and strategic planning Kassim Geresu is now chief finance officer. Mesfin Tasew, who was vice president of maintenance and engineering, is now chief operating officer. Nega Mekonnen is now vice president of corporate finance.
Groomed Gobena Michael, who was not part of the previous thirteen member Ethiopian senior managers team, has now two key posts; he is chief commercial officer and senior vice president of global sales.
Among the new entrants to the top is also Essayas WoldeMariam who is now vice president of Ethiopian Cargo.
Captain Desta Zeru is vice president of flight operations. Kemeredin Bedru, who was vice president of information technology, is now chief information officer under the new management.
Vice president of human resources management Elizabeth Getachew consolidates her post as senior vice president. Elizabeth is now the top ranking female member of Ethiopian management.
The other senior female manager, Rahel Zerihun, a legal counsel, keeps her post as vice president and also takes a new post called corporate secretariat.
In a reshuffle, Samuel Assefa, who was vice president of internal audit and corporate quality assurance, is now in charge of Ethiopian aviation academy. Wassu Zelelew, now assumes Samuel’s old post as acting vice president. Yeneneh Tekleyes is vice president in charge of marketing.
“Our average age is 49 years old and most of us will serve long enough so that we will see through the successful realization of vision 2025,” Tewolde says.
While Ethiopian experts packed the management for Vision 2025, the government has put nine new board members to be the governing body.
Former Deputy Prime Minister Addisu Legesse is now in charge of the board Ethiopian’s legal counselor. Rahel will serve as interim secretary.
Minister of Mines Sinkenesh Ejigu is the senior ranking government official in the new board.
Mesfin Lemma, Sisay Gemechu, Major General Molla H.Mariam, Mussa Mohammed, Alemayehu Assefa, Retta Melaku, and Tewodros Balcha are the remaining board members.
What is the plan?
“The central strategy of our Vision 2025 is the transformation of the airline in to an aviation group with seven strategic business units operating as autonomous profit centers under the umbrella of the holding company which generates an annual revenues of 10 billion dollars,” promised CEO Tewolde.
International passenger network, Domestic and regional network, Cargo network, Maintenance, Repair, and Operations business, Aviation Academy, In-flight Catering and Ground Services are the envisioned independent business units that will come under the umbrella of The Ethiopian Group.
Among the most important goals in the plan are to carry 13 million annual international passengers with 70 jet airplanes [41 aircraft are already ordered direct from the manufacturers] to 92 international destinations and to have the annual cargo tonnage reach over 700,000 tons.
From the increasingly turbulent global economy, oil price, hyper competition from petro-dollar driven carriers to monopolistic power of suppliers, CEO Tewolde says threats and challenges against Vision 2025 are abundant. “In this challenging environment we are called upon to stand united and optimize opportunities by harnessing our resources and by remaining proactive with a dual vision, one eye squarely focused on the day to day activities and the other one equally focused on the long term strategic issues,” the CEO further elaborated.
Against all the challenges the CEO says he is confident the plan would be met. The ground work and the management lineup is already in place; “We have assembled so much competent, highly qualified and well-prepared management team that I have no doubt in my mind that we will carry out our plans successfully.”