Why Ethiopian Airlines Becomes Successful and What are the Lessons for other Public Companies
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Date
2012-06
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Addis Ababa University
Abstract
This research has been done to solve the relatively poor performance problem of
different public companies and enhance economic growth of Ethiopian economy
through public sector capacity building. Accordingly, this study examined the success
of Ethiopian Airlines, its determinant factors as well as lessons that can be taken by
other public companies from its experience. In doing that, descriptive as well as
econometric analysis based on performance indicators and endogenous growth model
are respectively used.
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This is mainly because the airline is a profitable, with a culture of continuous
improvement, paramount productivity growth, higher market share etc. In this regard,
several factors have contributed for the success of thc airline: its working standard,
overall system, dedication of workforce, safety trend, best practice, current and
recurrent trainings, formation history, state art teclmology, autonomous management, its
market strategy, visionary leadership style etc. Similarly, the results of econometric
analysis reveal that the major determinants for the growth/success of Ethiopian Airlines
are physical capital accumulation and human capital creation. Therefore, it is the
combination of the earlier qualitative determinants with both physical and human
capital that has played a significant role for its success. Finally, based on the findings,
government and different public enterprises can take the aforementioned success
leading factors as a lesson. Provided that different public enterprises have different
character of their own that they should apply everything based on the type of their
business.
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Keywords
Ethiopian Airlines