African Snippets October - November 2013
Will a new Nigerian national carrier take to the skies? Since early 2013 expectation has been fanned by Government announcements and speculation. But details , as ever, are far from clear. In recent days, without announcement, an Aero Contractors B737-500 has landed at Lagos resplendent in a new green and white livery and sporting the carrier name Nigeria Eagle. Some observers believe this confirms that Aero ,- which has been operating scheduled services since 1959 - is the chosen vehicle. But others claim it is merely a publicity livery for the national football team recently qualified to appear in next year’s World Cup finals in Rio.
But why a new national carrier? Arik, previously seemingly the officially favoured Nigerian airline, has a widening long-haul network, including the USA. Does this not fit the role? Outside Nigeria perhaps it is seen this way but at home Government has been reluctant to grant it the title citing poor performance on its domestic network. That can be taken to mean that someone somewhere doesn’t like it or it hasn’t done the necessary diplomatic work with them, or that for some reason they are more enthusiastic about Aero.
A compelling need for a ‘national carrier’ is in the DNA of government ministers worldwide. In Nigeria there is the added spur that many of the Nigerian carriers are unprofitable and have continued operations only with generous bank loans. There are currently 17 registered Air Operators’ Certificate holders of which only 7 have allocated IATA 2 letter codes. The number operating regular scheduled services seems to fluctuate between 5 and 6. The scale of some of the non-performing or toxic loans, - and those of other businesses, - have put banks’ stability at risk. In 2010 Government in response created the Asset Management Corpn of Nigeria (AMCON) to take over these toxic assets. Figures vary but up to 12 airlines have perhaps benefitted by a total USD 830mn. Amongst them is Aero with USD200mn part of which has, in August this year, been converted into 60% equity in the company, plus management control. The Government is now therefore back in the airline business and needs to decide what happens next. That brings us back to the question of a ‘national carrier’, plus talk of a possible IPO.
But what happens to the other 11 airlines, 2 or 3 of which are seasonal Hadj operators and several others appear to be non AOC holding (surely not??) charter operators? Government has hinted that one or more may be merged into the new national airline but there are no details. Thanks to conflicting interests the “how” promises at best to be a nightmare .What further confuses the picture is the existence of the Central Bank of Nigeria’s USD1.9bn Aviation Intervention Fund for ‘development of the aviation sector’. There has been claim and counter-claim as to how this money has been accessed and used but the Aviation Minister said in November 2012 that USD500m will be used to provide a pool of ’30 efficient aircraft’ for the use of Nigerian operators. Embraer has been said to be in negotiation but further details are vague including the bidding process for use of the aircraft and a host of other financial and operational complexities.
Will any of this result in improved levels of product quality, operational reliability and financial performance? Perhaps. But there is a host of other shortcomings that need to be addressed before customer satisfaction rises. Reliable electricity supplies for all airports would be one starting point.
From the history books …. Exactly 55 years ago, in October 1958, Nigeria Airways took to the skies. Born out of West African Airways Corporation which split up on Ghana’s 1957 independence it inherited a mixed fleet of Doves, Herons and DC3s. Lagos-London services were immediately started with a wet leased (BOAC flight deck and Nigeria Airways cabin crew under a BA training Chief Steward ) BOAC Argonauts and Stratocruisers followed shortly by Britannias and later by VC10s. Financial management had its gaps and debts quickly mounted. TWA was contracted for 5 years management assistance in the 1970s followed by Swissair for 2 years. Despite initial optimism neither had a magic recipe and fared no better than BOAC who at least understood the problems. Spurred on by nepotism (everybody wanted to bring their relatives in) and by bad management staff numbers climbed to 8,500 and the fleet to 32 aircraft. With the added burden of excess staff the debt and a myriad of other weaknesses continued to grow. The fleet declined to just 3 aircraft and in 2001 the UK banned them from its skies. Operations ceased in 2003. As in East and Central Africa later, national politics and rivalries, started by Ghana in 1958, had killed off English speaking West Africa’s best chanve of a vibrant and successful regionally owned carrier with a viable size and network. French speaking West Africa persevered for longer with Air Afrique but eventually that also fell apart in 2002. Again nationalism, politics and poor management had taken their toll.
