A MOMENT OF RECKONING: THE SURVIVAL OF ETHIOPIAN AIRLINES

By Tecola W. Hagos

I. In General (Background)

Last week, The Reporter quietly sneaked in an article of monumental significance on the hiring of Ghanaian pilots to replace some Ethiopian veteran first-rate pilots who had left the Company for a number of legitimate reasons, least of which is the unbearably oppressive government and social condition prevalent in Ethiopia currently. This new Ethiopian Government policy of hiring foreigners in order to undermine the legitimate demand of the workers of the Ethiopian Airlines opens up a door towards the destruction of the quintessential Ethiopian symbol of success�the Ethiopian Airlines.

This new Ethiopian Government policy to replace Ethiopian Airlines workers by foreigners is a stab at the very heart of Ethiopia, its history, and its people by a notorious leader whose hate for the country and contempt for its citizens has no bounds. The current decision to replace Ethiopian workers with foreigners does not surprise me at all. If Meles Zenawi had the capacity to drive out all Ethiopians and replace them with subservient people, he would have done that a long time ago. [On questions of subservience, we too are getting dangerously close to such condition.] In fact, reflecting on some of the events that took place in the 1991-92 period, it seems that what is happening now to the Ethiopian Airlines is all in Meles Zenawi�s short and long term immature plan to reshape the political face of Ethiopia and the region.

The first step in 1991 the current Prime Minister took was to direct and focus his destructive eyes at the Ethiopian Airlines. He was raving and ranting to his subordinates in the EPRDF how the Airlines was a money-losing venture and not serving the public transportation needs of most of the people of Ethiopia. He had a number of his advisors and associates check on the airlines to see if there could be a case made to dismantle the Company. Nobody except very few sycophants seemed to heed the raving and ranting of Meles Zenawi against the Ethiopian Airlines at that time because of the greatness (almost of mystical proportion) of the Ethiopian Airlines and its employees in running a first rate Company. Meles even tried to divide the company and give a part to Issaias Afeworki to start an �Eritrean� Airlines. At a later date, Meles also tried to change the name and the logo of the Airlines. At any rate, Meles Zenawi�s effort to dismantle the Ethiopian Airlines was unsuccessful and was not followed through until now fourteen years later wherein the strategy is not to destroy but to steal it from the Ethiopian people.

On one such occasion of overreaching by Meles Zenawi and associates to dismantle Ethiopian Airlines, I was invited along with leaders from the EPRDF [Kassu Illala, Dawit Yohannes et cetera who were trying to spread the line by Meles Zenawi that the Ethiopian Airlines was a money-loser company] in 1991 to be debriefed on the status of the Airlines by senior members of the Airlines administration and engineers. I was impressed with the authentic Ethiopianness of the Ethiopian Airlines where senior managers, pilots, engineers, and experts in several areas were displaying to the invited guests the sophistication and thoroughly professional management structure and the highly acclaimed technical proficiency of its mechanics, engineers, and experts in all areas. I witnessed first hand terminals and garages, equipped with the technologically highly advanced tools, some enormous machines a couple of stories high, being run by highly trained, greatly efficient Ethiopians at all levels. The whole Company reminded me of beehives because of the way the many Ethiopians I met at their stations of work were running the many shops and departments of the Airlines with such dedication and efficiency.  

I came to know two of the most senior officers of the company, its Chief Financial  Officer (Manager), who unfortunately died of sudden illness soon after my introduction to the Airlines, and its General Manager, an experienced former first-class senior pilot, whose professionalism and graciousness in explaining to me how the Company was run was permanently etched in my memory. Later in that year, I renegotiated in New York City some refinancing for a loan to be used to purchase an aircraft from Lockheed/Martin for the Ethiopian Government (saving it about seven million dollars) to be maintained by the Ethiopian Airlines. I was awed and greatly filled with pride with the Ethiopian Airlines as a genuine Ethiopian success story and with the great skill and dedication of its employees (pilots, engineers, mechanics, flight attendants et cetera). In my report to Tamrat Lyne the Prime Minister of the Transitional Government and other senior EPRDF leaders, I expressed my views of great admiration for Ethiopian Airlines and urged the leadership of the EPRDF and the Transitional Government to expand the Airlines� pilots and technical experts training capacity and to open new facilities. I also suggested that a new home be found for the Airlines further north on the way to Debre Berhan where there are such vast areas with solid ground and of marginal value for farming that would be most appropriate for a new Airport away from the congestion of a sprawling City and poor landing fields. (The runway at Bole Airport is built on soft grounds of alluvium soil, in some areas exceeding the depth of fifty meters, requiring constant repairs and maintenance at great coast. The whole Bole area is a rich farmland unfit for building any structure of such industrial complex.)

