Tuesday, 9 January 2018

Emirates gives Stansted a real long haul network.

Emirates' addition of Stansted to its London portfolio from summer 2018 comes as no surprise. The arrival of a major Gulf hubber is overdue and brings to the airport the powerful proposition it has to airports all over the world, often to the chagrin of an incumbent national carrier. Very simply it's one stop daily to almost anywhere in the southern or eastern hemisphere. That's powerful enough and if it becomes twice daily or even more it can be overwhelming. Hence protectionist mutterings in some corners , including currently the USA, but a great reluctance by many governments to do much about it..The benefits /revenue from inbound tourism and business travel are increasingly understood to be worth way more than keeping a creaking legacy carrier alive.

Stansted itself will be delighted. Its longer haul routes so far have been tentative single spokes into the USA usually with secondary fleets . They were never going to be game changers. Emirates is exactly that. It offers half the world to a substantial market located within an arc sweeping from central London , including the Canary Wharf financial centre, through Essex, East Anglia including Cambridge, and anywhere east of the A1 and East Coast Main Line.That's a lot of people and a lot of money.

This will be one to watch. Assuming Stansted launches successfully will Emirates quickly double their frequency, partly to discourage imitators, or will we see Qatar or Etihad join the fray? Our guess is that these will spectate for while and see what happens before making any move. Turkish, always an avid collector of additional spokes, might though just jump the gun with a narrowbody to Istanbul. The game is on.

African Roundup October November 2017

African Roundup   October - November 2017 

South African Airways has been handed yet another recapitalization fund the Finance Minister asserting that SAA ‘must be supported’.  The amount this time is to meet debts and operational costs.  But since then the airline has forecast a worsening outturn for 2017-18.  The operating loss will approach US$300m and the outstanding debt will rise to US$700m.  This is a baptism of fire for new Chairman, JB Magwaza, and new CEO, V Jarana. The conditions attached to the money require yet another, board-approved, 5 year turnaround plan to be submitted to Government.  This begs the question of how successful can such a plan be.  The history of the many such over the past 5 or so years suggests it to be unlikely.  The SAA problems reliably escalate faster than the solutions.  But, if the new Chairman and new CEO can strike a strong and mutually supportive working relationship the chances of success will be better.

In Kenya Airways another new Chairman and new CEO relationship is also undergoing a baptism of fire.  First target of his opponents within the airline and government are the four Polish expatriates he hired to give him a cohesive core team and effective control of the airline. The Board’s Staff Committee, which should be standing well clear, is reviewing this, the processes surrounding it etc. It’s not impossible that their educational certificates will in some way be found deficient. That would mean game over for the incomers and presumably the resignation of the CEO, something which might just make people stop and think a bit. With radical financial restructuring nearing completion and the recent disruptive General Election still nit totally resolved, some 40% of the airline’s ground engineers and technicians walked out demanding significant salary increases.  The new CEO moved swiftly and dismissed all the strikers. That’s not popular politically. Court cases loom. In common with other African carriers, Kenya Airways  has seen a steady trickle of engineers leave to join better paying Gulf carriers. That is ongoing anyway and only lifestyle issues prevent a greater flood. Qualified local replacements are rare on the streets of Nairobi; a conundrum familiar to experienced senior management but a big challenge for the new Chairman and CEO relationship to resolve.

On an entirely different front away from the big legacy strugglers is Fastjet , now emerging from a 2 year re-structuring with the launch of new routes based on Maputo and domestic sectors within South Africa still a long way about the original  pan-African vision which turned out to be so beset with obstacles. Old Africa hands were unsurprised. In the interim CEO Nico Bezuidenhout has relocated Head Office from London to Johannesburg, has replaced the A319 fleet with smaller types and brought in experienced South African senior management. New South African shareholder, Solenta Aviation, facilitates network growth through its ownership of AOCs in several neighbouring countries plus the provision of leased aircraft whose owners though are likely to protect themselves from loss by wanting the money for these up front.  The costs of effecting this restructuring have been eye-watering, measured in tens of millions of dollars, but with the opening of the new routes it is just possible that a significant step has been taken towards the original 2012 vision of creating a ‘successful Africa-wide low cost carrier’.

This ‘editorial page’ is too often depressingly dominated by airlines hard pressed seemingly endlessly, trying to recover from debilitating financial performance.  The consistent exception is Ethiopian Airlines.  They live in the same world and must experience business problems but steadily deal with them without fuss . They have in depth highly professional home grown management and long term strategies for the whole business . As result the network, fleet ad frequencies keep growing and a brand new airport designed for connecting business will soon open.  The snapshots below list them discussing with carriers and governments across the continent opportunities to launch new local carriers, to become strategic partners or to provide support; Nigeria, Ghana, Mozambique and Djibouti are but four.  Subsidiaries operate in Togo and Malawi.  Meanwhile their academies in Addis Ababa produces qualified pilots, engineers and other professional specialists.  

Also different is their freedom from political intervention, something that grows within SAA and Kenya Airways by the day. Ethiopia’s governments have always been happy to just let the airline’s management get on with the job.

Down south and off into the Atlantic SA Airlink flights to St Helena are now fully operational.  The weekly ETOPS E190 operates from Johannesburg, with a tech-stop in Windhoek.  A monthly extension to Ascension Island will follow shortly. If booked on it not a flight you want to miss then. Passenger numbers are small but the lower-priced RMS St Helena continues to operate. In February these sailings will stop and Airlink passengers are likely to increase. (Nobody explains how larger items of freight will now reach the island. The EMB might be OK for a washing machine but will struggle beyond that). A possible addition of Cape Town to the routing should also raise load factors.


Ethiopian Airlines is discussing with the Djibouti government the possibility of creating a new joint-venture with state-owned Air Djibouti.  The original airline ceased flying in 2002 but has recently been operating a B737-400 on a limited regional network. The aircraft is supplied by Cardiff Aviation (UK) who have also provided interim technical and management support during the start-up period. Air Djibouti is now under local management.

Zanzibar frequencies are rising from thrice weekly to daily while on the long haul side the Sao Paulo flights are planned to extend to Buenos Aires twice weekly with B787-9s and Chicago is due to join the network in April.