EAST AFRICA
Air Tanzania is planning to aquire a single CRJ200 for regional services . Their current fleet consists of a solitary Bombardier Dash 8-300 and a leased B737-200. (Oct 2013)
Ethiopian Airlines received the first of 4x B777-300ER on 7th November and 7 days later on 14th November launched non-stop Addis - Toronto 787 services to be followed on 3rd December with the inauguration of a new thice weekly service to Singapore.
For use closer to home and with its subsidiaries Asky and Malawi Airlines the airline is to lease 4 additional Q400 raising the fleet type to 17. They see this fleet growing to 25 aircraft (Nov 2013)
FastJet . Again,where does one start? Certainly not in London zoo , the recent venue of a first anniversary party. For whom? The zoos residents? Some definitely have an interest in Africa and would no doubt very much like to be there. The quest must have been for potential deep pocketed investors with a similar desire. The occasion was certainly not for those who might actually travel on the airline. They are in Africa . See atlas for location. Those in Tanzania though did get a one day special celebratory offer of all domestic tickets sold for $20. Zambia and Malawi are planned to be the next routes from Dar es Salaam but not with ground (air?) breaking high frequencies which have been a feature of low cost ventures elsewhere. The increased Dar-Mbeya frequencies are helpful but again not shattering. East African did much the same albeit with DC3s.
The delayed three times weekly A319 flights between Dar es Salaam and Johannesburg finaly started on 18th October with their regulatory hiccup with SA Department of Transport overcome and Foreign Operator Permit granted. Prices in South Africa are quoted inclusive of taxes.
In a move entirely unrelated to all this FastJet’s leading founder and originally 71% shareholder, Lonrho, sold its remaining 11% holding. Lonrho is a son of Lonrho,or part of Lonrho and is not the same animal , parrot even, as Tiny Roland’s Africa dominating conglomerate Lonrho which was a major player in the continent’s politics and business back in the 1970s and 80s. That was split up by Rowland’s successor in 1998, the all important mining division becoming Lonmin.
The airline lost US$ 37 million in its first year of operation so the shareholders need to see that recouped before they even get to square one in seeing a dividend. It could be a long haul for this shorthauler.
Kenya Airways continues its expansion in the absence of a permament arrivals terminal at its base and hub airport , Jomo Kenyatta, at Nairobi. The first of its 3 GCAS leased B777-300ERs was accepted on 25th October and went into service to Guangzhou. The first of the long overdue 9 B787s is due in March 2014. In the meantime there are more E190 deliveries.
As we have recorded on November 18th in a previous article,CEO Titus Naikuni has questioned the further purchase of Boeing aircraft whilst KQ is denied direct operations from Nairobi to the USA. To make any progress he will have to mend a lot of holes in a lot of security fences, not least those around Nairobi Airport. A 24 hour on site fully trained and equipped rapid response unit would have to part of this along with immediately implimentable lock down and other proceedures. Meanwhile Mr Naikuni’s term of office has been extended by a year while a search for his successor takes place.
The Kenya Airways/KLM joint venture on the Nairobi-Amsterdam and Nairobi-Paris routes is to be substantially expanded from 1st January to also encompass Kenya Airways’ Nairobi-London and KLM’s routes from Amsterdam to Entebbe/Kigale as well as to Lusaka/ Harare and Kilimanjaro/Dar es Salaam. This will put around 44 flights a week with a revenue of more than US$ 500 million into the arrangement. Passenger and cargo revenue are both included. Air France/KLM now covers 15 African cities in its own right.
(Oct/Nov 2013)
Precision Air. The Tanzania Government has turned down a USD32m ‘capital injection’ into the private company but discussion continues including possible equity stake. It is unclear how this would fit with the state ownership with the problematical Air Tanzania which should have been “let go” a long time ago.