One must recognize the indisputable fact that Ethiopian Airlines is quintessential Ethiopian, and it represents the best of Ethiopia. It is our national symbol and must remain so being staffed and led by Ethiopians at all levels. The ongoing watering down of the distinctly Ethiopian characteristics of the Ethiopian Airlines is part of the contemptuous disrespect of Ethiopia by Meles Zenawi and associates. Let us not forget the fact that the current government of Ethiopia led by Meles Zenawi is the same government that was willing to give away Ethiopian territory and land lock Ethiopia for all of future generations of Ethiopians. The current scheme to hire foreign pilots rather than train and pay well Ethiopians is a horrendous process that is going to affect several generations of Ethiopians. I hold the view that not only the principals but also their children and grandchildren are responsible for all the pain and suffering they have caused us all. These are the people and generations of people who are the enemies of the Ethiopian people.

II. Prelude to Privatization

I smell a rat in the hiring of Ghanaian pilots, no fault of the Ghanaians per se. We must acknowledge the fact that anywhere else in the world replacing about five percent of the labor force by foreign �scab� workers in any company would have resulted in violent riots. The weakening of the Ethiopian Airlines is being carried out by weakening its strong labor forces and professional parts first. Ethiopian Airlines used to have several labor unions, and the strongest labor union at the Airlines used to be the Pilots� union. If there was any attempt to privatize the Airlines, the Pilots� union would block any such moves because of the members� tremendous nationalism and effort to preserve the one great public corporation owned by the Ethiopian people through the Government.

I have no personal animosity with any Ghanaian. In fact under normal political and economic situation, I would prefer to hire skilled workers from other African countries than having the employees of African Union, Economic Commission for Africa, and several other international organizations and their corrupting influence in Addis Ababa. However, the situation created by the Ghanaian pilots participation in the scheme concocted by Meles Zenawi and company leaves me no room except to see them adding and becoming part of our enormous problems. They have no business compromising the rights and privileges of Ethiopians by accepting such employment. If the situation were otherwise, wherein Ethiopian pilots were being employed by Ghana, all Hell would have broken loose by now. I urge the Ghanaians to leave immediately the destructive role they are playing.

The hiring of workers from other countries in a country like Ethiopia (a country that is under tremendous social. Political, and cultural turmoil) the poorest nation on Earth, is the most irresponsible and extreme act of betrayal by a government. Even on moral grounds, let alone business, hiring foreigners at a time when unemployment rate in Ethiopia is over fifty percent, and in that particular sector of the economy a question of life and death for Ethiopians. It is absolutely irresponsible and stupid to add to our existing problems by hiring foreigners in mass in our flagship company. I have read some comments defending such hiring as an example of �globalization� at work. Some individuals have even tried to draw analogy with Ethiopian doctors and other professionals leaving Ethiopia for better pay elsewhere in the Western World, mainly the United States, with the present hiring of Ghanaian pilots in mass by the Ethiopian Government owned Airlines. Such ideas proved more that �globalization� is inherently defective when applied to a poor nation rather than support the views of the great advocates of such failed economic schemes.  

The one corporation that is absolutely making money, with hard currency cash flow in its day-to-day affairs, is the Ethiopian Airlines. The Ethiopian Airlines is even more attractive to greedy individuals with money than the legendary Ethiopian coffee business because of it being a year round non-seasonal source of cash flow. It is a sure system of safe conversion of local currency into hard currency. As it had been pointed out by several media outlets, the monopolization of business in Ethiopia by Meles Zenawi and close associates in the guise of Tygraei development programs of investing in businesses has no bounds. What is more attractive to such individuals than to privatize Ethiopian Airlines and by its assets and thereby add it to their privately controlled business empire? Meles Zenawi, who started out life as a small-town boy and who grew up to become the Prime Minister of an impoverished nation, in the last fourteen years has tested the good life of an imaginable luxury of wealth and power.

