To begin, not a look back but a vision of the future. In just a few days Ethiopian Airlines will take delivery of its first B787 Dreamliner. The original delivery date has long since been passed and the wait must have seemed eternal. But Ethiopian and the continent as a whole is poised to join the technological elite. Ethiopian’s order is for 10 B787s. This first aircraft , after initial ad hoc showcasing substitutions on services to Entebbe, Kilimanjaro,Dubai will operate the Addis Ababa - Johannesburg and Dubai routes. Meanwhile Kenya Airways B787 frustrations have been compounded. Boeing is now talking of yet further delay to early 2014 for delivery of the first of 9 on order.
The fleet problems faced by the two carriers during the much delayed 787 deliveries have been taxing. 767s have had to be kept in the fleet long beyond their planned retirement dates and additional 777s have been ordered to mop up volume growth on key routes. None of which has been cheap and both carriers have successfully pushed hard for compensation from Boeing.
South African Airways is clearly under increasing stress. Back in May it asked Government (its sole shareholder) for USD745million to enable fleet renewal and business restructuring. Although it argued that this was not a bail out it was unconvincing. Now it has announced the imminent withdrawal of its Cape Town – London services. A near 25% fall in total UK-South Africa demand over the past 3 years will have been a significant factor but not the full story. SAA’s base, Johannesburg is geographically poorly placed in a cul-de-sac at the bottom end of the continent. It is a terminus at the end of the line and despite some pull in eastern and central Africa for traffic destined to South America and Australia and historically worldwide from Mozambique , Zimbabwe and Malawi it is not a comprhensive hub. Nor can it be developed to tap into major long-haul flows of traffic as practised so well by the Gulf states. In July the Public Enterprise Minister increased the pressure saying the airline needs ‘a whole new re-think’ adding that it cannot continue to ask Government for financial assistance. SAA faces a deeply challenging 2-3 years as it contracts the long-haul network to concentrate on building African regional routes.
Safety hit the headlines in June. The total loss of 2 Nigerian registered aircraft in 24 hours prompted the immediate withdrawal of operating licences and an NCAA audit of all operators. Government has now gone further and is proposing mandatory IATA IOSA certification for all licenced Nigerian carriers. Meeting in Abuja in July,IATA and ICAO urged government ministers of Africa to endorse and adopt a proposed ‘Africa Strategic Improvement Action Plan’ to enhance safety progressively to 2015.Not least among the recommendations is the establishment of independent CAAs in all African countries but many simply don’t have adequate numbers of qualified and experienced inspectors . Higher salaries and improved conditions elsewhere steadily draws them away from home.
Whilst SAA grapples with historic problems, FastJet is moving to tackle the imminent difficulties of creating a pan sub-Saharan low cost carrier (LCC). Nairobi, Accra and Dar es Salaam are to be hubs. Obstacles in the way will include protection of existing interests, obtaining traffic rights, and establishing maintainence bases . It will try to avoid unions like the plague. If successful ,passenger volumes are forecast to reach 5 million in year 3 as is profitability with an all-jet A320 series fleet. Kenya Airways is also moving towards the launch of its planned LCC subsidiary, Jambo Jet but at what pace and whether their heart is really in this potential distraction from their mainline brand is not clear. The search for profitability will be tough but Kenya Airways perhaps has slightly better odds by choosing to concentrate on familiar East African routes whereas Dar es Salaam –Windhoek will be totally unknown territory for FastJet.
And in the margin, Air Tanzania sinks ever deeper towards oblivion. The operating fleet has been reduced to zero and now Government has fired the CEO plus 4 senior directors.
1.EAST AFRICA
Air Tanzania sacked acting CEO Paul Chizi, and replaced him with Milton LusajoLazaro. Four other senior directors are also suspended. (Jun 2012)
Ethiopian Airlines launched the Addis -Toronto route in July 2012. They are also evaluating a stronger presence in Asian markets, notably Singapore and Kuala Lumpur, plus ‘more destinations in China’ (Jul 2012)
Ethiopian Airlines will at the end of the year introduce Addis to Sao Paulo via Lome, Togo. They hope for a West/Central African feed of 40% by their owned partner ASky of Togo. (Jun 2012)
Ethiopian Airlines are again talking of creating a new hub in ‘one of the Congos’ together possibly with another in Zambia or Tanzania. (Jun 2012)
Ethiopian Airlines has stressed the strategic importance of its increasing investment in flight crew and maintenance training centres in Addis Ababa (Jun 2012)
Ethiopian Airlines launched Addis-Toronto services from July. They are also evaluating a stronger presence in Asian markets, eg SIN, KUL, SEL, plus ‘more destinations in China’ .Another B777-200LR has also been ordered (Jul 2012)
Kenya Airways’ USD250mn rights issue of March raised USD171m (70% uptake) to fund 10 year expansion ‘Project Mawingu’. Destinations are to rise from 56 to 115 by 2021. (Jun 2012)
Kenya Airways CEO, Titus Naikuni, has called for wide-ranging cost-cutting, due sharp drop in profit levels in FY 2011-12. However the Aviation and Allied Workers Union has now obtained a temporary High Court injunction preventing the airline from declaring redundancies. The airline, despite its good terms and conditions, has always had difficult unions and often problematical relationships with staff at all levels.
