Ethiopian Airlines and how it communicated with its stakeholders during the COVID-19 pandemic is a good case study on how airlines can build trust as the industry is set to take off again, offering lessons to our own country in South Africa.

As African airlines are set to convincingly surge this year, with IBA suggesting that the sector will grow at a compound annual growth rate of 4.7% from this year until the end of the decade, it is vital that all airline operators act in a manner that is transparent and in accordance with good governance principles if they are to live up to this promise.

This is particularly important as South Africa ramps up efforts to promote the country as a premier tourist destination with the resumed operation of the national carrier, South African Airways (SAA), and strengthened partnerships with Emirates Airlines in the form of codeshare agreements.

When it comes to implementing best practise in the areas of good governance and transparency, Ethiopian Airlines – Africa’s largest operator – is a good example of sustainable success, especially when it comes to reimagining itself when needed.

King IV requires organisations to be transparent in how they apply their corporate governance practices and make these accessible and relevant to the public. As such, how performance, resource allocation challenges and sector forecasts are communicated should be democratised and made consumable in a manner that stretches beyond traditional performance measures.

There is a need to do away with financial retorts and jargon, as these create a perception of intentionally being opaque and lend themselves to mistrust from the public. It is also important to engage the public in a way that strips out noise created by those who wish to detract from the facts and try to insert messages that are not in the best interests of a national carrier.

As the aviation industry becomes more competitive, complex and recovers from the lasting implications of the COVID-19 pandemic, the principle of transparency is increasingly important and is central in how a national carrier is perceived, while also indirectly affecting any efforts towards sustained profitability.

In terms of communicating with stakeholders, from shareholders to staff and passengers, being transparent means providing reliable and relevant information on how a national carrier performs in a way that allows it to be efficiently evaluated and held accountable in terms of its public responsibility.

A case in point is how Ethiopian Airlines impaired information during the unprecedented times of the COVID-19 pandemic. The aviation sector was one of the worst affected industries of restrictions as aircraft were grounded for months due to global lockdowns. Ethiopian Airlines was, however, in the position to be the only carrier on the continent that could continue flying during this time as it took the strategic decision to start moving cargo instead of passengers.

In accounts to the Ethiopian public in various forms, the airline pointed to several key challenges during this period, including a loss of US$550 million because of international flight restrictions due to the COVID-19 pandemic and having to reduce operational capacity by 90%.

In addition, it clearly communicated the steps it took in terms of how it was meeting the challenges, which meant there was minimal public pressure and it increased public buy-in into the measures the airline was taking to mitigate the crisis and the effect on its operations.

Strategic decisions taken included converting a significant number of passenger jets to bolster the Ethiopian cargo fleet, a partnership with the World Food Programme and the establishment of a humanitarian transport hub at Bole International Airport in Addis Ababa.

Why these steps were important was clearly communicated, as was their implication that the airline would avoid seeking a bailout, would not have to retrench, and didn’t fall foul of debt obligations. Providing such updates in a timeous and clear way allowed the public to understand and gauge what each decision meant in real terms.

While the continued success of Ethiopian Airlines is not a one-size-fits-all solution, the governance principle of transparency is universal. An initial step of all recovery, and turnaround, efforts should be a transparent relationship with the public. This lends itself to public trust, which is the underlying currency to profitability.

Transparency also allows for meaningful analysis and accountability of a company’s decision-making process, both of which are key requirements for any sustained commercial endeavour. Stakeholders in South Africa’s national carrier would benefit from implementing similar measures to guide the airline towards profitability and enhance public trust.