CASE STUDIES FROM AFRICA

EAL was funded with an initial investment of 2.5 million birr (ETB). It issued 25,000 shares, all
held by the Ethiopian government. 41 In one of the earliest aviation technical advisory
agreements in Africa, EAL was owned and financed by the Ethiopian government but managed
by TWA. EAL held exclusive domestic air transport rights, and TWA functioned as the agent
for operations, procurement, human resources, financial management, air traffic control, and
maintenance. EAL pilots, technicians, administrators, financial managers, and general managers
were all Americans employed by TWA. From the outset, however, it was decided to operate the
airline with a full complement of Ethiopian managers, flyers, and other senior staff at the
earliest opportunity. 42 The airline had an Ethiopian president and chairman, but the general
manager was hired by TWA.
Originally operating only domestic flights, EAL quickly expanded to offer international flights
in 1946. The first landing rights negotiations were with Aden, Egypt, Somalia, Saudi Arabia,
and Sudan. The first revenue-generating mixed passenger-cargo flight traveled to Cairo, using
one of five Douglas C-47 Skytrains acquired from the USA. The predominant destinations
during EAL’s first year were Asmara, Djibouti, Aden, Khartoum, Cairo, Sheikh Othman, and
Nairobi. In 1947, EAL began conducting long-haul flights, with service to Bombay. 43
In 1950, EAL secured a USD1 million loan from Ex-Im Bank to expand the fleet for additional
long-haul service. In 1957, EAL took another loan from Ex-Im bank for GBP8.5 million. With
those funds, EAL established its self-owned maintenance facility, added to its fleet, and
expanded the route network to Athens and Frankfurt. In the 1960s, EAL added Accra and
Monrovia to its destination network, becoming the first airline linking East and West Africa
through direct flights. Around this time, Bole International Airport was built to accommodate
the larger Boeing 720 jetliner. EAL operated its first jet services in 1963, travelling to Nairobi,
Madrid, Asmara, and Athens. In 1965, the airline changed from a corporation to a share
company and changed its name from Ethiopian Air Lines Corporation to Ethiopian Airlines. In
1966, EAL altered their relationship with TWA and appointed the Ethiopian deputy general
manager. EAL became a member of IATA in 1959 and AFRAA in 1968. In 1970, the TWA
contract was again adjusted, and TWA’s role was changed from manager to adviser. Since 1971,
EAL has been managed and staffed exclusively by Ethiopians. The relationship with TWA was
severed in 1975. 44
During the 1980s, Ethiopia faced severe economic and political crises that included a horrific
famine and a devaluation of the local currency. Despite these conditions, EAL maintained its
strength, remaining profitable and continuing its noteworthy training and maintenance
programmes. In 1982, EAL became the first African airline to order the Boeing 767 and the
41
Ethiopian Airlines Corporate History, 2013.
42
Tekalign Gedamu, Republicans on the Throne, a personal account of Ethiopia’s Modernization and Painful Quest
for Democracy, Tsehai Publishers, 2011, p. 136.
43
Ethiopian Airlines Corporate History, 2013.
44
Ibid.
33