The airline’s aggressive fleet and network expansion is to continue although it won’t be helped by further problems for Nairobi airport’s redevelopment. The latest is that the Transport Minister is reported to have instructed the Kenya Airports Authority to reverse their decision to award a Chinese company a 55 billion shilling contract for the reconstruction of the airport. The Chinese company has protested to the Public Procurement Oversight Authority .
The Abuja route will start in September but those to Muscat and Rome will cease.
Other new points are to be Lumumbashi via Lusaka. Next up should be Harare in November, possibly added as a call on the thrice weekly Maputo service.
Muscat has never really worked although starting in 2002 Oman Air had a good try with 737s from Mombasa which has the strongest and historic, some of them not too cheery, connections with the Oman. The Rome problem has always been low yield as there are on offer large volumes of rock bottom all inclusive cheap air fare/cheap hotel rate/ eat and drink as much as you like beach destined travellers but very few upper end and premium class passengers. This has been much the pattern since the 1960s and a number of attempts to make Rome work have failed and the service has been withdrawn previously despite howls of protest from the Kenya coast Italian community around Malindi.
Kenya Airways – as above , the delivery of the first 787s now looks like being in early 2014 . (Jun 2012)
Kenya Airways has mandated the African Export-Import Bank (Afreximbank) to arrange the financing for 9x B787, 1x B777-300 and 10x Emb190 . Meanwhile it is awaiting government approval to launch its proposed low cost subsidiary, Jambo Jet . Government may well be asking whether this is something the airline should really do rather than concentrate its management and resources on its prime task. In Europe BA faced the same problem with “Go” and quite early on lost its nerve and sold its successful offspring to a delighted EasyJet.
On its too frequently problematical industrial relations front , Kenya Airways has signed a new collective agreement with KALPA enshrining ‘mutual goodwill’ . Despite that it faces strong resistance to hiring 60 non-Kenyan contract (ie temporary and non career) pilots to meet fleet growth . Goodwill is a very difficult thing to quantify but clearly for the union it does not extend to overcoming the long standing antipathy to employing foreigners, even African ones. This itself doesn’t encourage foreign pilots to show much interest in joining. The flight deck is a lonely and miserable place to be for anyone who isn’t welcome. (Jul 2012 )
B733 ops from DAR to Lubumbashi via Lusaka. Flights to Harare and Angola are planned by Nov 2012. (Jun 2012)
Precison Air is to resume ATR42/72 Arusha services as runway work is nearing completion . Meanwhile B737-300 services are to commence from Dar es Salaam to Lubumbashi via Lusaka and are planning to operate to Luanda and Harare the end of 2012. The airline's strategy is to expand regional services and they will be keeping a weather eye on Fastjet’s intentions while planning to add 3 ATR72-600s and 2 ATR42-600s to their fleet by mid-2014.(Jun 2012)
2. SOUTH / CENTRAL AFRICA
1Time on June 1st withdrew from at Lanseria to consolidate at Johannesburg’s OR Tambo. Lanseira looks attractive from the cost point of view but the customers are so used to heading for the long time main airport that not enough are abandoning habits of a lifetime. (Jun2012)
1Time CEO, BlackyKomani, says agreement is close on new joint venture with an unnamed Southern African country. Please let it be Malawi . See below.(Jun2012)
Air Malawi – Not for the first time the Government has declared the loss to be unsustainable. The 2011 edition of USD4.1 million is again so labelled. Government policy is now avowedly to seek a strategic investor to revive the company. This will only work though if government backs off and the investor has total freedom of action of obstruction from any source. Meanwhile Ernst and Young is to guide on company restructuring. No doubt they will do a thorough job , do a nice presentation and it will cost a lot of money. It could though be done in a day by one or two people who know its business, its background and realities at a fraction of the price , if not on restaurant napkins then on on A4 sheets,- and not many of them. ( Jun 2012)
Air Namibia is to lease 2 new A330s to replace its elderly, lease expired, 2 A340s. Fuel costs and initial engineering costs will go down but unless the A340 deal was terrible leasing costs will rise significantly . (Jul 2012)
Air Zimbabwe has taken delivery of a second A320 leased from China Sonangol. The first arrived in January 2012. A Ernst and Young report on restructuring is imminent. They can then go on to Malawi (see above) (July 2012)
Air Zimbabwe IATA is allowing 90days for IOSA re-certification or the airline will lose membership .(Jun 2012)
SAA is ceasing will withdraw from Capetown –London on 15th August citing a 24% drop in UK-South Africa volumes caused over the last three years in part, by the UK’s high APD tax and USD80 transit visa.
