Staff levels at Ethiopian Airlines and FastJet

     In this latest post in the Ethiopian Airlines and FastJet series, the staff levels of these respective airlines will be discussed. As already shown in previous articles, labour costs in Africa are low and it is interesting to see if this also has an influence on the amount of staff employed by African airlines per 10,000 passengers and per aircraft. Of course it has to be taken into account that airlines have different levels of outsourcing influencing the total staff numbers. Previous articles on Ethiopian Airlines and FastJet in relation to the ‘Airline Management’ courses at Özyeğin University (Istanbul, Turkey) can be found here.

  

Ethiopian Airlines employed 6,559 people in June 2012 while operating 48 aircraft that year. The Eastern African airline transported a total of 4.64 million passengers in 2012. That means that Ethiopian Airlines had 14.14 employees per 10,000 passengers and 136.65 per aircraft in its fleet. To understand these numbers it is also important to know that in Ethiopia, the airline does their own maintenance & engineering, catering and ground handling, besides the core flight and ground operations. The fleet and staff numbers also include the cargo division of the airline, which means that staff per 10,000 passengers is a bit higher than in reality.

Data for 2013 is incomplete, but Ethiopian Airlines had a fleet of about 55 aircraft that year and 7,642 employees, transporting 5.23 million passengers. Taking into account that the fleet number is an average towards the year-end, that shows that there is a small increase in staff per 10,000 employees (14.61) and per aircraft (138.95). Data for 2014 is not available yet, but with a fleet of already 72 aircraft, the number of staff must have increased beyond 8,500 if the same level of employees per passengers and aircraft is maintained. Especially the long haul fleet has grown significantly over the past two years, mainly due to the introduction of the Boeing 787 of which the African airline already operates 10. But also the fleet of Bombardier Q400’s and Boeing 737’s has been expanded.

The distribution of employees for the largest departments can be seen in the graph below, showing that ‘marketing & sales’ and ‘maintenance & engineering’ are the two main departments in terms of number of employees.

 When we look at FastJet, this is just a very small airline which had 3 aircraft in its fleet in 2013. It transported only 370,000 passengers with a total of 433 employees. That comes down to 11.70 employees per 10,000 passengers and 144.33 per aircraft. Also for FastJet the breakdown of employees per department can be seen below, showing that ‘sales & marketing’ and ‘flight crew’  are the two main departments in terms of employees. In this case both cockpit and cabin crew are combined in ‘Flight Crew’. This category is responsible for 30% of the total number of staff, while at Ethiopian Airlines this is just 18%. This can be explained through the importance of primary and secondary activities. For example the maintenance department of Ethiopian Airlines which does most of its maintenance in house and is responsible for 28% of the employees compared to just 7% at FastJet which only does its line and base maintenance in-house and has a single fleet type.

When comparing the numbers of Ethiopian Airlines and FastJet, we see that FastJet has less staff per 10,000 passengers (11.70 versus 14.14). Though FastJet has more staff per aircraft (144.33 versus 136.65), but this can be explained because of the very small fleet of FastJet. Departments such as administration, management and marketing and sales tend to have a large number of employees per aircraft compared to larger airlines, but will experience a lower growth when expanding the fleet compared to flight crew, maintenance and flight operations.

The lower number of staff per 10,000 passengers is more interesting. FastJet as a low-cost carrier focusses more on its core activities and outsources processes such as ground handling and catering (which is only a buy-on-board offer). But also its own staff has to achieve a higher productivity and flexibility. Still the number of 11.70 is high and also the 14.14 of Ethiopian Airlines seems to be high, even for a full service airline. When we compare with for example easyJet (see graph below), there is a huge difference. Still Ethiopian Airlines is a profitable airline. This can be explained by the extremely low labor costs in Africa compared to western Europe. Ethiopian Airlines had only slightly more than US$ 110 million staff costs (in 2012) and FastJet US$ 12 million (2013). In comparison, Brussels Airlines (Belgium) with only 3,500 employees (compared to more than 6,500 at Ethiopian Airlines) had labor costs of almost 220 million US Dollar in 2013. That’s double the cost for almost half the amount of employees. This makes that African airlines push less for higher productivity and flexibility because employees are so cheap.