In an essential and undoubtedly interesting exercise , the airline has appointed Deloittes to “dig further into [our] financial performance”. There are reports of a drop to USD1.9m loss for 2013. Fuel prices are blamed but there is silence on the effects of fare cutting FastJet’s November 2012 entry onto domestic routes. Right now Precision is into cost cutting to stem the losses. (Nov 2013)
SOUTH / CENTRAL AFRICA
Air Namibia The airline’s sole shareholder, the Namibian government has talked about a possible long haul route to China, aimed presumably at both the African traders and the Chinese workmen. There is plenty of competition for this business both from the Gulf airlines and Africa’s Kenya Airways and Ethiopian so for this airline it could be another dramatic loss maker.
The long haul fleet has become more fuel efficient thanks to the arrival of the second leased A330-200. On the short haul side the 2016 expiry of the lease of 4 EMB-135s could see the arrival of larger replacements.
Once more searching for solutions to its problems, the airline has appointed Rene Gsponer, previously IATA Senior Aviation Consultant, to the new role of COO. (Nov 2013)
Air Zimbabwe The Zimbabwean Transport Ministry has said, - correctly,- that the court action over an alleged USD40m bill for unpaid salaries plus the existence of USD140m unpaid creditors owed US$ 140 million frightens off potential investors. It does, but so do fears about restrictions on foreign investment and political intervention into almost every corner of the airline or for that matter any other business in the country. (Nov 2013)
Blue Sky (Botswana) continues its progress towards AOC acquisition so as to enable launch of a Gaborone-CapeTown and other regional services with a leased B737-200 received in February 2012 (Oct 2013)
EWA Air (Mayotte). This is a new regional carrier which launched Dzaoudzi – Dar es Salaam and Moroni routes with ATR72 leased from 25% shareholder Air Austral on 2nd November. The private investors in the other 75% of shares include the Mayotte Chamber of Commerce. (Oct 2013)
FlySafair postponed its launch pending proving to a court its 75% S African ownership (Oct 2013)
Gabon Airlines, Air Gabon’s successor, has go into liquidation. Flights ceased in 2011 (Oct 2013)
International Air Transport Business ITAB (DRC). This Lubumbashi based carrier is re-starting services with a combi-B737-200 on a thrice weekly Lubumbashi – Mbuji Mayi - Kinshasa route. (Oct 2013)
Kalahari Airways (Botswana) under its “old Botswana hand” CEO Denis Coghlan has jumbo ambitions . It is planning an early 2014 Durban-Gaborone-London start-up with ex Qantas B747-400s and later intends to extend its reach to the USA and Hong Kong. The position of its AOC is unclear. (Oct 2013)
Malawi Airlines . Ethiopian Airlines, the 49% shareholder in this Air Malawi replacement anticipated the start of flying in Sep/Oct 2013 pending full regulatory approvals. Its key destinations are Johannesburg, Dar es Salaam, Harare, Lusaka and Nairobi. The initial fleet consists of a single B737-800,and one Dash 8 Q400 both leased from Ethiopian . The problem of solo aircraft and the problems caused by any unserviceability dogged Air Malawi for years. Hopefully the fleet will be fattened up to 3 aircraft of each type both to impart some resilience and to give the operation some critical mass with more destinations and more frequencies.
Cross border flights to Beira, Tete and Maputo in Mozambique are already planned for January 2014. Tete and Maputo are new but there have at times been scheduled flights on the Beira route. Domestically the key Lilongwe-Blantyre route needs at least 3 consistently timed flights six days a week. One might suffice late on Sunday afternoons.