On 17Aug it will extend current two of its weekly Johannesburg-Accra A330 services to Abijan with local traffic rights. On September it will launch rwice weekly A319s to Brazzaville (Jun2012)
SAA Public Enterprise Minister says the airline ‘needs a whole new rethink’ and that ‘it cannot keep approaching government for financial assistance’ (Jul 2012)
SAA and Qantas have been granted interim extension of permission to codeshare on their flights between Johannesburg, Perth, and Sydney, until the end of March 2013. (Jul 2012)
SA Airlink on 15th June launched ERJ135 flights from Joburg to Maun. Larger RJ 85s are due to take over in due course . (Jun 2012)
Swift Air (Malawi) despite its early promise has ceased flying. Cash and debt difficulties are blamed. A familiar problem for startups who simply underestimate the cost of an initial period of flying with low loads . The Malawi CAA also has also questioned alleged licence breaches. (Jun 2012)
Zambezi Airlines resumed business on mid-June with 1 CRJ200 leased from SA Express. (Jun2012)
3. WEST AFRICA
Air Nigeria continues to have an unhappy life. There has been a strike by pilots over unpaid salaries and other cash related grievances. To compound the headaches the NCAA suspended all operations pending ‘safety inspections’ following engineers strike and for doubts over the financial security of the company. Such things don’t impress the customers. As if that were not enough the CEO was arrested for USD3 of unpaid corporate taxes. The Chairman was also sought, allegedely for mis-use of GoN Aviation Intervention Fund monies.
It doesn’t therefore come as a surprise that GECAS re-possessed four leased B737-300 . Air Nigeria executives must wonder what a good day in the office would feel like. (Jul 2012)
Associated Aviation (Nigeria) a domestic operator has taken on 4 Emb145s (Jul2012)
CTK CityLink Airlines (Ghana)is resuming Accra-Kumasai/Takoradi with 1 F100. Accra –Kumasi fels a bit crowded with 70 weekly frequencies by 4 operators but nevertheless it is on FastJet’s list of initial Ghana A319 operated domesic services. Meanwhile Antrak Air which has ploughed a steady if unspectacular furrow despite the surprise purchase a few years ago of 2 ex Ghana Airways DC9s which it then seemed never to actually operate, stopped flying for two months but is now back in the air with a leased ATR and only doing the Accra-Kumasi route. (Jun 2012)
Dana Air (Nigeria) The NCAA suspended their licence indefinitely following the totally fatal MD83 Lagos crash (Jun12)
Fastjet is planning an October launch in Nairobi and Accra using existing Fly540 AOCs. It will be an all-jet operation flying leased A319s with 156 seat configuration. The existing Fly540 leased turbo-props and the Fly540 brand will gradually disappear. Bases in Tanzania and Angola are to follow. It sees huge potential for a pan-African Low Cost carrier but it will be a tough nut to crack. Ed Winter who worked with Barbara Cassani in Go and later with Easyjet is appointed appointed as CEO. They will need some solid Africa expertise in their top team .(Jun 2012)
4. NORTH AFRICA
Afriqiyah has resumed flying Tripoli -London Gatwick with an A320. (Jul2012)
EgyptAir Group is considering subsidiary EgyptAir Express using E190 or Bombardier CSeries to take over certain B735 African routes from parent EgyptAir. (Jun 2012)
Royal Air Maroc to lease A310 from HiFly (Portugal) for the summer 2012 season (Jun 2012)
5. NON-AFRICAN AIRLINES
Air France added daily Abuja flights to its Lagos and Port Harcourt Nigerian points on 4th June. Added to the new Kenya Airways Nairobi service this gives the Nigerian capital more useful spokes to its international network.(June 2012)
Air France has entered a codeshare with Air Burkina and Air Mali . This looks like a defensive move following joint investment by AKFED (Aga Khan Fund for Economic Development) in the new Air Cote d’Ivoire. Its predecessor was historically an Air France groupie. AKFED also has holdings in Air Burkina and Air Mali , both in territory in which Air France has historic and threatened interests. French speaking West African countries tend to have a love/hate relationship with Air France often publicly decrying their dominance on routes to Paris but privately preferring their service (Jun 2012)
