African Update -October/November 2011

As always lots of activity during the past two months ……..

Newly appointed DG of IATA, Tony Tyler, speaking at the AFRAA AGM, outlined his view of IATA’s role in Africa …. “Aviation is a challenging industry, so let’s work together … to meet the challenges of growth and make aviation even more successful. My focus is on IATA delivering value and innovation and being responsive to the needs of the membership”, ie, a pragmatic shift away from the practice of stripping carriers of membership for non-compliance of directives, eg, IOSA and e-ticketing.

The non-African airline presence on the continent continues to expand. Emirates announced the addition of Harare and Lusaka to the network; Gulf Air adds Entebbe in the next few weeks to be followed by Juba; Qatar has announced imminent operations to Kigali, Zanzibar and Mombasa, and United’s presence has grown with the addition of Houston-Lagos.

Increased capacity by non-African airlines has forced Air Seychelles to abandon long-haul operations and to restructure as a regional carrier. Similar loss of market share leading to worsening operating losses faces other carriers.

Diplomatic spats have soured the air in some countries: Senegal has closed its airspace to Guinea bound flights but has healed a rift with Mauritania. Nigeria and UK are tussling over Heathrow slots and frequencies for Arik and BA. Nigeria fines BA (USD135mn) and Virgin (USD100m) over alleged price discrimination against Nigerians.

The long arm of the law has touched some senior managers at Arik over alleged tax evasion and a previous CEO of Air Tanzania has been charged with abuse of office during his tenure. Parliament has sacked the Board of Royal Swazi for sitting 96 times in a year whereas the Act specifies just 4.

….. and Air Zimbabawe is reported as now being in discussion with Hainan Airlines on a possible takeover. In parallel management spent the night in their offices having been held hostage by staff demanding settlement of USD5.6mn unpaid salaries.


1. EAST AFRICA

Air Tanzania GoTz pays SATechnic USD3mn maintenance and other bills to release the Dash8, their sole a/c. Ops to restart mid-Nov 2011. (Oct 2011)

Air Tanzania to acquire lease-purchase CRJ200 in Jan 2012. 5 year plan envisages CRJ700 and CRJ900 by end of 2013, followed by B737-800 and eventually B787 (nov11)

Air Tanzania talking to Export Dev Canada for help in raising USD500m for 8 additional aircraft, presumably Bombardiers. Embraer possibly offering E170/190 alternatives. (Nov11)

Air Tanzania former CEO David Mattaka charged in court with abuse of office over 2007 purchase of 26 vehicles. CFO,Ikomba, and Internal Auditor, Hajji, also charged. (nov 11)

Air Uganda new CEO, Kyle Haywood, announces plans for fleet growth in 2012-3 to expand regional and domestic ops to feed the growing number of EBB foreign long-haul ops. (nov11)
Ethiopian Airlines to launch ops ADD-BAH and KWI with Toronto also planned (Oct 11)
Kenya Airways contracts with GECAS for two B777-300ERs on 12-year leases (Oct11)

Kenya Airways takes delivery of its ninth E-Jet from Embraer, an E190. (Oct11)

Kenya Airways targets 107 aircraft fleet by 2020 and the CEO openly talks of hiring expat flight crew to meet the growth, a traditionally toxic topic with local unions. (Oct 11)

Kenya Airways eff 24Oct, USDollar pricing/payment introduced for domestic flights due to Kenya Shilling volatility (Oct11)

Kenya Airways rights issue due ‘in next 6 months’ to finance fleet/network expansion (Nov11)

Precision Air IPO overvalues the shares say analysts. 2010 profit 2% of rev and falling. (Oct11)

Precison Air planning new routes to Lillongwe, Luanda, Lusaka and Lubumbashi. (Oct 11)

Precision Air IPO closing date extended to 15 Dec 2011. Share take-up reportedly slow (nov11)

RwandAir takes delivery of second new B738. The 2 leased 735s are to remain for 2 years. 2x CRJ200 and 1x Dash8 also in fleet. Further 6 aircraft planned (Nov11)
Rwandair to launch service from Kigali to Lagos on 03 December 2011 with B738 (Nov11).
Southern Star (South Sudan) ceases ops 2 months after start-up. Reasons unclear. Single leased Dash8 returned to ALS Nairobi. (Nov11)
Tropical Air (Zanzibar) takes delivery of leased ATR42. Established charter operator. Started scheduled services in 2011 with Grand Caravan; DAR/ZNZ Pemba and Mafia. (Oct11)