On the management side, Ethiopian Airlines has appointed Kassim Geressu as CEO. The operational start-up, now targeted for December, continues to be dependent on the AOC award by the Malawi CAA ,itself undergoing upgrading following a recent ICAO audit. (Oct 2013)
Proflight (Zambia) launched 3 weekly J41 services between Lusaka and Dar es Salaam on 23rd October. They have now returned their 737-200 to the lessors and will concentrate on smaller aircraft , mainly J41s,for the time being.(Oct 2013)
SAA, always looking for a bigger role within Africa but never yet being able to quite achieve it ,is again thinking about a West African hub in a “by 2016” timescale. It is a dream of many, but where and how? SA Express talked of the same sort of thing earlier this year announced a similar ambition but the question remains the same. Dakar is said to be a lead contender but as we have previously pointed out,its only real use is as a collecting and distribution point for flights across the Atlantic. Perched on the extremity of the continent’s western seaboard it is too far west to be an intra-West Africa hub. Undaunted by that and perhaps with the US business dominating its thinking, the South African government has already pledged help in establishing an MRO at the new airport. This might involve SA Technics .
Now embarked on its latest turnaround plan,”Gaining Altitude” the airline which is receiving US $600 to help it on its way/ bail it out is as part of of its route rationalisation , will in March 2014 drop its Buenos Aires and Sao Paulo routes .Why wait though ? The best thing to do would be to drop these points immediately rather than continue to pointlessly spill money for several more months. Elsewhere the dead hand of government involvement as the the sole shareholder continues. It has insisted on the retention of loss-making Beijing flights. Again we have been clear about the answer to this before, -“You want it, you pay for it” . Who though is going to have the personal courage to say that? There is a lot of unemployment in South Africa, even amongst CEOs. There continue also to be statements about more concentration on intra-African routes but the reality has been the addition of the odd flight here and another there. Nothing bold, ground breaking or really new. Disappointing .(Nov 2013)
Skywise (S Africa) has deferred its startup date, originally last September . The process of aquiring an AOC is taking longer than expected, but then that’s hardly unexpected for a new carrier.(Oct 2013)
TAAG of Angola has added a second weekly Luanda – Beijing service (Oct 2013)
WEST AFRICA
Aero. As described in our opening paragraphs above, Aero, formerly in the ascendancy then seemingly sidelined, seems to be on the political up again .It is now expected to be announced as the new national carrier, Nigerian Eagle, but in Nigeria nothing is certain until it’s certain,- and not always even then. Aero is 60% owned by government’s Asset Management Co (AMCON) and 40% the Ibru family. The government intends to sell down its share. Hugh Fraser whose career includes a period at Kenya Airways, a place of relatively high turnover of expatriates, and subsequent African roles with the Aga Khan Foundation, has recently been appointed as CEO. A single 737-500 has been repainted in the new green and white livery. (Oct 2013)
Africa World Airlines (Ghana) is a newcomer which is now operating domestic services to Tamale, Kumasi and the port of Takoradi with 2 E145s on “peppercorn leases” . There is no sign yet of Accra-Lagos services which were at one time due to start in November or to Abuja and Freetown which were slated for a month later.
Founded by wealthy Ghanaian entrepreneur Togbe Afede this carrier breaks new ground in Africa by being the latest extension to the span of Chinese involvement in the continent’s infrastructure and mineral resources. A major minority share is held by China’s HNA group which also owns Hainan Air and Hong Kong Airlines .Several of its senior managers are on loan from Hainan Airlines. Another minority shareholder is Ghana’s state Soocial Security and National Insurance Trust. The overall plan is for the 50 seater EMB 145s with their very limited hold space and cramped cabins to be replaced with 737s or A320s and the route network to be expanded within 5 years to cover to cover Abijan, Abuja, Banjul,Port Harcourt, Conakry,Entebbe (notably not Nairobi), Harare, Johannesburg,Lusaka,Luanda, and Ouagadougo. There have been reports of a possible long haul extension to Brazil before the 2014 World Cup but hopefully they are not mesmerised by that one. Major world sporting events are notorious for exciting dreams of wealth for anything that flies or offers beds. The reality in nearly every case has been intense disappointment thanks to numbers not meeting expectations , erratic and unbalanced flows and hotels simply pricing themselves out of business.