 Ethiopian Airlines (2011/2012) and FastJet (2013) annual reports

Aviation Industry Updates

Aviation Industry Updates – Week 40

Date: October 5, 2014 Author: MaximRoelen

After a quiet period on this website, I will make sure frequent new additions will be made in the future. Part of this commitment is a returning item with various small new features concerning the aviation industry in general. This will complement more extensive news articles and analyses, press releases and a new item concerning my four month stay in Istanbul, more information on the latest will follow soon. – This week includes first A350 for Qatar Airways, first 777-300ER’s for China Eastern and China Airlines, Boeing increases 737 production and more.

Adria Airways to phase out Bombardier CRJ-200’s

CEO Mark Anzur confirmed that Adria Airways plans to operate its final scheduled flights with the Bombardier CRJ-200 in March 2015. One of the two remaining aircraft will be used for charter operations afterwards, while the other one will be scrapped. The Slovenian airline will replace the aircraft with additional CRJ-900’s of which the airline already operates six. The CRJ-900 has, depending on the configuration, 84 or 86 seats compared to just 48 in the CRJ-200’s. This is part of Adria’s strategy to operate less frequencies with bigger aircraft, this enables them to offer lower, more competitive prices. Adria will also wet-lease an extra Airbus A320 in 2015 and expects to add five to six aircraft to its fleet by 2016 with aircraft potentially bigger than the A320 (180 seats).

Boeing will increase 737 production to 52 per month in 2018

Boeing announced its plans to further increase monthly 737 production to 52 in 2018, that brings the yearly delivery target to 624 per year. Boeing already announced that it would increase production from the current 42 per month to 47 in 2017, coinciding with the 737MAX introduction in the third quarter of that year. In 2015 Boeing will launch a third 737 final assembly line in Renton (Washington State, USA) to support assembly of the 737MAX test fleet which will start halfway through 2015. The current generation of 737’s, the 737NG, will be produced until the second quarter of 2019 with the last delivery to Ryanair. When all three available production lines will run at maximum capacity, Boeing could produce up to 63 737’s per month in the future. The aircraft manufacturer currently holds a backlog of 4,000 737NG and 737MAX aircraft. — Flightglobal –

Xiamen Airlines considers Nice, France

Chinese company Xiamen Airlines considers launching flights to Nice (France) as its first long haul route, later this year. In September Xiamen government functionaries paid a visit to Europe. The new route will probably be operated by the new Boeing 787-8, of which Xiamen Airlines received the first one in late August. It would be only the second European destination served from Xiamen, in addition to the 3-weekly flights to Amsterdam, operated by KLM Royal Dutch Airlines, this route is operated by Boeing 777-200ER aircraft. — CH-Aviation –

China Airlines and China Eastern take delivery of their first Boeing 777-300ER

In late September China Eastern took delivery of its first of twenty Boeing 777-300ER’s, in a new paint scheme. The Chinese airline will use the new aircraft on routes to North America, starting with Shanghai (Pudong) to New York (JFK) on November 15th, replacing Airbus A340-600 aircraft. The new 777’s are fitted with six First Class suites, 52 Business Class seats (1-2-1 configuration) and 258 Economy seats (3-4-3 configuration). This 777-300ER was also the first aircraft on which China Eastern introduced its new


 On 3 October, China Airlines (Taiwan) celebrated delivery of its first of ten 777-300ER’s. The airline launches 777-300ER operations to Hong Kong this month and will later introduce the type on North American routes such as Los Angeles, San Francisco and New York (JFK). The new type is fitted with 40 Business Class seats, 62 Premium Economy seats, 30 Economy Family Couch seats and 226 regular Economy Class seats. The Family Couch seats are a version of the Skycouch seats introduced by Air New Zealand, also on the 777-300ER. — China Airlines/Boeing –

