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Policy Brief - How they did it Vol. 2 Issue 1 - The Journey of Ethiopian Airlines
Despite sceptics who believed Ethiopia lacked the comparative advantage to adopt the latest aviation technologies, Ethiopian Airlines (EAL) has in the past seven decades narrowed the gap between itself and leading global players in the aviation industry by upgrading its technological, organizational, and management capabilities. This paper reviews EAL’s journey to build an internationally competitive airline, explores the challenges and complexities of learning for African firms, and examines implications for capability building and catch-up in late-latecomer countries. One key to EAL’s success was the partnership with a leading global player, TWA. Another was a strong commitment to “Ethiopianization” from an early stage, which increased learning intensity and highlighted the industry’s narrow latitude for poor performance. In the early 21st century, EAL embarked on Vision 2025, at the heart of which are technological capability development, skills formation, aggressive new market development, and commitment to Pan-Africanism. The story shows that African firms can successfully move closer to the productivity frontier in a particularly challenging industry.
Keywords: Learning, capability building, catch-up, Ethiopia, aviation industry, intensity of learning