Seemingly untroubled by other operators finding it difficult to make money with pure cargo operations, particularly brand new ones, the airline has signed up with Boeing for 4 B777 freighters to add to its fleet of six plus two B757 conversions. Faced with poor road and rail infrastructure much of Africa has substantial needs for reliable efficient freight operators working through hubs which are organised, really work and don’t build up horrific backlogs. As most countries have imbalances between in and outbound demand clever route planning is needed to minimise low revenue sectors. This produces some interesting regular routings zig zagging around the continent and to Europe. At hubs change of gauge from wide to narrow body presents obvious problems. From time immemorial this has sometimes necessitated the use of widebodies on sectors with low passenger loads but the financial result on every sector thus flown threatens the profitability of cargo overall.

JamboJet (Kenya Airways LCC subsidiary) .The expanded Q400 fleet is enabling a planned opening of regional routes to Tanzania and Uganda in February 2018 and the plan to lease a further two.
There is speculation that the 2 B737s are to be retired (and conveniently returned to Kenya Airways?) leaving an all turbo-prop Q400 fleet by the end of this year. 

Kenya Airways Air France is to be included in the long-established joint venture with KLM currently being re-negotiated. April 2018 is the target completion date lining up with the resumption of Air France flights to Nairobi.
As in our leading paragraphs, the airline is suffering from (another) bout of unhappiness, this time amongst the ground engineers.   
RwandAir hopes to raise the A330 fleet to 4 by taking another 2 in 2018.  The current total fleet of 13 aircraft should total 20 by 2022 with B737s and CRJs being retired. DHC Dash-8s will continue on domestic routes.
In Nigeria the Lagos route will be joined in January by a new separate service to Abuja.
Sudan Airways. The lifting of 20 years of US sanctions gives the carrier hope that scheduled services will again become possible. The long-dormant single A300-600 is being refurbished and returned to flight condition. The 2 A320 plus 14 new aircraft (to do what?) promised by China earlier this year have yet to materialize.


Air Namibia plans Mar2018 return to Accra with four weekly Windhoek-Lagos-Accra A319 services  complete with 5th Freedom Nigeria-Ghana rights.
Congo Airways (DRC) has taken delivery of a wet-leased A319-100.

Fastjet PLC (S Africa) is launching new links in Mozambique and South Africa in the coming weeks.  5 domestic routes based on Maputo will use shareholder Solenta’s Mozambique AOC.  In South  Africa, Fastjet’s network will be based on that of  FedAir, serving ten domestic points.  A branding agreement has been signed.

Fleetwise the first of two E190s, leased from GECAS have arrived . They are to be based in Dar-es-Salaam.  All the A319s  have now departed.

The Mozambique arm of the company launched E145s on 3 domestic routes, Maputo-Beira, Nampula and Tete on 3rd November. Future routes to Johannesburg, Lusaka and Harare have been mentioned. Knitting these in with trans border links to Blantyre or Lilongwe would be interesting but it may be that the different colonial heritage and languages of the two countries mean that apart from in border areas there is little commerce between the two and little inclination to develop any. Indeed such realities may be one of the rocks upon which the original everywhere to everywhere Fastjet visions foundered.

LAM is looking to a consultancy to draw up a 10 year restructuring plan. The options, opportunities and limitations should be fairly easy to identify quickly. Any consultancy agreement should recognise this and be strictly limited in time and cost. The Mozambique’s government has recently granted wide-ranging rights to 7 foreign carriers.  One, Ethiopian Airlines, is evaluating a substantial network based on Maputo.

SAA JB Magwaza, Chairman of Peoples Bank, is appointed as the carrier’s new Chairman.  Controversial previous Chair, Dudi Myeni, is to leave the company.  A new Deputy Chairman plus 4 new non-executive Board members are also appointed.  New CEO, Vuyani Jarana, an aviation outsider, assumed responsibility on 1st November.

Libreville, Cotonou and Douala routes are to drop out of the network early in 2018.

 US$ 702m ‘recapitalsation’ has ben allocated by the government for 2017-18. The amount is to enable debt servicing and operational costs only.  A government guarantee of US$ 1.34 billion has also been awarded.  To raise the necessary funds Government is likely to sell a part holding in Telkom.  A ‘strategic partner’ for the SAA is likely to be sought.
SA Airlink and Safair (South Africa) are to merge with each retaining its own trading identity.  The securing of benefits of scale, “sharing costs and removing systems duplication”, are given as the main reason.  Safair, a profitable business, will become a minority shareholder in Airlink.  Since 2014 Safair has operated a domestic LCC network.  Competition Commission approval is anticipated early next year.
Zimbabwe Airlines putative new carrier to replace Air Zimbabwe announced, and missed, a targeted 9 Nov start of operations with 5 long-haul aircraft plus 6 shorthaul. The project failed to attract financial backing so has now been shelved.


Aero Contractors (Nigeria) once seen as the country’s most promising domestic carrier has reduced its fleet to just 2 aircraft, the minimum necessary to maintain its AOC, whilst grappling with myriad financial and staff problems.

Africa World Airlines (Ghana) has launched thrice weekly ERJ145 services between Accra and Monrovia, adding to the Lagos and Abuja regional network. Kumasi, Tamale and Takoradi comprise the domestic network from Accra.  (Nov2017)

Air Côte d’Ivoire has received its second new A320 following the first delivered in July
Air Senegal took delivery of the first of 2x ATR72-600 ordered in June. An MoU with Airbus for the sale of 2x A330neo, plus 2x options, for delivery in January 2019 has also been signed.  Launch of the new carrier, with a small domestic network, is to coincide with the planned 7 Dec opening of Dakar’s new airport.  

ASKY (Togo) is to re-introduce services in November from Lome to Monrovia, Freetown and Banjul.  

Camair-Co is resuming some regional operations following receipt of US$53m Government subsidy.  Libreville was first, in October, to be followed gradually by Abidjan and Bangui in December and then Cotonou.  
 The company is discussing a possible Commercial Agreement with French carrier, Corsair International, including Corsair operating the Paris route suspended by Camair in September.

Ceiba International (Equatorial Guinea) operations are suspended by the local CAA. Madrid flights continue with a Portuguese-registered aircraft.

Goldstar Airlines (Ghana) Privately-owned start-up was awarded an Air Carrier Certificate covering 11 international routes in Dec last year but continues to await an AOC grant. Original start-up was to be June 2014.  Plans are to start flying with 5x wet-leased Boeing 737s.

Starbow Airlines (Ghana) has added a BAe RJ100 to its existing fleet of a single
BAe146-100 and a single leased ATR72-500.  A domestic network is flown linking Accra with the usual suspects ,Kumasi, Takoradi and Tamale. 

