The big issues with being small...

National Airways began its charter flight operation in 2009 in Addis Ababa, Ethiopia with one Beech1900D aircraft.
The company has been providing charter flight services for VIPs, international aid organisations, construction companies, and mining and oil exploration firms operating in Ethiopia. It has also been operating charter flight services to South Sudan, Somaliland, and Puntland.
National Airways used to operate Beech1900, Pilatus PC-12s, Fokker50 and a Eurocopter EC-130-B4 to provide charter flight and air ambulance services.
There was a time in the past when the airline tried to provide scheduled domestic flight services but could not sustain the operation due to stringent aviation regulations in the country.
After several years of challenge, National Airways CEO and founder, Abera Lemi, seems determined to pursue his lifetime dream to have a full-fledged airline providing scheduled flight services in the horn of Africa.
To realise his dream, National Airways recently acquired five Embraer ERJ145 aircraft from a US company. “The 50-seater aircraft is suitable for both charter and scheduled flight services,” Lemi said.
National Airways has been operating scheduled flight services between Addis Ababa and Garewe, a small commercial town in Puntland. On October13, 2018, it made an historic flight to Mogadishu, Somalia. No airline from Ethiopia has flown to neighbouring Somalia in the past 40 years.
Ethiopian Airlines suspended flights to Somalia due to political tensions between the two countries in the 1970s.
National Airways landed its Embraer145 aircraft in Mogadishu Aden Adde International Airport. “It was the first commercial flight operated between Ethiopia and Somalia after four decades,” Lemi said.
Ethiopia and Somalia fought a two-year bloody border war in 1977-1978 that cost a heavy toll on both sides. Since then, there have been no commercial flights directly connecting the two countries, which share a long border.
Lemi said that as there is a large Somali diaspora community in various countries, the demand for air travel to and from Somalia is huge. “We are happy to serve the Somali people,” he said. There are a large number of Somali people residing in Ethiopia and Ethiopian Airlines launched direct flights between Addis Ababa and Mogadishu on November 9, 2018. “There is enough market for all of us,” Lemi said.
National Airways provides charter flight services in Ethiopia and to neighbouring countries including Djibouti, South Sudan, Sudan, Kenya, Somaliland and Somalia.
National Airways is planning to start more scheduled flight services to neighbouring countries. “We are planning to go to Hargeisa, Somaliland and Bosaso, Puntland and Juba, South Sudan,” Lemi said. “We want to contribute our share in improving air connectivity in the horn of Africa.”
Though there are eight private airlines registered in Ethiopia, National Airways is the only one that is operating scheduled flights. The national carrier, Ethiopian Airlines, is the only carrier that operates scheduled domestic flight services.
National Airways is also planning to start scheduled flight services within Ethiopia. “We want to start domestic flights from Addis Ababa to Bahir Dar, Gondar, Mekelle, Dire Dawa, and Jijiga cities. We want to offer alternatives in the domestic routes,” Lemi said.
Ethiopia’s economy is one of the fastest growing in Africa. Addis Ababa is the seat of the African Union, the United Nations Economic Commission for Africa (UNECA) and other regional and international organisations. “So there is a huge demand for air transport services, both in the domestic and regional routes. The potential for the development of the local air transport industry is huge,” Lemi said.
However, there are lots of challenges facing private operators in Ethiopia. Unlike other African countries, general aviation in Ethiopia is at its infant stage. The growth of private airlines is dwarfed by restrictive regulations.
According to Lemi, the working environment is not favourable for private airlines. He said that the Ethiopian Civil Aviation Authority (ECAA) has imposed protective regulations on private airlines that favour the national airline, Ethiopian Airlines.
Private airlines are not allowed to operate aircraft with more than 50 seats. Many complain that the seat limitation is imposed by the government to protect the state-owned Ethiopian Airlines, which, they say, is unfair.
“We are not allowed to operate bigger aircraft. That is why we acquired an aircraft, which has 50 seats. These days, because of the increasing price of fuel, you cannot be profitable if you operate small aircraft,” said Lemi. “We have been complaining about the restriction for many years and no one is willing to do anything. What is the rational behind restricting the type of aircraft private airlines can operate? We should be able to acquire Boeing aircraft with 150-200 seats if we can afford it. Ethiopian Airlines is going to sell shares to foreign companies. So who is it that the government wants to protect?”
Lemi said that the small private airlines couldn’t be a threat to Ethiopian Airlines. “We are too small to compete with Ethiopian. Our business models are different. But we are unfairly treated,” he lamented.
According to Lemi, private airlines are not allowed to build maintenance hangars at the Addis Ababa Bole International Airport. “Ethiopian Airports has denied us a plot of land for hangar construction,” he said.
Lemi believes that private airlines can play a role in boosting trade and tourism. However, he said, there is no conducive environment that allows the growth of private airlines.
“The private airlines in other African countries are very strong. They may not have a strong national airline but they have strong private airlines. If you see our neighbour, Kenya, there are dozens of private airlines that provide scheduled domestic flight services. They also have a vibrant general aviation. They have a dedicated airport for general aviation, Wilson Airport in Nairobi.
“When you come to Ethiopia you have a very strong national carrier but general aviation is at its infant stage. And business aviation is non-existent.”
A few years ago the ECAA, in collaboration with the Ministry of Transport, drafted a new aviation policy encouraging private airlines. The draft policy proposed to lift the seat limitation and allow local private airlines to operate scheduled flight services, among other things.
It has been more than two years since that draft policy was submitted to the Council of Ministers for endorsement. However, to date, it has not been endorsed.
ECAA director general, Colonel Wossenyeleh Hunegnaw, said the draft aviation policy was returned to the Ministry of Transport for amendments. “ECAA should rewrite the draft due to a change in policy issues,” he said.
Hunegnaw hopes that the aviation policy, when finalised, will address most of the private airlines’ concerns.
Lemi argues that it is time to liberalise the domestic air transport market in Ethiopia after the African Union took a bold step of establishing a single African air transport market (SAATM). “African countries have agreed to allow African airlines to freely fly in Africa. So it is a high time for Ethiopia to permit indigenous private airlines to operate scheduled domestic and regional flights without any restriction,” he said.
In 2012, National Airways established the National Aviation College, which trains professionals in various disciplines, including cabin crew, airline customer service, airport operation, airline ticketing and reservation.
In addition to the existing courses, the college is preparing to start aeronautical engineering and piloting courses.
Lemi said that if the government can address policy issues, National Airways has big expansion plans. “But, at the moment, we are not able to plan our growth,” he concluded.