2. SOUTH / CENTRAL AFRICA

Air Malawi suspends all ops due total fleet of 3 a/c grounded for maintenance/unpaid bills plus end of B732 wet-lease. New 737 lease plus return of ATR42 anticipated mid-Dec 2011 (nov11)

Air Seychelles to withdraw from ‘seriously loss-making’ long-haul ops by Mar 2012 and become regional carrier. 3x leased 767s to be returned. New B738 being considered. (Nov11)
Air Zimbabwe continuing efforts to acquire two A340-500s from Airbus despite EU sanctions. Funds from Chinese Sonangol (Angola). Ownership fuzziness delaying a/c registrations (Oct 11).
Air Zimbabwe again suspends international ops over JetA1 shortage due unpaid bills. (Nov11)
Air Zimbabwe staff hold managers hostage overnight over USD5.6m salary arrears (nov11)
Air Zimbabwe reportedly in talks with Hainan Airlines re takeover or investment (Nov11)
Fly 540 Dem Rep Congo is planned to add to Fly540s Kenya, Angola and Ghana.(Oct2011)
LAM ceased MPM-LIS ops pending strategy review. Plans to launch autonomous LAM Internacionale, long-haul co, with own fleet and crew. Will need to overturn EU ban. (Nov 11)
SAA drops DUR-CPT ops to codeshare with LCC subsidiary Mango. Ditto Lanseria - CPT (Oct 11)
SAA eff Jan 2012 to launch 2pw A319 ops to Pointe Noire and 3pw A346 to Beijing (Nov11)
SA Express DRC Congo Express jv failed and now closed. DRC partner revealed by audit to be without capital. Write off USD4.8m. SAX ops JNB-Lubumbashi continue (Nov11)
Santaco Airlines (SA) LCC ‘proof of concept launch’, 16 Sep 2011. Project of SA Taxi Assoc. Target ‘the black community’. End 2011 op launch. Lanseria – Bhisho and CPT. (Oct 11)

Zambezi Airlines AOC revoked due to ‘safety concerns’. Airline challenges decision in courts. Re-instatement apparently agreed. Ops to restart 11 Nov. New Govt has announced pending creation of new national airline. Zambesi USD20mn outstanding debts reported. (Oct11)

3. WEST AFRICA

Arik Air plans LOS-AUH ops with A340-500 eff Nov 2011. First WAf carrier into AUH (Oct 2011)
Arik Air announces firm order for 2x B747-8I with GEnx engines. (Oct 2011)
Arik Air to launch ops Abuja - London Heathrow on 30 October 2011. (Oct 11)
Arik Air suspended from BSP by IATA. Arik joined BSP in Feb2011 (Oct11).
Arik Air president Arumemei-Ikhide plus CFO and 2 others arrested for alleged tax evasion and related offenses. USD22mn tax owing. USD7mn also owed to Nig Airspace Mgmnt Agcy (Oct 11)
Camair-Co reduces Paris ops from 6 to 4pw. To add 3pw Lyons ops with 737-700. (Nov11)

First Nation Airways (Nigeria) , start-up, out of Bellview, ops wef 2Nov ABJ-LOS-PHC with leased A320 ex Gulf Air. AOC granted 31 Oct 2011. (Nov 11)
Fly 540 Ghana receives its first aircraft, ATR72-500. Ghana AOC awaited but expected to start by end of 2011, says parent Lonhro (Oct11)
Gabon Airlines ceased ops Mar 2011. President announces new airline to fly in 2012 (Oct11)

Ghana International Airlines GIA collapse is ‘an albatross round Govt’s neck’, says President of Ghana as court cases continue. ‘Replacement is not a priority’. (Oct 2011)

Kabo Air (Nigeria) applies to US regulators for foreign air carrier permit with plans to operate B767-300 Lagos to Atlanta, Fort Lauderdale, and Houston (Nov11)

Sika Airlines (Ghana) plans 2012 startup with leased 777. ACC – LHR and JFK (Nov11)

Starbow Airlines (Ghana) Domestic ops started Sep 2011. Regional ops to follow.
Leased 2x BAe 146-300. Six aircraft planned. CEO Bock Frieson ex Air Malta. (Oct 11)

STP Airways (Sao Tome) relaunches ops between Sao Tome and Principe with DO228. Also ops 1pw 737-800 Sao Tome – Lisbon. 35% Govt owned. (Oct11)


4. NORTH AFRICA

Royal Air Maroc to op Casablanca - Bissau via Conakry eff Dec 2011 (Oct 11)

Several carriers have now restarted services into Tripoli.