British Airways on the other hand is not involved in a scramble for Africa . Seemingly quite the reverse in fact despite many others piling in to the continent and some long and profitable assosciations going back to the 1930s. June saw the withdrawal of services on the previously BMi operated Heathrow - Addis Ababa route . Presumably this will help free up slots for the airline’s new 4 daily London-Leeds services. Meanwhile the airline continues to blame lack of slots for its inability to expand its long haul operations , especially to China , Asia and South America. With the withdrawal of Virgin from Nairobi-London a logical move would have been to grasp the nettle and go double daily offering overnight and daylight flights in both directions . These would have given all the competition a headache but there is no sign of any enthusiasm in BA for that .(Jun 2012)
Brussels Airlines , undeterred by likely low yields on this mainly holiday/inclusive tour route plans to extend its experience of serving destinations throughout Africa with a November launch of Brussells -Mombasa scheduled services. (Jul 2012).
Emirates on 01 June launched B777-300ERs between Dubai and Durban. (Jun 2012)
Etihad joined the Gulf/Lagos traders and sixth freedom markets fray on 1 July with six weekly A330-200s between Abu Dhabi and Lagos. (Jul 2012)
Iberia also expanded its African reach by starting Madrid-Nouakchott-Accra with A319s.
(Jul12)
KLM another Africa enthusiast is adding 3 weekly A330-200s to Harare from October. Harare is definitely beginning to come in from the cold despite the continuing Mugabe regime. (Jul 12)
Lufthansa While SAA has withdrawn from Capetown –London Lufthansa is adding a link to its secondary hub in Germany with the launch of Munich to Cape Town in time for the European winter season. Services start in September. (Jul 2012)
Qatar Airways added A320 flights to Kilimanjaro eff 23 July .Its East Africa coverage which now includes Entebbe, Nairobi, Dar es Salaam . Also to come in August are new services to Mombasa and Zanzibar . Competition in this region gets tougher by the day. (Jul 2012)
Ryanair has withdrawn 34 weekly services in Morocco, citing higher charges levied by the country's airports authority, ONDA. (Jun 2012)
Turkish Airlines CEO TemelKotil says that 2012 will see African cities served rise from 20 to 30 with 40 anticipated for end-2013. Most cities will be served by B738 and B739Ers specifically configured for these long (for narrowbody)routes. Elsewhere this airline’s relentless persuit of more and more spokes from its Istanbul hub is seeking Nigerian approval for scheduled services to Abuja and Kano . This carrier hardly stops for breath in its dash for network expansion and reach. and one has to assume that the Turkish Government sees this project to establish the carrier as a real alternative to the Gulf airlines as a national one which they will underpin financially. (Jul 2012)
6. MISCELLANEOUS
Ghana is to seek USD741m investment for development of 5 national airports. (Feb 2012)
IATA and ICAO are urging government ministers of Africa to endorse and adopt Africa Strategic Improvement Action Plan to enhance safety progressively to 2015 (Jul 2012)
Libya, Tripoli International Airport was temporarily closed on 4 June after militia seized the tarmac and grounded all flights. Libyan army has since regained control (Jun 2012)
Nigeria the federal government directs the NCAA to audit all operators in Nigeria following the Dana Air MD80 Lagos crash. ICAO invited to conduct the audit. (Jun12)
Nigeria Government is specifying IOSA certification as mandatory for all Nigerian licenced operators (Jul 2012)
South Sudan The EU has granted €12.5m for Juba Airport security upgrade. That looks like a lot of money for the task .Air Uganda, Kenya Airways and Ethiopian Airways operate (Jun1 2012)
Tanzania Arusha airport has reopened with its runway extended and new a terminal building. The dilemma here for Arusha’s original airport and close to the town, ever since underutilised Kilimanjaro on the plains between Arusha and Moshi opened in the 1960s ,has been how to update and improve it while not drawing much needed business away from Kilimanjaro. (Jul 2012)
Tanzania Government is facing union type pressure against licencing of non-Tanzanian pilots.(Jul 2012)
John Williams
August 2012
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