Ethiopian Airlines And It’s Widebody Diversification

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On Sunday morning at Pearson International Airport in Toronto, Ethiopian Airlines celebrated the first arrival of its Airbus A350 to the city. Previous flights have utilized the Boeing 777 as well as the Boeing 787. At the event, Ethiopian Airlines’ Country Manager for Canada talked about the great features of this latest addition to the fleet. This includes an improvement in fuel consumption and a greater range. Interestingly, he also explained that the decision for leasing and purchasing the A350 was also in the interest of fleet diversification – and a move away from an all-Boeing fleet.

Ethiopian first welcomed the Airbus A350 in 2016 as leases from AerCap. Photo: John Taggart via Wikimedia Commons

Here’s what an Ethiopian Airlines representative had to say at the Toronto event:

“Back in 2016 it was a strategic decision to buy these technologically advanced airplanes…our expansion was requiring diversification…” -Samson Arega, Ethiopian Airlines Canada Country Manager

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Of course, a move away from Boeing was not the only reason for Ethiopian’s interest in the Airbus widebody. New efficiency advancements of the A350 allow an increase in range and capacity. In fact, Arega says the aircraft will save Ethiopian up to US$1.8 million per year per plane on fuel.

The case against diversification

Having a fleet of only one model certainly allows for big gains in operating efficiency. Every mechanic, every flight attendant, and every pilot in the company can be shuffled around with far less complication. When it comes to having an entire fleet from one manufacturer, there would be fewer complications in training staff.

However, if the size of the airline is large enough, benefits can exist with loyalty to the manufacturer. It is common knowledge that list prices for large jets are rarely what airlines pay. Rather, aircraft sales executives make closed-door deals, offering significant discounts for significant orders.

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One would assume that manufacturer-loyalty also comes in to play. With the highly competitive environment Airbus and Boeing find themselves in, we can imagine that there would be some financial incentives thrown in to dissuade an airline from considering their archrival.

Ethiopian Airlines first placed an order for the Boeing 787 in 2005. Photo: Boeing

The case for diversification

The case for diversification is pretty clear – and in recent years, Ethiopian Airlines has discovered the reasons the hard way (we’ll get to those issues below). When a problem arises with a specific aircraft type, the airline can be left exposed to a significant loss of capacity in order to rectify the problem.

In fact, the problem isn’t just the aircraft manufacturers. We can see it clearly with engine options as well. British Airways, Norwegian, Air New Zealand, and many other airlines, were hit hard when there was an issue discovered with the Rolls Royce Trent 1000 engines powering their 787 Dreamliners. Airlines operating the 787 with the GEnx engine option went unscathed.

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Ethiopian Airlines has been hit hard with problems arising from the Boeing 737 MAX. Recently, problems were discovered with the Boeing 737NG (above) which is a potential problem for the airline if left unchecked. Image: Boeing

The impact on Ethiopian Airlines

Ethiopian having an all-Boeing fleet has exposed it to several Boeing-specific issues. Without going into extensive detail (we’ll link to articles below), these problems include:

  • A significant delay in the initial delivery of its 787 Dreamliners. Initially expected in 2008, the first delivery came in 2012.
  • A recent discovery of “pickle-fork” cracks in older 737NG aircraft leaves its older 737 fleet vulnerable to the issue – though nothing has been found in Ethiopian’s fleet yet.
  • And most significantly, it goes without saying that the 737MAX crisis has hit Ethiopian (and Lion Air) the hardest, with software problems leading to deadly crashes. Since then, 737MAX fleets all over the world have been grounded and await re-certification.

Conclusion

This article shouldn’t be seen as an attack on Boeing – rather, it is proving why Ethiopian Airlines made a good call to diversify its aircraft and move away from an all-Boeing fleet. In fact, Indian carrier IndiGo must replace the engines of its fleet of 98 A320neos. These 196 engines must be replaced by the end of January, otherwise those aircraft will be grounded.

Fleet diversification can be costly but it may just be the safer decision in order to fend off significant service disruption when issues arise.

Do you think Ethiopian Airlines made the right call in moving away from an all-Boeing fleet? Let us know by leaving a comment!

 

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