5. NON-AFRICAN AIRLINES

Emirates to launch 5pw A330 ops Dubai – Lusaka – Harare eff Feb 2012 (Oct 11)

Emirates SkyCargo launched weekly 744F DXB-Lome-ACC-FRA-DXB service (Nov11)

KLM will launch 2pw 777-200 ops to Luanda eff Nov 2011 (Oct 11)

Qatar Airways to launch ops to Kigali, Zanzibar and Mombasa in early 2012 (Nov11)

Royal Jordanian to op A330 AMM-LOS eff Nov 2011. ACC, NBO, ADD, A320 in 2012 (Oct11)

Swiss to drop Cameroon ops eff Mar12. Fellow LH Group SNBrussels to up to 7pw (Nov11)

THY Turkish ups IST-ACC-LOS to 7pw and introduces B737-900ER, eff Dec 2011 (Nov11)

United Airlines launches daily Houston – Lagos. Operated by Continental. (Nov11)

Yes Airways (Poland) launched service from Warsaw to Mombasa on 09 October 2011 with A320. Carrier is operated by IKATA, Poland’s largest tour operator. (Oct11)


6. MISCELLANEOUS

Addis Ababa Airport expansion to be completed Dec 2011. Aircraft parking up from 19 to 44 incl 747/777. Runway upgrading plus new taxiways. Chinese contractors. (Oct 11)

Airbus predicts sub-Sahara Africa need for 528 new passenger aircraft by 2030, value USD65bn. 350 single aisle, 157 twin aisle, 21 very large. Assumes annual 5.7% pax vol growth. (Oct 11)

US FAA issues AD to increase fuselage crack checks on B733/734/735 with 40K+ cycles (Nov11)


IATA fresh approach to Africa, said by new DG Tony Tyler at AAFRA AGM ……….
“Aviation is a challenging industry, so let’s work together, where we can, to meet the challenges of growth and make aviation even more successful. My focus on running IATA is on delivering value and innovation and being responsive to the needs of the membership”. (Nov11)

India Govt keen to secure S Atlantic fifths beyond Africa in exchange for fifths beyond India for African carriers (Oct 11)

Nairobi JKIA USD500mn new terminal and ramp expansion, ground breaking scheduled for Jan 2012 for operational completion 2014. (Oct 11)

Nigeria Lagos MMA Airport new terminal under construction. Part of GoN USD120mn national airports upgrade plan. (Nov 11)

Nigeria Fed Airports Authy removes MD Mr Aisuebeogun, & Nigerian Airspace Management Agcy MD Mr Auyo. Replacements, Mr Uriesa and Mr Udoh respectively (Oct11)

Nigeria reduces BA LOS freqs to 3pw eff 31 Dec as Arik claims BASA breach in allocation of their LHR slots. Arik previously leased slots from BMI, now being sold by DLH. (Nov11).

Nigeria CAA fines BA USD135m and Virgin USD100m for alleged price fixing. Ban from Nigerian airspace possible for non-compliance. Both carriers objecting. (Nov11)

Senegal and Mauritania resolve 5th freedom spat – ‘misunderstanding’ DKR-NOU ops resumed after 3 month gap (Oct 11)

Senegal / Belgium new BASA signed but Brussels Airlines fifths beyond DKR, suddenly withdrawn on creation of new Senegal Airlines in Jan 2011, not reinstated. (Oct 11)

Senegal bans flights to/from Guinea air space following Guinea grounding an Air Senegal aircraft due unpaid bills. Guinea president says Senegal complicit in failed assassination attack. (Nov11)

South Sudan (Republic of) has become ICAO’s 191st Member State, (Nov11)

Swaziland construction of new Sikhuphe Intl Airport stalled due cost overruns. 2011 opening date postponed. Construction began 2003 east of Manzini. Part funded by Taiwan. (Nov11)

John Williams
1 December 2011