Starbow Airlines (Ghana) has taken delivery of the first, of 2, ATR72-500.  The entry into service was marred by an excursion off-runway in heavy rain. All operations were suspended.

TACV (Cabo Verde) selected Loftleider Icelandic as strategic partner to develop Cabo Verde as a hub linking Africa, Europe and the Americas. On the face of it that looks a bit of a long shot,requiring a lot of investment to be able to provide enough hub synergy to make it work .Having ended all domestic routes in favour of BinterCV the 5 September date for resumption of international operations has been delayed as the single B757-200 undergoes maintenance.


Air Algerie is going through a “difficult period”, says CEO Bekhouche Alleche, as it grapples with “increased competition, overstaffing and heavy indebtedness” prompting a staff freeze. 

Air Arabia Maroc (Morocco) launched a new service Marrakech - Paris CDG on 31 October plus Marrakech - London Gatwick on 1st November. 

Egyptair Fleet upgrade plans include orders for 6 B787s and 15 A320s.

Syphax (Tunisia) has moved closer to re-launching ops as Maghreb Airlines.  Heavily debt-laden Syphax was placed in judicial administration in 2015. A reorganization plan has been court approved.  


Air France .After an 18 years absence, the French carrier is returning to Nairobi thrice weekly with a B787 in April 2018, 3pw, B787.
Air Malta plans to re-start Casablanca in April 2018.   

Alitalia is another former player planning to return to Kenya, this time with four weekly A330s and to South Africa with four weekly Johannesburg operations. The late March beginning of summer schedules is the likely date.

Brussels Airlines increased Abidjan frequencies to daily and Accra to five weekly on 28th October.

Norwegian Air Argentina LCC has named Johannesburg in its long term planning for flights from Buenos Aires.  Established in Jan 2017, the Norwegian Airlines subsidiary has received Argentina NCAA approval to operate domestic and international routes.
Turkish Airlines network tentacles spread further with the February launch of a Istanbul-Ouagadougou-Freetown route.
 Ukraine Airlines:  is aiming to inaugurate Kiev–Cairo B737-900 services.


AFRAA has highlighted that US$950m of blocked funds is held by Angola, Sudan, Nigeria and Algeria.  Angola heads the list with US$ 480m blocked. 

 Abderahmane Berthe, previously CEO of Air Burkina and of Air Mali, is to be the new Secretary General succeeding Dr. Elijah Chingosho. 

Comoros Government is planning to grant domestic rights to foreign operators.  Air Tanzania has been named as a likely beneficiary.

Côte d’Ivoire Government talks to Ethiopian, SAA and Kenya Airways on the possibility of them operating Abidjan-USA services. Sensible. Why sink a large capital investment and risk when someone else will do it for you and pay a guaranteed percentage fee?  For too long-about 60 years national pride has got in the way of going for these kinds of arrangements. Countries have paid tens of millions to from time to time decorate distant airports with their national identity. At Heathrow Olympic in the 1980s scheduled a 23 hour layover at the end of a 4 hour flight from Athens  so that one of its A300s was always visible from the roadway at the western end of  Heathrow’s Terminal 2. Whether or not anybody other than spotters ever noticed it is unknown

Côte d’Ivoire . Construction has started to double capacity at Abidjan International Airport. The  obvious vision is to become a major West African hub. Currently it faces little opposition in seeking that role but it will take a long time and lot of money to build up the spokes required to create a real hub rather than place where every day there is a good collection of connecting opportunities backed by alternative routings if one should fail. Nobody wants to hang around for 24 hours or more awaiting the next flight (which may be full anyway).

IATA and African Development Bank signed an MOU “to establish a framework for collaboration to boost the aviation sector in Africa”.  IATA signed a similar document with the African Union in July last year. 

Zambia an un-named start-up carrier has ordered 5 SSJ100s.

John Williams
1 Dec 2017

Sunday, 19 November 2017

World Travel Market, London,- In descent?

A fortnight ago the annual World Travel Market was about to kick off at London's vast  and characterless Excel collection of docklands exhibition halls. How does it all look two weeks later?

Some things are constant while others change over time. The constants are the basic heartbeat of the whole show,-the acres occupied by the Gulf states, the massed ranks of USA regional presence, the pretty grim UK area, the girls from wherever parading feathers and , despite the chilly air, little else and the truly awful lunchtime scrum for the local burger stand or the dreary offerings of the 1950/60s style, crammed to the doors, cafetaria downstairs. The scrum getting to and from Excel doesn't vary much either. A bit like a bad mannered version of the great migration but without the charm or excitement. Heaven help the less mobile.Nobody else will.

Change though is apparent as the years go by. Those Gulf spaces are getting less opulent and less busy. Less sightings of the really big names in the industry and hardly any after the first day. The crowds are there but more exhibitors are sitting at empty desks and looking bored. There is a feeling that doing business on the spot now comes second to being seen to be there to be seen and to network.

The Africa area reflects most of these trends. Each year it shrinks and there was a noticeable drop this year. The big players, Kenya and South Africa had taken large stands as always but there was more beige carpet on view .Fewer local tour operators, hotel chains and safari operators were present. Attending the event isn't cheap and now there are spin offs in the form of regional WTMs and other exhibitions  some feel that the pulling power of the big one is diminishing to the point where being there ,if only to keep an eye on local competitors, just isn't worth it. Regular stands are disappearing and as they do WTM's significance diminishes. This year there was no Nigeria, until now always a large and noisy stand populated by the London diaspora and behaving like a Lagos street market.Ghana was providing a pale imitation. Newcomers do pop up though. This year it was Sao Tome and Principe chatting to themselves but with no business in sight in Portugese. For the first time no major African airline was there.The regulars, Kenya Airways, Air Botswana, Air Malawi have packed their bags. In essence the African presence has always been limited to eastern and southern Africa. Nigeria apart, and they never really expected or could cope with a tourism bonanza, where are Ivory Coast, Cameroon, Togo....?  EU and sometimes individual government aid projects sometimes sponsor the presence of developing countries. Maybe that's how Swaziland this year graduated from a table and two chairs against a sidewall to a smart stand.

Most people when asked said "Things are going well". When pressed on whether that meant business was up, not getting worse or whether they were just being brave, the facial expressions varied. A hotelier who's been there for 20 years simply said "Look, I'm still here".