For individuals who grew up in utter deprivation in small towns, as were Meles Zenawi and most of his associates now Millioners, the lure of money has become ever greater than what we have witnessed so far in Ethiopian history. It is a national tragedy that we have witnessed in the last government and this one now, that poor semi-urbanized peasants from different parts of Ethiopia who are now in power could in such a short time completely forget their humble backgrounds and become consumed with material acquisition that they would murder, violently oppress, and dehumanize their fellow Ethiopian brothers and sisters. Sadly, individuals of such moral bent would do anything to have their hands on such great asset like the Ethiopian Airlines. They have already monopolized most of Ethiopia�s import and export businesses including the lucrative coffee export business. What is also tragic is that these people are not only greedy but also jealous of anyone else getting paid well or getting rich. The �dog in the manger� parable is very much applicable to our new Millioners. We are looking at the Ethiopian Mafia at work.  

III. A Disastrous Economic Policy

The Reporter interview of August 6, 2005, which has not been contradicted by any statement either from the Ethiopian Government or the Ethiopian Airlines, clearly shows the motive of the Board and Management of the Ethiopian Airlines for bringing seven Ghanaian pilots to be hired by the company a couple of weeks ago. �Kagnew Fisseha, public relations head, told The Reporter that the growing number of fleet and the departure of some Ethiopian pilots compelled the national flag carrier to hire foreign pilots. Kagnew said the airline could bring more foreign pilots in the future. The Ghanaian pilots who arrived on Wednesday will take flight training before they start commercial flights. The pilots served Ghana Airlines that recently went out of business. The pilots will soon sign contractual agreements.� [See the full text of the report at the end of this article] The decision is a clear indication of a failure of the management to anticipate and plan for the future of a growing industry.

One must not think of economic problem as if it is a separate and distinct problem from political problems. Foremost in Ethiopia is the fact that Ethiopia is under a brutal dictatorship. The fact of the oppressive system of government in Ethiopia has perverted and corrupted all economic relationships in the country. It has also affected the social relationships and culture of the nation as well. When it comes to particular businesses such as the Ethiopian Airlines, the issues of conducive political and social environments are even more magnified because of the type of professionalism involved in running such a lucrative world-renowned company. The problem of poor pay, poor benefits, uneven development of the Airlines capacity et cetera are simply the tip of the iceberg of hidden and not so hidden political problems facing the nation as a whole.

Long before the buying of expensive planes, the Ethiopian Government as the owner of the Airlines should have taken the necessary steps to have the Airlines upgrade its training program for both pilots and technical (mechanical) personnel. The scheme underway of hiring foreigners in the flagship of a nation is aimed at marginalizing the labor problem the Ethiopian Government has with the employees of the Airlines. By introducing a large number of foreign workers the Ethiopian government is watering down the potency of the labor unions of the Airlines.  Ethiopians in other industries must also be weary of such diabolical scheme by Meles Zenawi and associates. Ethiopia, a nation burdened with high unemployment rate already, cannot afford to have its very limited work force further dehumanized and threatened with scab replacements.  What is next, to replace Ethiopian teachers, professors, bankers, government workers?    

There are several international instruments that may have some bearing on the problem  now faced by Ethiopian Airlines, least of which ILO�s several conventions and guidelines. The United Nations Convention on Contracts for the International Sale of Goods (1980) is probably excluded in the contract of purchase and financing of this nature (aircrafts for a national airlines). However, that does not exclude limitations on the purchaser�s business management practices to follow reasonable standards of management of the trade and prudent decisions thereof. I am not speaking from a vacuum with some imaginative legal footwork. There are numerous examples where international conventions and guidelines on labor issues had been invoked to resolve labor problems such as the one dealing with the hiring of foreign pilots permanently replacing Ethiopian workers in large numbers, over five percent of the professional work force.