Alitalia retired Air One brand

Part of the new Alitalia, after the strategic deal with Etihad Airways, is the closure of Air One, which happened on September 30th. Air One was once the second largest airline in Italy, when it merged with Alitalia in early 2009, part of a deal to save the biggest Italian carrier. Air One was transformed into a low-cost subsidiary as Air One “Smart Carrier”, operating 10 Airbus A320 aircraft with 180 seats. Air One had bases at Milan-Malpensa, Venice Marco Polo, Catania, Palermo, Pisa and Verona. By the end of October, Alitalia will resume several Air One routes with Alitalia-branded aircraft. — Alitalia –

Air China takes delivery of first Boeing 747-8i

After Lufthansa, Air China is only the second airline to take delivery of the latest passenger version of the iconic Boeing 747. The new 747’s are fitted with a total of 365 seats, 12 in First Class, 54 in Business Class and 299 Economy Class seats. On October 26 the first of seven 747-8i’s will start operating from Beijing Capital (PEK) to Guangzhou and Shanghai Hongqiao, followed by Chengdu in December. International flights will begin in early January, flying daily between Beijing and Frankfurt (Germany). — Air China –

More revenue for easyJet thanks to Air France strike and expects higher profit

While Air France lost tens of millions due to a two-week pilot strike, easyJet received 6.4 million Euro, or 5 million Pound of additional revenue thanks to this strike. Combined with lower fuel costs and beneficial currency effects, this is one of the reasons why easyJet now expects a higher profit for the financial year which ended on September 30, the British low-cost airline now expects between 575 and 580 million Pounds of profit (EBT) compared to 545 to 570 million Pounds before. EasyJet will present its annual results on November 4. — easyJet –

Cimber will cease operations from April 2015

Danish ACMI operator Cimber will cease to exist as from April 2015 as SAS Scandinavian Airlines decided to terminate its ACMI contract with the carrier. Cimber wet-leases five Bombardier CRJ-200’s and one ATR72 to SAS, the only customer and foundation of Cimber’s existence. Cimber was born from the ashes of low-cost airline Cimber Sterling in May 2012. 150 jobs will be lost, though the management is looking for alternatives for the company and its staff, the future doesn’t look bright. Cimber experiences the same fate as Contact Air (2012) and Augsburg Airways (2013) when Lufthansa stopped its wet-lease contracts with these operators. Conact Air was taken over by OLT Express Germany, but that company ceased to exist only a few months later in January 2013. — Cimber –

Airbus rolls out first delivery A350-900 for Qatar Airways

Airbus unveiled the first A350-900 (MSN006) for its launch customer Qatar Airways in Toulouse (France). Qatar Airways expects to take delivery of its first A350 XWB in December 2014. Airbus recently received Type Certification from EASA for its newest aircraft type, powered by Rolls Royce XWB engines. Qatar Airways and Airbus are now working closely together towards delivery, finishing the cabin interior and executing ground and flight tests. Airbus currently holds 750 orders from 39 customers for the A350XWB, competing with the 787 and 777(X) of Boeing. — Airbus –

JAL Express merged with JAL Japan Airlines

JAL Express was a fully owned subsidiary of JAL, but is now fully integrated in its parent company since October 1. It was decided during a directors meeting in March 2014 that JAL Express would be integrated in JAL in the form of a simplified merger, with JAL absorbing JAL Express’ assets and liabilities. JAL took this decision to stabilise its domestic network, having better control over its capacity and product offer. JAL Express operated 41 Boeing 737-800 aircraft on its domestic network as well as under wet-lease operation for parent company JAL. All aircraft will be repainted by 2016 — JAL Japan Airlines –