Handling a new idea in Ethiopia
Kaleyesus Bekele looks at the impact made at Ethiopia's Addis Ababa Bole International Airport by ICAS, the first private ground-handling company.
Private investment in the ground-handling service industry in Ethiopia was non-existent until recently.
The state owned national flag-carrier, Ethiopian Airlines, was the only ground-handling service provider until 2015, when International Cargo and Aviation Service (ICAS) joined the market.
ICAS was established in 2005 as a logistics and cargo management company by MIDROC Ethiopia, an investment conglomerate owned by Ethiopian-born Saudi billionaire Sheik Mohammed Hussein Ali Alamoudi.
Sheik Mohammed is commonly referred as the “father of the poor” in Ethiopia, as he always extends a helping hand to the country’s needy. Besides his philanthropic works, he is known for his strong conviction that Africa needs more investment than aid. His belief is evidenced by his range of investments in several African countries.
MIDROC Ethiopia, and its affiliates, has established more than 150 companies in Ethiopia with an investment amounting to $20 billion. Manufacturing, mining, agriculture, agro-industry, textile, hotel, tour and travel, catering and aviation are among the long list of investment ventures in which he has an interest.
Managed by Derege Yessuwork, an Ethiopian entrepreneur, ICAS launched operation in 2005 by managing the Ethiopian Customs Authority’s main cargo warehouse and providing logistics and cargo-handling services.
ICAS operates a modern cargo terminal at the Addis Ababa Bole International Airport and owns cargo-handling machineries and trucks.
In 2007, ICAS secured an investment license from the Ethiopian Investment Agency that enabled it to provide ground-handling services in Addis Ababa Bole International Airport. After securing the license, ICAS procured the latest handling machineries and equipment from French company TLD, at a cost of $15 million. This included cargo forklifts, push-backs, towing tractors, ground power units, air starter units, air conditioning units, passenger steps, and passenger busses. Luxurious vehicles like Ford Lincolns and Audis were also imported for VIP passengers. The company’s total investment exceeded $20 million.
Mehari Abate, ICAS transit, warehouse and delivery service manager, said that although the company acquired all the required machinery and equipment, it could not launch its ground-handling service as planned in 2011 because of policy-related technical issues. “Since this was the first privately owned ground handling company, certain provisions had to be made,” he explained. “The necessary steps had to be taken by the Ethiopian Civil Aviation Authority (ECAA) and Ethiopian Airports Enterprise (EAE) to allow ICAS to conduct operations.”
After long deliberations with senior government officials, ICAS secured its operation license from the ECAA in October 2014.
“We prepared operating manuals and they were evaluated and approved by the ECAA,” Abate said. “All our ground-handling machines and equipment, as well as our cargo terminal, were inspected and approved by the EAE.”
Abate said that since investment in the ground-handling service was non-existent, there was no readily available trained manpower in the market. “We want to cater a premium ground-handling service that meets international standard. We imported the best equipment available in the international market. But, qualified and certified personnel were not readily available,” he explained.
ICAS recruited fresh university graduates and offered a one-year rigorous training programme in Addis Ababa. It also hired a prominent Greek ground-handling service company, Goldair Handling, to train its staff and also perform the daily operations alongside the local personnel.
Now, ICAS has more than 100 qualified and certified ground-handling employees. In addition to offering training programmes Goldair has been mentoring ICAS, enabling it to offer a world-class service.
Today, ICAS provides passenger-handling, ramp-handling and cargo-handling services for scheduled and non-scheduled flights to Addis Ababa. It has the capacity to look after four aircraft at a time.
When it launched its fully fledged ground-handling service in 2015, Qatar Airways was the launch customer. “When we became operational in November, the giant Gulf carrier was our first customer. Since then we have been serving them and they are happy with our services,” Abate said.
ICAS also operates a partial ground-handling service to Kenya Airways. “We handle passengers of KQ,” confirmed Abate.
In addition to the scheduled flight services, ICAS provides ground-handling services for executive flights coming from different parts of the world. “We handle business jets and give ground transportation to VIP passengers to their hotels and any locations in or out of Addis Ababa with luxurious vehicles,” Abate said.
Sister companies Trans Nation Airways (TNA), Addis International Catering, Sheraton Addis and its affiliate car rental company, ABC, are working closely with ICAS.
“We are trying to attract more airlines. Our marketing and management team are approaching international airlines flying to Addis Ababa. There are also carriers who are approaching us by themselves in search of better services,” said Abate. “Currently, there are on-going negotiations with different airlines. We are also trying to expand our ground-handling service to charter flights. We are dealing with aircraft management and flight facilitation companies that manage executive flights in the Middle East and Africa.”
Speaking of the challenges ICAS faces Abate said: “As we are the first private ground-handling company there were many policy issues that we had to deal with. Our licensing process took a prolonged time. We had 120 employees and we did not lay off any of them for more than eight years, even though we were operating at a loss. Now, most of the problems are solved and the ECAA and the EAE are assisting us with the infrastructure requirements.”
The company has not been profitable due to the prolonged time it took to secure the operating license. It has been subsidised by MIDROC Ethiopia and that will need to continue until it manages to get more carries on board.
The lack of availability of trained manpower is also a challenge along with congestion at the airport. “You do not find adequate working space at the airport. We need space for an office at the passenger terminal but it is congested. The EAE is now expanding the passenger terminal so we believe that the problem will be solved once the massive expansion work is finalised,” Abate said.
ICAS has proposed to build a luxurious VIP lounge at the new passenger terminal that the EAE is constructing at the airport. The lounge would host VIP and commercially important passengers. “Officials of the enterprise have accepted our proposal with delight. They told us that they would deal with our request once the construction of the new terminal is completed,” said Abate.
ICAS has a plan to branch out into other African countries. “Once we make ourselves successful in Ethiopia, we will open branch offices in other African countries,” confirmed Yessuwork.