The House of People's Representatives of Ethiopia adopted Labor Proclamation No. 377/2003 effective from 26 February 2004. The Labor Proclamation No. 42/1993 (as amended by Proclamation 88/1994) was repealed thereof. What is alarming in the new labor legislation is the fact that most workers are being excluded by Article 136 (3) from the ranks of workers with rights to strike and take necessary steps to protect their workers� rights. They are now categorized as workers performing �essential Public service undertakings� as defined in Article 136 (3) that includes workers in  air transport,  undertakings supplying electric power, undertakings supplying water and carrying out city cleaning and sanitation services, urban bus services, hospitals, clinics, dispensaries and pharmacies, fire brigade services, and telecommunication services. By such reckoning, only shoeshine boys may be the ones left alone to form trade unions. As you can see, the problem is deeply entrenched in the very essence of the brutal and violent government of Meles Zenawi.

For example, in a 1999 labor dispute Germany�s leading tire producer, Continental, was involved in a highly publicized dispute over a long-running strike at the company's General Tire plant at Charlotte (North Carolina, USA) because it hired permanent replacement foreign workers. The unions accused Continental of contravening ILO standards and the OECD guidelines for multinational companies by permanently replacing striking employees at Charlotte with new recruits contrary to the Declaration on international investment and multinational enterprises, guaranteeing freedom of association and of trade union representation, as well as fair labor practices. "It was claimed that practically all of these principles are undermined by the company's behaviour. Although the American labour courts has made no final decisions as to whether Continental's hiring of permanent replacement workers is legal under US legislation, the unions also called on the US government to ensure better legal protection against permanent lock-outs." There are also cases involving airlines workers strikes with similar issues as the case with Continental.

IV. Possible Breach of Contract

Even a first-year law student will tell you that the contract of purchase of expensive restricted equipment or aircrafts is considered as a very special case. The Ethiopian Government as owner of the Airlines and its ultimate guarantor, the insurer of both the business and the individual aircrafts, is fully participating in the financing arrangement set up by holders of the financial notes involved. Banks or holding companies created for such purposes usually hold the notes. Unusual circumstances increases the possibilities of default or breach of such terms of the purchase agreement, and the holders of such notes due to such heightened risk because of improper maintenance, operation et cetera of the aircrafts may take all kinds of steps to minimize any possible loss. The hiring of foreigners under hostile environment of labor unrest may trigger any number of negative actions by note holders and insurance companies among which repossession of aircrafts, the increase of collaterals to the purchaser of such aircrafts et cetera are a few of the steps that may happen any time soon.

The purchase and financing of aircrafts may sound quite complex, but under all that layer of legal mumbo jumbo, the idea is simple precaution to make sure that the business transaction undertaken by each contracting party is a sound one. Finance and insurance companies as well as note holders would like to make sure that there are no hidden surprises, or loopholes through which duties or interests may be overcome not through proper discharge or vesting of rights but through �cleaver� legal technicalities and deceptions. Such businesses do not want to enter into businesses where recognized management and accounting standards are not respected. It is of paramount importance that the note holders be paid according to agreed upon schedule of remittance regularly, and that the note is secured properly, and that it remains negotiable or assignable. Any newly created negative event (such as the hiring foreigners in large numbers) by the party issuing the notes would certainly be a serious event that would trigger all of the safety mechanisms built into the purchase agreement. The hiring of �foreign pilots� may be considered as a major shift of policy that may be considered as breach of some sort by the note holding companies.

The way a government deals with problems of labor relations is of paramount importance to all lending financial institutions including the development banks. Aircrafts are highly mobile assets, which means there is tremendous risk involved for failure of the business. The statistical data in Africa and elsewhere in the world of airlines going out of business is tremendous. The Ethiopian Government, by its hiring of foreign pilots rather than negotiating in good faith to meet the demands of the workers of the Ethiopian Airlines, is simply introducing short-term solutions to deeply seated problems that will further increase dissatisfaction and more strikes and even illegal actions by such marginalized employees of the Airlines.

The problem I am discussing herein is real. Suppose there is a horrendous accident where hundreds of passengers lost their lives or are mimed seriously, then starts the challenge by insurers on questions of prudent business practices and decisions. The hiring and firing of crucial members of the business may indeed be seen as part of the �contributory� negligence defense on the part of insurers not to pay up portion of their liabilities. Even more serious is the astronomical increase of the amount of liability on the Ethiopian Airlines from its standard term covering of such risks if negligence is attributable to its operation of the Airlines�a devastating blow to any carrier.