It's all looking a bit dusty though. The era of megashows like WTM feel numbered. It looks like something which has had its time, seen the best of its days and is in danger of sliding further until a critical point is reached. Already it's  down from four to effectively two and a half days. It's losing its glitter and may not be a cash cow for its organisers or a place where the industry does its business for much longer.


Friday, 27 October 2017

Messages from Piccadilly.

The inauguration of the new high tech version of  Piccadilly's iconic electronic advertising site has prompted John Williams to forward a 1953 picture of it displaying an example of one of the best ever pieces of airline advertising.

 Wrapped around the corner were two bold statements. The first was  "BOAC to All  Six Continents"  That's fair. At the time the seventh continent, Antarctica, was seen by most as off the accessible map so didn't count. "We are a/the worldwide airline ius the message. It needs no further hype or explanation. The message is brilliantly understated in a very British way.

The second is the really clever one and stayed with BOAC in various forms until the merger with BEA.  It reads simply "BOAC Takes Good Care of You". In some places the two messages were rolled into one "All over the world BOAC Takes Good Care of You". In the 50s ,60s  and even 70s safety and reliability were much less taken for granted than now. Aircraft were much less dependable and many long haul journeys in particular were interrupted in one way or another. Advertising safety has always been taboo in the airline world but this ad did just that while avoiding the forbidden word. The implications about engineering , flight crew standards and even just being British were obvious. The bundle of messages in this tag line which was probably one of the best known in the world, imprinted themselves on people's minds everywhere. They were of huge value to the airline.

Finally there was the  message that "Whatever happens/goes wrong we will look after you from beginning to end". No ifs no buts. That's not one that many, if any, airline would risk sending out in 2017. Volumes alone simply overwhelm that proposition.

Saturday, 21 October 2017

African Roundup    August - September 2017

Kenya Airways, formerly profitable since privatization, has recorded losses for 5 successive years since 2012.  ‘Project Safari’ seeks to reverse this pattern and to return the business to profitability.  In August a complex financial restructuring was put in place to forestall a fast approaching debt repayment crisis.  Conversion of debt to equity is the key. Government and bank debts approaching US$500m are to be so converted raising Government shareholding to 47% and 11 banks will newly hold 35%. Some 78,000 small private shareholders are losers. They are far from happy.The same goes for some banks.  It is argued that, for all its complexity, the restructuring merely buys time for the airline by ‘kicking the can down the road’ rather than addressing underlying issues in the company, for example, it does not improve cash generation.   New CEO Sebastian Mikosz now has the task of delivering success. He has recently added 5 expatriate managers, who helped him successfully turn round LOT Polish Airlines, to the Transformation Office. This follows the recipe used by Speedwing Consultancy when they put in a group of four high quality ex BA managers who had worked together before. Brian Davies was the CEO in 1996 and with his team set the airline on a ground-breaking path to profitability, privatization and growth.  CEO Mikosz also needs the full support of the Chairman and board to do whatever it takes including hiring and firing without interference. Crucially the Chairman has to be personally and politically strong and remain non executive and to keep all politicians and politics at bay. It’s a formula which could be used for all similar turnarounds but seldom is. It could be the only real winning one. In KQ it started to fall apart as soon as the original Chairman Philip Ndegwa died and his successor, took on a much more interventionist and less supportive tack.

Earlier this year Kenya Airways was seeking anti-trust immunity with joint-venture partner Precision Air of Tanzania.  Kenya Airways is a 41% shareholder. Closer integration of schedules and pricing were the objectives. For the past 4 years, in effect since FastJet started flying domestically within Tanzania, Precision has recorded mounting operating losses.  Precision is now reported to be talking to fellow sufferer, Air Tanzania, on rationalizing operations both domestically and regionally.  It has been a puzzle why such cooperation has been missing for the past 10 years as Air Tanzania has slid to a near moribund state. Kenya Airways’ shareholding in Precision came about in 2003 when it was competing with SAA to acquire 49% of Air Tanzania but it finally announced it would instead be investing in PrecisionAir.  SAA paid US$ 20m for its share-holding, but the partnership was short-lived. The Tanzania Government repurchased the shares for a nominal sum.

Fellow but very different struggler down south, SAA has been given US$220m by the Government enabling it to meet debt repayment obligations to Citibank and to meet ‘immediate operational expenditure’.  The Finance Minister has the power to pay funds ‘which cannot, without serious prejudice to the public interest, be postponed’.   Others would argue that this is another ‘kicking the can down the road’ exercise.  The Minister has committed to an October announcement on the future financial structure of the airline.  In July SAA asked for US$970m, to be spread over 3 years.

But, as ever, there are bright spots.  2 governments have seemingly recognised that it is air services that are important, not the national airline.  The Government of Mozambique, long embarrassed by subsidising loss-making LAM, and having failed to land a strategic investor, has granted domestic rights to those applying.  Both Malawian Airlines and Ethiopian have been so rewarded along with 5 other carriers.   And, the Zimbabwe Government, perhaps weary of Air Zimbabwe’s limited ability to meet the needs of the local tourism industry has announced it is “opening our skies to any airline that wants to fly as many times as possible”.  The details are lacking but it is a notable expression of intent. The breaking down of nationalistic barriers, if it really happens is most welcome. It’s taken more than 70 years of blinded sectors or simply non flown links going back to colonial times. Even within the colonial framework East African for many years East African could not uplift passengers on Central African domestic and inter territorial sectors and vice versa.

Also bright is the Rwandair basing of 2 B737-800s in Cotonouto inaugurate a Benin hub with full traffic rights to regional destinations.  Benin is without a national carrier.

And … services to St Helena are set to start on 14 October.  Airlink, South Africa, will initially provide a weekly service Jo’burg-Windhoek-St Helena with an ETOPS Embraer E190.


Ethiopian Airlines Agreement has been reached with the Nigerian government on a management contract to re-launch and run Arik Air as a national carrier. A formal offer has been submitted.  Contract signing is anticipated in November.

Further south the CEO has confirmed that it is close to signing a deal with the Zambian Government for the creation of a new joint venture national carrier. Operational start up would be early 2018.

 On 16th September the airline launched B787-9, non-stop Sao Paulo services four times weekly thereby cutting Lome,- and with it a West African feed hub from the previous routing, launched in 2013.

 A cargo service is to begin Addis-Los Angles-Mexico in October.