(Oct/Nov 2013)
Air Cote d’Ivoire is strengthening its critical mass by adding a third, this time owned , A319 to the 2 leased from Air France and for domestic services ordering 2 Q400s with options on 2 more (Nov 2013)
Arik Air is expecting December delivery of the first of 3 ordered CRJ1000s. The previously ordered 2 B747-8’s have now been converted to 2 B777-300ERs for 2016 delivery along with with 7 B787-9s following on behind in 2017-9. Up to 15 Bombardier CS300s are seen as possible replacement for the B737-700 fleet. (Nov2013)
ASKY of Togo is possibly to add a B737-800 , presumably from the Ethiopian stable, to the fleet of 3 737-700s in December (Oct 2013)
Azman Air (Nigeria). This is a Kano based start-up which now has 2 former BMi B737-300s painted in new livery standing in UK. It plans domestic operations but has yet to obtain an AOC (Nov 2013)
Camair-Co. Former Finance Minister Edouard Mfoumou has been appointed as new DG. Matthijs Boertien has been replaced as GM by Frederic Edimo. Current debt: approx US$101m
Meanwhile in newly envigorated persuit of its previously loss making long haul ambitions the company talks of seeking a B777 for almost immediate delivery and a hard-to-get B787 some time in 2014.
Thanks to the search for a 51% strategic investor faltering , the Cameroon airline is looking to Africa specialist Brussels Airlines for a closer commercial relationship. (Oct 2013)
Adding to the company’s possible problems , having now agreed financing , Camair-Co will now receive 2 additional MA60 twin turboprops thus reversing earlier concerns on their unsuitability for codesharing with European carriers. The MA 60 is built by Xian in China. It is an update of the former Xian Y7 with western engines and avionics . The Y7 was in turn is a licensed version of the original Russian Antonov AN-24 which first flew in 1959. The latter was designed to meet the rugged conditions of provincial Russia . It therefore has a very strong landing gear and and heavy structure but is now visibly a relic of a bygone era. It may be fine for UN relief type operations but it is so dated in appearance and and other characteristics that it lacks credibility with international passengers. It also lacks US and EU operating certificates.Most airlines would consider it an asset of last resort. It is though cheap to buy as China is keen to place it wherever they can,- and that largely means Africa.
(Nov2013)
Gambia Bird wet is leasing a from Titan, a successful contract operator , a B757-200 for three times weekly Gatwick – Freetown flights. It joins 2 Germania A319s leased to operate on the Banjul-Barcelona route and on intra West African services.
(Oct 2013)
Senegal Airlines is seeking a government cash injection in exchange for 51% ownership to overcome ‘many difficulties’. Services began in 2011 after the collapse of Air Senegal International. Currently it has 60% private ownership . The fleet comprises 3 A320s and a wet-leased CRJ100.It operates a regional and domestic network. (Oct 2013)
Starbow (Ghana) has put its 3BAe146 up for sale and is evaluating possible replacements. (Oct 2013)
NORTH AFRICA
Afriqiyah launched Tripoli-Paris flights using a leased Tunisair A319 on November 1st (Nov 2013)
Air Algerie has signed an MoU for 3 A330-200s to increase its fleet of versatile this type to 7. (Nov 2013)
Syphax Airlines has launched routes from Sfax to Istanbul and from Tunis to Benghazi/Tripoli (Oct 2013)
Tunisair started flights between Tunis and Tobruk (Libya) in November.(Oct 2013)
NON-AFRICAN AIRLINES
Air France has designated Africa as ’high potential market’ and from 27th October increased frequencies to Abuja, Port Harcourt, Yaounde, Libreville, Nouakchott and Conakry. Abidjan moved up to 10 per week. (Oct 2013)
Etihad normally in the expansion rather than contraction business has suspended Tripoli operations due to unspecified security and safety concerns (Nov 2013)
Lufthansa has joined KLM and Jetlink of Kenya in withdrawing services to Khartoum. One problem has been a shortage in Sudan of hard currency. This is blocking remittances of locally ticketed sales and so renders them valueless to the airline once local costs are covered.(Nov 2013)
MISCELLANEOUS