The Ethiopian government by its �cleaver� strategy is creating a situation that will prejudice the international relationship of the Airlines (Ethiopians) with other African governments and peoples. Any dissension by the Ethiopian employees against the management of the Airlines will be simply casted as a racist or narrow nationalist rejection of other African employees by Ethiopian Airlines workers, which would trigger all kinds of retaliatory action by other African governments and workers that service Ethiopian Airlines in its many stopovers around its routs, including possible devastating sabotage. The government of Meles Zenawi once more has exposed Ethiopia to a dangerous situation in its international relationships. 

Conclusion

These days, saying Ethiopia is at crossroads has become a clich�. Therefore, I will not use such expression. However, I see us at the very edge of an abyss. Please, take a moment and just reflect on our present political, economic, and social conditions. We have a leader who had committed treason after treason against his own �country,� and is digging in on doing further damage through a bogus election vote counting which took him to tide up three months of manipulation. He finally  came up with an ingeniously constructed majority that will allow him to form a government under a constitution designed solely for his own benefit.  Our economy is in shambles with the poverty index lower than any time in our history. Our culture, home life, and the moral content of our social life eroded to such an extent we could not even protect our young daughters from being lured into a life of being used as sex objects by numerous foreigners working for international organizations and numerous Embassies in our Capital City of horror and endless debauchery.

Shame and more shame on us all, that we have no courage,  guts, or moral outrage to fight back such a despicable leader and his thugs of hit men and women from completely destroying us all. Shame on all of the national governments and international organizations that have offices and placed their immoral employees in our midst. The day of judgment is not that far off. Soon Ethiopians will rise in unison with tremendous force of revenge and cleanse the horror and filth pilled on us for the last forty years by our leaders and scavenging foreigners. Courage my brothers and sisters, after all you and I are children of great heroes, and deep in our psyche we will find the elements we need most to free our people and country from such extreme bondage. END

Tecola W. Hagos

The Reporter,  August 6, 2005

Kagnew Fisseha, public relations head, told The Reporter that the growing number of fleet and the departure of some Ethiopian pilots compelled the national flag carrier to hire foreign pilots. Kagnew said the airline could bring more foreign pilots in the future. The Ghanaian pilots who arrived on Wednesday will take flight training before they start commercial flights. The pilots served Ghana Airlines that recently went out of business. The pilots will soon sign contractual agreements.

EAL has 27 aircraft and 200 pilots. In the past two years, the airline bought eleven aircraft (Boeing 767-300 and Boeing 737-700). The airline began a fleet modernization program in November 2003 and the first phase of the program concluded last week with the arrival of a new B737. The second phase of the program will begin with the delivery of B787, the ultra modern dream liner aircraft, in 2008.

Members of the Ethiopian cockpit crew are resigning from the airline in the quest for better payment. Recently more than ten senior captains who had served the national liner for over 20 years left the company for good. The big airline companies in the Middle East and Far East are offering attractive salaries to Ethiopian pilots, especially to the captains that Ethiopian can't pay. Girma Wake, EAL's Chief Executive Officer, told The Reporter that the airlines in the United Arab Emirates and Singapore pay a monthly salary of six to seven thousand dollars to Ethiopian pilots. Girma said since the airlines in the Middle East rolling in petrodollar pay fat per diems. They also provide spacious houses and luxurious cars for free. The pilots' children school fees are covered by the companies. Here most of the pilots earn less than 500 dollars and because of the irresistible offers the Ethiopian pilots are leaving their homeland to join the big airlines in the Middle East . The salaries of the Ghanaian pilots is not yet known.

Last week EALs management made a 20 percent salary increment to all its employees. There are 4,250 employees working in the company. But pilots are not happy at all. The management is trying to retain the disgruntled cockpit crew. Despite the turbulence caused by terrorism and the inflated fuel price in the global aviation industry, the 56-year-old airliner has succeeded in registering a considerable huge amount of profit in company's success story. _____________________________________