Kenya Airways Shareholder approval was secured at an EGM on 7 August  for a debt-restructuring ‘Optimisation Plan’ which sees 11 local banks convert US$225m of loans into equity with a resultant 35% shareholding.  Three banks are though not yet agreeing to the arrangement . The Government will convert US$243m of loans into equity raising its shareholding to almost 47%. The 1995 Shareholder Agreement with KLM is to be terminated and KLM’s shareholding reduced to near 14% although the carrier will invest a further US$24m capital.  Minority private shareholding, originally a magnet for small investors proud to own part of the (successful) national carrier is to be diluted to just 1%. Government is also to provide guarantees for the US$525m loan from US Exim Bank. 

The US DoT has approved scheduled operations to the USA and talks of launching in April 2018, perhaps, initially, using SkyTeam partner Delta’s aircraft.  KQ is chronically short of widebodies with no more on order and two 787s leased to Oman Air leaving them with just six active 787s. The 772s and the over-large 773s have variously been sold or put out on long term leases .Ethiopian, SAA and Egyptair are the only 3 other African carriers approved for US operations. More 787s are needed to avoid a static state and avoid the network branches withering. This applies to both long haul and regional routes. Cargo alone cries out for widebodies to provide the capacity to ensure that “via Nairobi” is a competitive or even viable routing for freight. There have been periods in the past where far from being Africa’s smoothest running hub it has been the continent’s biggest bottleneck with backlogs in every direction. The landlocked countries can’t afford to live with that sort of offering and these days many cities have direct flights to the Gulf hubs so Nairobi no longer enjoys its former hold on the market. 

The new CEO, Sebastian Mikosz, ex-CEO of LOT Polish Airlines, furthered the route rationalization programme ,- a sort of reverse network development plan,- with the dropping of Hanoi and Hong Kong at the end of October. 

Precision Air (Tanzania) is considering pursuing a cooperation agreement with Air Tanzania on pricing and networks to expand coverage within Tanzania and beyond. Kenya Airways is a 42% shareholder.
 On 1st October the airline launched scheduled services into Serengeti National Park.  The Dar es Salaam - Seronera – Zanzibar  route linking the safari and beach holiday destinations is being flown daily with ATR 42s.
Rwandair is planning Kigali – New York JFK, A330 services starting in September next year.  Nice idea but hugely expensive in capital and operational costs.
Closer to home, and perhaps a better bet, 2 B737-800s are being based in Cotonou as Rwanda and Benin establish a new joint venture carrier to serve the region. Rwandair will enjoy full 7th Freedom rights to/from Benin. On 30 September  6 routes were opened from Cotonou to Libreville, Brazzaville, Abidjan, Conakry, Bamako and Dakar, all planned to connect with the Kigali hub.


Air Botswana one of the 2 stored BAe146-100s, originally acquired in 1989, has been ferried to the Philippines. It’s unclear why.

Air Namibia talks of adding 2 Emb135s and 4 Emb 145s to the fleet.  The SSJ-100 is also under evaluation.  Current fleet is: 2 A330, 4 A319 and Emb135. 
Air Namibia plans a March 2018 return to Accra with a four times weekly Windhoek-Lagos-Accra A319 routing complete with 5th freedom Nigeria-Ghana rights.
Air Zimbabwe : Funding problems are surfacing for the wet-leasing of the 4 Malaysian Airlines B777-200s announced in June.

Fastjet PLC (South Africa) Is considering using small turbo-props on expanded SA, Tanzania and Zimbabwe domestic networks.  It also continues evaluating operating into 3 unnamed neighbouring countries and a 14th November launch of twice weekly Harare-Lusaka is planned . With Emirates flying a 777 daily and other competitors on the route that isn’t going to take anybody’s breath away. It isn’t quite like the original vision of high frequency links all over Africa. Can it rediscover its original zest or is the growing pile of past losses going to constrain it?

Meanwhile a leased Emb145 is covering services in Tanzania pending the arrival of the planned 2 dry-leased Emb190s.

Talking of cash, the airline is seeking US$44m additional funding after reporting US$ 13.2m operating loss Jan-Jun 2017.  The company forecasts cash-flow breakeven before year-end.

FlySafair (S Africa) LCC added 2 additional B737-400s in September.  Total fleet is now 7 B737-400s and 3 -800s.  Johannesburg -based, it flies a domestic network, mirroring SAA and Comair/BA/Kulula linking Cape Town, Durban, George, Port Elizabeth and East London.
Mahogany Air (Zambia) has been granted an AOC following a US$23m re-captalization fund from Zambian and Dubai investors.  Operations resumed following a 3 year gap in July this year with a single leased Emb-120 flying domestic routes. 
Malawian Airlines along with 49% shareholder Ethiopian Airlines has been granted rights to operate domestic routes by the Mozambique Government.

Ontime Airlines.bw (Botswana) Putative LCC startup. Seeking US$25m funding to purchase 4 ATR72-600s to operate domestic and regional opserations. An Air Service Licence and AOC being sought. 
SAA has appointed Vuyani Jarana as its new CEO. An aviation outsider, he joins from Vodacom Business. Start date is 1 November.
SAA whilst highlighting the continuing problem of poor governance in SAA, the Minister of Finance says a new Chairman will be appointed in November. The search continues for an acceptable method of financing the 3yr US$970m injection requested in July. USD140m repayments are due at the end of September.  Returning the business to financial stability is the government’s principle aim.
The airline is planning a 20% cut in the flying programme in an attempt to further reduce costs.  Starting in October some domestic services are to go including Johannesburg-Cape Town and Durban. We wonder if those will happen as the volumes are high even if yields are constrained by compettion from its own Mango, Comair’s Kulula, Comair/BA and Fly Safair. Loss-making regional routes to Brazzaville, Douala, Kinshasa, Entebbe, Luanda, and Cotonou are to have frequency reductions.  The fleet is to be reduced by almost 20%.  Five narrow-bodies will be retired by end-2017 and 5 wide-bodies will by October 2018.
 A US$220m bail-out from Government to meet USD132m loan repayments is due at the end of September and US$88m to meet immediate operating expenditure. Finance Minister, Gigaba, is to announce plans on SAA finance restructuring in October. And so it goes on..............
Airlink (S Africa) was selected by the St Helena Government to fly scheduled services to the island. Starting in October weekly flights will be operated from both Johannesburg and possibly Cape Town plus from November, an extension to Ascension Island every 2 weeks, using an ETOPS Emb-190. Re-fuelling stops in Windhoek will be required in both directions.  On 22 August  a proving flight was successfully completed. Windshear problems on runway20 resulted in Comair, the choice from the first RFP, from mounting operations with the larger B737-800s.  Airlink is happier with using the shorter and less windshere -prone reciprocal runway 02 for the Emb 190s..
 The airline is also considering  launching a Johannesburg – Brazzaville link plus others in Central/West Africa as SAA embarks on reducing its regional and domestic flying programme.  (Sep 2017)
Swazi Airways (Swaziland) having never having secured an AOC, is closing without operating. 