Ghana.The government never gives up its aspiration to have a good old fashioned national flag carrier It has now reconfirmed its intention to re-create one under a PPP arrangement with the state holding 10%. Bids have reportedly been received from 13 potential partners and World Bank funding being sought. They might just hesitate. (Nov 2013)
Kenya Insecurity and terrorism incidents continue to depress tourism arrivals. In 2013 Kenya Airways has cut European capacity by 8% and tourism arrivals are 18% down on 2012 figures. Forward business in the game parks looks about 5% down which may not be a bad result in the circumstances (Nov 2013)
Swaziland. The government talks of re-creation of Royal Swazi National Airlines based on unused new Sikhuphe Intl Airport to serve routes other than Manzini-Johannesburg which is profitably served by SwaziAirlink a joint venture betwen the Swazi Government and Airlink of South Africa (Nov 2013)
Zambia’s government is mulling over a cabinet memo on the revival of a national carrier. Advice? Leave well alone. Zambia has been not been doing badly for air connections without one and independent Proflight has been operating well internally and to Lilongwe in Malawi. The market will provide so why pay for it?(Oct 2013)
John Williams
30 November 2013
African Snippets October - November 2013
Will a new Nigerian national carrier take to the skies? Since early 2013 expectation has been fanned by Government announcements and speculation. But details , as ever, are far from clear. In recent days, without announcement, an Aero Contractors B737-500 has landed at Lagos resplendent in a new green and white livery and sporting the carrier name Nigeria Eagle. Some observers believe this confirms that Aero ,- which has been operating scheduled services since 1959 - is the chosen vehicle. But others claim it is merely a publicity livery for the national football team recently qualified to appear in next year’s World Cup finals in Rio.
But why a new national carrier? Arik, previously seemingly the officially favoured Nigerian airline, has a widening long-haul network, including the USA. Does this not fit the role? Outside Nigeria perhaps it is seen this way but at home Government has been reluctant to grant it the title citing poor performance on its domestic network. That can be taken to mean that someone somewhere doesn’t like it or it hasn’t done the necessary diplomatic work with them, or that for some reason they are more enthusiastic about Aero.
A compelling need for a ‘national carrier’ is in the DNA of government ministers worldwide. In Nigeria there is the added spur that many of the Nigerian carriers are unprofitable and have continued operations only with generous bank loans. There are currently 17 registered Air Operators’ Certificate holders of which only 7 have allocated IATA 2 letter codes. The number operating regular scheduled services seems to fluctuate between 5 and 6. The scale of some of the non-performing or toxic loans, - and those of other businesses, - have put banks’ stability at risk. In 2010 Government in response created the Asset Management Corpn of Nigeria (AMCON) to take over these toxic assets. Figures vary but up to 12 airlines have perhaps benefitted by a total USD 830mn. Amongst them is Aero with USD200mn part of which has, in August this year, been converted into 60% equity in the company, plus management control. The Government is now therefore back in the airline business and needs to decide what happens next. That brings us back to the question of a ‘national carrier’, plus talk of a possible IPO.
But what happens to the other 11 airlines, 2 or 3 of which are seasonal Hadj operators and several others appear to be non AOC holding (surely not??) charter operators? Government has hinted that one or more may be merged into the new national airline but there are no details. Thanks to conflicting interests the “how” promises at best to be a nightmare .What further confuses the picture is the existence of the Central Bank of Nigeria’s USD1.9bn Aviation Intervention Fund for ‘development of the aviation sector’. There has been claim and counter-claim as to how this money has been accessed and used but the Aviation Minister said in November 2012 that USD500m will be used to provide a pool of ’30 efficient aircraft’ for the use of Nigerian operators. Embraer has been said to be in negotiation but further details are vague including the bidding process for use of the aircraft and a host of other financial and operational complexities.
