Ethiopian Airlines: Bringing Africa Together

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Ethiopian Airlines: Bringing Africa Together
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Table of Contents
Introduction..........................................................................................................................2
1. Business Model of Ethiopian Airlines.............................................................................2
2. External Environment that Ethiopian Airlines was operating.........................................5
2.1. PESTLE Analysis.....................................................................................................5
2.1.1. Political Factors.................................................................................................5
2.1.2. Economic Factors..............................................................................................6
2.1.3. Social Factors.....................................................................................................6
2.1.4. Technological Factors........................................................................................6
2.1.5. Legal Factors.....................................................................................................6
2.1.6. Environmental Factors.......................................................................................7
3. Benefits of knowledge about Porter’s Five Forces Model..............................................7
4. Key Elements of Ethiopian Airlines culture....................................................................9
5. Recommendations for Sustaining its Operation............................................................11
Conclusion.........................................................................................................................12
References..........................................................................................................................13

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Introduction
Ethiopian Airlines (EA) was named “African Airline of the Year” in the year 2006
followed by receiving the “Africa business of the year award” in the following year. Although
EA is a global airline network, the strength of the airline mainly lies in its pan-African network.
This is a primary reason behind 60 percent of the worldwide routes of EA were in Africa. EA has
worked diligently to bring the Africans together. The effective business model of EA has
promoted the growth of EA and has helped the airline in gaining competitive advantage in the
market (Oqubay and Tesfachew 2019). With an intention of promoting the efficiency of the
existing business processes EA has developed an effective business strategy. The report aims in
evaluation of the key business processes and strategies of EA.
In the following paragraphs, the business model that EA follows to obtain competitive
advantage in the market is elaborated in detailed. Along with that the external environment in
which EA is operating is discussed. The knowledge and application of Porter’s Five Forces has
promoted business efficiency. The report further discusses the key elements of EA culture and
analyses if EA follows a strong culture. On basis of the finding of the report, certain
recommendations are made for EA to sustain their operation without experiencing any major
operations for the next few years without the need of experiencing any decline for the business
and revenues. The recommendations is based on the findings and the detailed analysis of the case
“Ethiopian Airline: Bringing Africa Together”.
1. Business Model of Ethiopian Airlines
Right from the beginning, in the year 1945, the Ethiopian Airlines has worked for
bringing the Africans together. Since they were carriers from the Middle East, Europe and

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African mainly jockeyed for position in a rapidly rising aviation market. Setting a strong
foothold in the African market was not an easy task considering the high operational cost along
with certain restrictive regulations that are associated with air transportation in Africa (Yifru
2017). Yissehak Zewoldi, the vice president of EA could achieve the goal of setting a strong foot
in the African market by designing an effective and efficient business model. The success and
growth of EA is quite noteworthy in the recent years, while the global airlines are facing
bankruptcy and other related problems.
The Business Model: with an aim of promoting business efficient Zewoldi had formulated a
tactic of developing multiple hubs across various regions of Africa. Ethiopian has gradually
become the largest and the most profitable airline both in terms of passengers as well as the
cargo services in Africa (Boru 2014). The presence of multiple hubs has worked for the airline in
becoming the leading airline of the continent. This particular business model that was followed
by EA has made the airline stand out in this competitive industry.
The multi-hub business model worked for Ethiopian as the aviation sector of Africa has
always remained underdeveloped. This progress in development of multiple hubs changed the
situation for obtaining better results. This business model worked out since Africa is the second
largest and the second most populated continent that comprises of more than 50 countries.
Presence of multiple hubs and low fares airlines had promoted the growth of EA in African
market.
Apart from that there was a demand of certain direct flights in African market.Airlines
generally make use of two common models for routing the network. These network include hub
and spoke model or HS model and point to point model or PP model. The PP model mainly