Air Senegal has taken delivery of the first of 2 ATR72-600 ordered in June.  Launch of the new carrier is planned for December.

Azman Air (Nigeria) Kano-based domestic carrier has added a 5th aircraft to the fleet, an A330-200, with plans to fly to China.

Camair-Co is to resume some regional operations following receipt of a US$53m Government subsidy.

First Nation Airways (Nigeria) has had its AOC downgraded to non-scheduled flights only. The NCAA specifies a minimum fleet size of 2 aircraft but the single A320 has been operating under a temporary NCAA dispensation.   

Goldstar Airlines (Ghana) Privately-owned start-up was awarded an Air Carrier Certificate covering 11 international routes in December last year but continues to await granting of an AOC. Original start-up was to be June 2014.  It now plans to start flying with 5 wet-leased Boeing 737s.

TACV (Cabo Verde) has selected experienced hubber Loftleider Icelandic as strategic partner to develop Cabo Verde as a hub linking Africa, Europe and the Americas. That’s ambitious. Having ended all domestic flying in favour of BinterCV the 5 September date for resumption of international services has been delayed as the single B757-200 undergoes maintenance.


Royal Air Maroc (Morocco) has added N’Djamena to Casablanca-Nairobi services and split Rio and Sao Paulo into separate services.

Syphax (Tunisia) failed to have its Operating Licence renewed thereby jeopardising the plans to resume flying before the end of this year. Operations ceased on Jul 2015 with the carrier then being placed in ’judicial administration’. 


Air France is to launch A320/319 Montpelier – Algiers services in October.

Air Mediterranean (Greece) is planning to fly from Athens to Casablanca and Khartoum amongst others initially with a fleet of 3 B737-400s.

Atlantic Star Airlines (UK) has switched its focus from launching St Helena flights to serving Ascension Island. 

British Airways after a 10 year gap will return to Seychelles in March 2018, with a twice weekly , initially seasonal, nonstop B787-9.  It originally withdrew from the islands because of the non remitability of revenue earned there. Unless that issue has been resolved expect it to strictly limit local sales and rely instead on the upmarket UK originating tours business. 

The airline was , in July 1971, the first to fly "proper" services into the then newly opened airport. It financed the building of the first two major hotels on Mahe so that it could accomodate its crews and incoming tourists and for many years provided the management and supervision of the Government owned monopoly ground handler. Apart from the terminating services from London in 1973 it also started a twice weekly service from Tokyo, Hong Kong and Columbo, one continuing to Johannesburg and the other to Nairobi and thence also to London. Of these the Nairobi flight was soon switched to be a second Johannesburg and by the late 70s the Super VC10s had been replaced by 747s. The revived venture will be a pale shadow of all that.

Cargolux (Luxembourg) aimed at a September launch of Frankfurt-Lubumbashi flights adding Douala in October. Routings include variously Johannesburg, Douala and Bamako.

Emirates is returning to Abuja, routing via Kano in November.

Maldivian (Maldives) is planning a weekly Male to Johannesburg service. 

Qatar Airways to add Salalah (Oman) to its Doha - Zanzibar - Dar-es Salaam route in October.

Ukraine Intl Airlines is aiming at the launch of Kiev–Cairo B737-900 in April 2018.


Burundi  Government is coinsidering merging moribund Air Burundi with profitable ground handling firm SOBUGEA.  Air Burundi owns a single Chinese MA-60 but, after 4 years, has yet to fly it on scheduled services. 

Ghana carriers attribute a 23% increase in domestic traffic to the removal last year of the 17.5% VAT previously levied on air fares. 

Ghana Government has signed an MOU with Air Mauritius over the provision of expertise in the establishment of a new Ghanaian national carrier. They have long grieved over the demise under heavy accumulated and ongoing losses of Ghana Airways, the once proud operator of Britannias, then VC10s and finally DC10s. At one time it was the less proud operator of 8 Il-18s.

Senegal expects to inaugurate Dakar’s new airport, Blaise Diagne International, in early December. 

Zimbabwe -, ‘Robert Mugabe International Airport’ is to become the new name for Harare’s airport on November 17th.  Well, there probably wasn’t a lot of choice in the vote for it.

John Williams
1 October 2017

Sunday, 23 April 2017

African  Roundup     February - March 2017

Here we go again. It’s Nigeria, one of Africa’s biggest economies, full of talented business people and deal makers, and a place, Lagos, which should be the aviation Dubai of Africa. The departure boards should be showing multiple flights to destinations all over the continent. The ramp should be home to rank upon rank of tails belonging to dominant home based airline and see the comings and goings of a myriad of foreign operators. But it’s not like that and never has been. Never mind the Gulf fraternity, where is even the western Africa equivalent of Ethiopian or Kenya Airways in its hopefully only suspended heyday a few years back?  Every now and then a Nigerian airline pokes its nose above the lower clouds and looks as if it could move into the long term big time. From right back in the late 1950s various incarnations of Nigeria Airways came and went. Early on BA was involved in various forms, and others came and went. More recently Virgin Nigeria thought it could make a go of it but never really got the hang of how to get truly embedded and do business in the country with its layer upon layer of vested interests and politics. Then there was Arik whose smart livery appeared on the London and other longer haul routes. Could this be the one?