Will any of this result in improved levels of product quality, operational reliability and financial performance? Perhaps. But there is a host of other shortcomings that need to be addressed before customer satisfaction rises. Reliable electricity supplies for all airports would be one starting point.
From the history books …. Exactly 55 years ago, in October 1958, Nigeria Airways took to the skies. Born out of West African Airways Corporation which split up on Ghana’s 1957 independence it inherited a mixed fleet of Doves, Herons and DC3s. Lagos-London services were immediately started with a wet leased (BOAC flight deck and Nigeria Airways cabin crew under a BA training Chief Steward ) BOAC Argonauts and Stratocruisers followed shortly by Britannias and later by VC10s. Financial management had its gaps and debts quickly mounted. TWA was contracted for 5 years management assistance in the 1970s followed by Swissair for 2 years. Despite initial optimism neither had a magic recipe and fared no better than BOAC who at least understood the problems. Spurred on by nepotism (everybody wanted to bring their relatives in) and by bad management staff numbers climbed to 8,500 and the fleet to 32 aircraft. With the added burden of excess staff the debt and a myriad of other weaknesses continued to grow. The fleet declined to just 3 aircraft and in 2001 the UK banned them from its skies. Operations ceased in 2003. As in East and Central Africa later, national politics and rivalries, started by Ghana in 1958, had killed off English speaking West Africa’s best chanve of a vibrant and successful regionally owned carrier with a viable size and network. French speaking West Africa persevered for longer with Air Afrique but eventually that also fell apart in 2002. Again nationalism, politics and poor management had taken their toll.
EAST AFRICA
Air Tanzania is planning to aquire a single CRJ200 for regional services . Their current fleet consists of a solitary Bombardier Dash 8-300 and a leased B737-200. (Oct 2013)
Ethiopian Airlines received the first of 4x B777-300ER on 7th November and 7 days later on 14th November launched non-stop Addis - Toronto 787 services to be followed on 3rd December with the inauguration of a new thice weekly service to Singapore.
For use closer to home and with its subsidiaries Asky and Malawi Airlines the airline is to lease 4 additional Q400 raising the fleet type to 17. They see this fleet growing to 25 aircraft (Nov 2013)
FastJet . Again,where does one start? Certainly not in London zoo , the recent venue of a first anniversary party. For whom? The zoos residents? Some definitely have an interest in Africa and would no doubt very much like to be there. The quest must have been for potential deep pocketed investors with a similar desire. The occasion was certainly not for those who might actually travel on the airline. They are in Africa . See atlas for location. Those in Tanzania though did get a one day special celebratory offer of all domestic tickets sold for $20. Zambia and Malawi are planned to be the next routes from Dar es Salaam but not with ground (air?) breaking high frequencies which have been a feature of low cost ventures elsewhere. The increased Dar-Mbeya frequencies are helpful but again not shattering. East African did much the same albeit with DC3s.
The delayed three times weekly A319 flights between Dar es Salaam and Johannesburg finaly started on 18th October with their regulatory hiccup with SA Department of Transport overcome and Foreign Operator Permit granted. Prices in South Africa are quoted inclusive of taxes.
In a move entirely unrelated to all this FastJet’s leading founder and originally 71% shareholder, Lonrho, sold its remaining 11% holding. Lonrho is a son of Lonrho,or part of Lonrho and is not the same animal , parrot even, as Tiny Roland’s Africa dominating conglomerate Lonrho which was a major player in the continent’s politics and business back in the 1970s and 80s. That was split up by Rowland’s successor in 1998, the all important mining division becoming Lonmin.
The airline lost US$ 37 million in its first year of operation so the shareholders need to see that recouped before they even get to square one in seeing a dividend. It could be a long haul for this shorthauler.