Not so say the financial people and in February the airline, Nigeria’s largest, was placed into receivership by the Government. AMCON (Asset Management Corp, Nigeria) sacked the Board and put new management into place taking over the day-to-day. KPMG is to conduct a forensic audit. Cash shortages are at a critical level.  It appears that staff haven’t been paid, nor suppliers nor leases. “threatening not only the future of the company but that of Nigerian aviation”.  How big is the problem? Sums of several multiples of US$100million are variously reported. AMCON cites “poor corporate governance” as the cause. What’s that in bald terms? Debt recovery will be pursued from Arik’s assets.  Amongst the immediate changes the nominal fleet of 23 aircraft has been reduced to an operational 10 with  the flagship Johannesburg and London services immediately halted.  Another Nigerian operator Aero Contractors which was at one time the domestic airline of choice by those wishing to travel reasonably to time is also controlled by AMCON. In March AMCON set in motion a 900 staff reduction exercise deeming the current 1,500 to be “bloated” in support of the single operational B737-400. That must go down as 2017’s understatement of the year so far.

Meanwhile to the south Air Botswana, which should always have been a modest success story and with at times some bright ideas also continues its search for a bright new dawn. The Botswana Government is again seeking to ‘privatise’ the airline.  As 100% shareholder Government has sought several times in the past 15 years to ease its financial burden in maintaining the small loss-making national carrier but at the same time it’s very reluctant to grasp essential nettles. Talk about reducing staff to a minimum and eyes glaze over. All sorts of things get in the way of sorting out what should be a simple schedule flown by a lean fleet and with as few staff as possible regardless of who they are related to. So what’s happening this time?  The approach is new. Expressions of Interest are again sought but this time via a  “Tell us how you would like to be involved and what you would do ” approach.  Nothing is prescribed but Government clearly wants to see cash injected, but not at the expense of losing overall control.

Before the deadline Comair declared an interest citing mutual benefits in merging operations and processes but not necessarily putting in cash.  Comair is very focused on cash and isn’t up for losing any. SA Airlink made an almost identical approach in 2008 but Government eventually rejected the draft agreement.  Amongst other unpalatables would have been the subsuming of Air Botswana reservations and revenue accounting into SAA systems in Johannesburg. This was deemed unacceptable, as was the side effect of staff reductions. The idea of the Airlink based endorsed brand style of livery crossed a line too.  National pride, identity and ownership of assets invariably loom large in such negotiations, particularly so for small countries. By the 27 February deadline 17 responses were logged with the early stages of evaluation now underway. What these might be is anybody’s guess but the same show stoppers almost certainly remain. Meanwhile the replacement of the ageing but robust and serviceable 4 strong, ATR42/72 fleet has been put on hold.

Back up the continent and over to the east, February saw Nairobi’s JKIA airport achieve US FAA Category 1 status. The Kenya CAA has been deemed compliant with the necessary ICAO safety standards and recommended practices.  This long-sought goal now makes possible Kenya Airways operations to the USA plus, naturally, the same opportunity for US carriers. Kenya Airways has yet to mention opening a route as it continues the search for a new CEO, new Flight Ops Director and a new Marketing Director. It would need a few more 787s too.  In 2009 Delta was within hours of launching a Nairobi operation only for the inaugural flight suddenly to be cancelled.  The airside mixing of both departing and arriving passengers was then, and for many years, the underlying security risk. The new Kenya Airways dominated terminal unit at JKIA has removed this weakness. Kenya joins South Africa, Ethiopia, Cape Verde and Nigeria all with Category 1 status, plus, further north, Morocco and Egypt.   Delta is the only US operator to Africa currently reaching just Johannesburg.  United withdrew from the continent when it dropped Houston-Lagos services last June last year. If you are puzzled by Cape Verde; the country’s large diaspora is centred in Boston to which TACV Cabo Verde Airlines flies direct from Praia.

With all this going on it’s a shame when a high quality investor calls it a day, particularly when it is one which has been a friendly power for good across the continent. That’s what has happened though with the news that AKFED (Aga Khan Fund for Economic Development) is to relinquish its majority shareholding in Air Burkina thereby ending its linkage with African airlines.  Not so long it had aspirations to have a string of airlines across Africa and a start was made with with an original group of 3 carriers, under the Meridiana of Italy banner. These included Air Mali and Air Uganda. In 2016 Qatar Airways bought 49% of AKFED’s Meridiana shareholding, leaving AKFED with just the two African entities. It was probably a case now of double or quit. Quit won. The dream of a thriving, thrusting, rapidly expanding pan African airline or grouping will have to await another day. Is it an impossible dream? Ask FastJet for an update.

AB Aviation (Comoros) has reached agreement with CAA on payment of outstanding debts. Operations , suspended in January, will now resume. 

Ethiopian Airlines. There’s no pausing for breath here. 2025 growth targets include increasing the fleet by 50% to 140 aircraft and annual revenue from US$2.4bn to US$10bn.  Cash frozen in Nigeria and other regional countries is quoted as US$220m.

 Unlike many carriers the Ethiopins hung on in the Abuja market when the runway was closed for three months major repair on 8th March by flying a daily B787-8 to Kaduna.

Despite its long standing interest in supporting potential feeder carriers across Africa, Ethiopian has declined an offer from AMCON Nigeria to manage Arik Air. That won’t encourage other possible sources of support. AMCON now has control of the business.

A new route development not involving its home base, Addis Ababa was the  28 March launch of thrice weekly Johannesburg – Lome with a B737-800 linking into, 26%-owned, ASky’s West African regional network. In the same few days Antananarivo, Victoria Falls and Oslo were also added to the network.

Fastjet PLC  has appointed new Non-Executive Chairman Wally Rashid.  He steps down from the same position with Mango, the SAA low-cost subsidiary, on 1 April.  New CFO Michael Muller is also ex-SAA.  CEO Nico Bezuidenhout re-iterates that the aim continues “to become the first truly pan-African low-cost airline”, with break-even forecast for 4Q this year. That’s quite soon. Then starts the process of recovering the losses racked up to date.  

Jambojet (Kenya Airways LCC subsidiary) is seeking licences from KCAA to operate to 8 neighbouring countries including Tanzania, Uganda and Rwanda. That would get in the way of FastJet. 

Kenya Airways CEO, Mbuvi Ngunze, is to vacate his position by the end of March although he will remain until a replacement is found. That process didn’t appear to be going well, probably not helped by “KQ” not being seen as an expat-friendly environment. Marketing Director Chris Diaz has resigned and is also to leave in March.
 The Kenyan carrier is seeking anti-trust immunity with joint-venture partner Precision Air of Tanzania in which it is a  41% shareholder.  Closer integration of schedules and pricing is the objective.
Precision Air (Tanzania).From July the airline is planning to resume a useful link, bypassing Nairobi ) July with our direct flights between Dar and Entebbe. The route was dropped in 2013. This sector, flying over the Rift Valley the Ngorongoro Crater area and the Serengeti offers some of Africa’s most stunning scenery and outstanding long distance views. An opportunity for passengers to pull up their window blinds, remove their ear phones and switch off their fascinating 200th viewing of “Friends”. A difficult choice for many.
Rwandair added Lagos to its Accra flights, using 5th Freedom rights on 23 March. Next to come is the launch of thrice weekly non-stop A330 Kigali-Mumbai services thereby offering another Nairobi-bypass option to customers in the region. Regulatory delays have pushed back the launch of London A330-200 operations until the end of May.


Air Botswana has challenged the local CAAB’s friendly fire calculation of being owed landing and passenger service charges totalling US$500k. 

Air Zimbabwe is aiming at readmission to IATA in May after having been suspended in 2012 as a result of US$4m Clearing House default.
It is also trying to start a programme to reduce staff numbers, despite the Labour Court simultaneously ordering  the re-instatement of 300 staff ‘fired’ in 2015.
As a way of freeing the long haul flying operation from the drag of historic debt there is talk of forming a new company equipped with 4 B777s or B787s. The source of its funding and other details are unclear, but the usual suspect, China s a possibility.
EC Air (Congo Brazzaville) is contesting the findings of a Government report that management were to blame for its collapse last October.

Fly Blue Crane (S Africa) aimed to present a new business plan to regulators in March. It entered Business Rescue last November.That’s similar to US Chapter 11 protection from creditors. Flying started in Sep 2015 with a single ERJ145 on a domestic network serving Johannesburg, Cape Town, Kimberley and Bloemfontein. Talks continue with potential investors. CEO Siza Mzimela is an ex-SAA CEO.

Proflight (Zambia) has achieved IOSA certification.

SAA A High Court judgement found the carrier guilty of ‘anti-competitive practice’ and awarded USD124 million to Comair.  Travel agents incentive schemes dating back to 1999-2005 were involved. It isn’t known whether the cheque has arrived.


Aero Contractors (Nigeria) 60% state shareholder Asset Management Corp (AMCON) dismissed 900 staff from a total workforce of 1500 due to ‘unsustainable bloated staff costs’. Operational fleet is a single B737-400 and operations resumed in Dec 2016 following a 4 month cash shortage induced suspension.

Africa World Airlines (Ghana) has taken delivery of its 5th ERJ145.  It is predominantly a domestic carrier with a single regional route, Accra-Lagos.  Operations started in September 2012.  Hainan Airlines (China) is the controlling shareholder in a joint venture with Ghanaian institutional investors.

Air Peace (Nigeria) planned to launch Lagos-Accra services in February.  It has ‘licences’ to operate to 5 international points including China, USA and UAE. 
Arik Air Under its new government appointed management the operating fleet is reduced to 10, the money-gobbling New York and London routes are suspended, and KPMG has started a forensic audit. In the short term Amcon is seeking US$31.7m to address ‘deep-seated rot’ within the company.,- ie to keep it flying.
ASKY (Togo) is expanding and aims to add a further 2x B737-800 this year raising the B737 fleet to 6.  The current aircraft are leased from 26% shareholder Ethiopian Airlines whose central African investment, Malawi Airlines has yet to show the same sort of growth.

First Nation Airways (Nigeria) has suspended operations for the second time due to aircraft maintenance and flight crew recurrent training.  The NCAA specifies a minimum fleet of 2 aircraft but the single A320 has been operating under a temporary dispensation.


Air Arabia Maroc launched its Casablanca – Catania route in mid March.

Royal Air Maroc in March plans to start operating and using of 5th freedom rights between Accra  and  Monrovia with a B737-700 to be based in Accra. Kenya Airways and Rwandair also use similar Ghana 5th freedoms. All of these add useful city pairs and frequencies to the region’s patchy network. 5th freedoms are though more vulnerable to changes of policy or fortunes  by their operators. If both points grow to justify direct services to the hime base then they will be swiftly abandoned.
March also saw the launch of routes from Casablanca to Bilbao, Naples and Manchester. Manchesters’ range of international destinations grows apace. Another example of  hub ,- in this case Heathrow,- busting.  Everybody’s at it. Get behind someone elses’ hub and you can attack their business. 

Air India is talking of re-opening its Nairobi and Dar routes.

Atlantic Star Airlines (UK) A B757 test flight to St Helena planned for 6Mar has been postponed for “some months” due to aircraft availability.  Meanwhile, unresolved windshear problems on the single runway mean that there have only been a handful of exec jet type operations.  To compound the island’s problems the reinstated ship has been non operational due to mechanical problems.  Presumably the UK Government experts who came up with the idea of replacing the ship with a windswept airport, over 1,000 miles from any other land and  served by aircraft with limited cargo capacity received their bonuses and promotions some time ago. Maybe they are on an honours board somewhere next to those who cooked up the Tanganyika Groundnut scheme circa 1948. They just chose a spot famous for its lack of consistent rain. The annual average was fine but it just tended to all fall at once,- about every five years. 

British Airways, which has oer some years dropped most of its lower density African routes.-including Harare, Lusaka,Lilongwe, Entebbe, Dar,- has been talking of possible new sub-Saharan routes with long-range narrow-body A321s. Parent company, IAG, has outstanding orders for 170 aircraft including 17 A321s, 89 A320s , 45 A350s, for delivery 2017-21. BA’s final long haul narrow body African service was flown in the mid 1980s with the airline’s last B 707 on the London-Amman-Dar- Lilongwe route. At the time it was thought to be game over for narrow bodies other than for short and medium hauls.


Kenya Nairobi’s airport, JKIA, has been awarded US FAA Cat1 status enabling direct operations to the USA.  The Kenya CAA has been deemed compliant with the necessary ICAO safety standards and recommended practices subject to the Kenya Government passing the Civil Aviation Amendment Bill now before its Parliament.

KLM Continues to advance in Africa with the planned return to Freetown and Monrovia after nearly 20 years, with three A330-200s a week. A new Windhoek route is also to start.

Malagasy Republic’s Government has named Ethiopian Airlines and Air Austral (Reunion) as the final contenders for a 49% stake in Air Madagascar. A decision is expected soon.

Zimbabwe’s Government is talking to China’s Exim Bank for loans to upgrade Harare Airport. Most national projects are now added to the Chinese loan slate pending the day when government discovers that loans are not grants.

John Williams
 April 2017