Kenya Airways continues its expansion in the absence of a permament arrivals terminal at its base and hub airport , Jomo Kenyatta, at Nairobi. The first of its 3 GCAS leased B777-300ERs was accepted on 25th October and went into service to Guangzhou. The first of the long overdue 9 B787s is due in March 2014. In the meantime E190 deliveries continue.
As we have recorded on November 18th in a previous article,CEO Titus Naikuni has questioned the further purchase of Boeing aircraft whilst KQ is denied direct operations from Nairobi to the USA. To make any progress he will have to mend a lot of holes in a lot of security fences, not least those around Nairobi Airport. A 24 hour on site fully trained and equipped rapid response unit would have to part of this along with immediately implimentable lock down and other proceedures. Meanwhile Mr Naikuni’s term of office has been extended by a year while a search for his successor takes place.
The Kenya Airways/KLM joint venture on the Nairobi-Amsterdam and Nairobi-Paris routes is to be substantially expanded from 1st January to also encompass Kenya Airways’ Nairobi-London and KLM’s routes from Amsterdam to Entebbe/Kigale as well as to Lusaka/ Harare and Kilimanjaro/Dar es Salaam. This will put around 44 flights a week with a revenue of more than US$ 500 million into the arrangement. Passenger and cargo revenue are both included. Air France/KLM now covers 15 African cities in its own right.
(Oct/Nov 2013)
Precision Air. The Tanzania Government has turned down a USD32m ‘capital injection’ into the private company but discussion continues including possible equity stake. It is unclear how this would fit with the state ownership with the problematical Air Tanzania which should have been “let go” a long time ago.
In an essential and undoubtedly interesting exercise , the airline has appointed Deloittes to “dig further into [our] financial performance”. There are reports of a drop to USD1.9m loss for 2013. Fuel prices are blamed but there is silence on the effects of fare cutting FastJet’s November 2012 entry onto domestic routes. Right now Precision is into cost cutting to stem the losses. (Nov 2013)
SOUTH / CENTRAL AFRICA
Air Namibia The airline’s sole shareholder, the Namibian government has talked about a possible long haul route to China, aimed presumably at both the African traders and the Chinese workmen. There is plenty of competition for this business both from the Gulf airlines and Africa’s Kenya Airways and Ethiopian so for this airline it could be another dramatic loss maker.
The long haul fleet has become more fuel efficient thanks to the arrival of the second leased A330-200. On the short haul side the 2016 expiry of the lease of 4 EMB-135s could see the arrival of larger replacements.
Once more searching for solutions to its problems, the airline has appointed Rene Gsponer, previously IATA Senior Aviation Consultant, to the new role of COO. (Nov 2013)
Air Zimbabwe The Zimbabwean Transport Ministry has said, - correctly,- that the court action over an alleged USD40m bill for unpaid salaries plus the existence of USD140m unpaid creditors owed US$ 140 million frightens off potential investors. It does, but so do fears about restrictions on foreign investment and political intervention into almost every corner of the airline or for that matter any other business in the country. (Nov 2013)
Blue Sky (Botswana) continues its progress towards AOC acquisition so as to enable launch of a Gaborone-CapeTown and other regional services with a leased B737-200 received in February 2012 (Oct 2013)
EWA Air (Mayotte). This is a new regional carrier which launched Dzaoudzi – Dar es Salaam and Moroni routes with ATR72 leased from 25% shareholder Air Austral on 2nd November. The private investors in the other 75% of shares include the Mayotte Chamber of Commerce. (Oct 2013)
FlySafair postponed its launch pending proving to a court its 75% S African ownership (Oct 2013)
Gabon Airlines, Air Gabon’s successor, has go into liquidation. Flights ceased in 2011 (Oct 2013)
International Air Transport Business ITAB (DRC). This Lubumbashi based carrier is re-starting services with a combi-B737-200 on a thrice weekly Lubumbashi – Mbuji Mayi - Kinshasa route. (Oct 2013)
Kalahari Airways (Botswana) under its “old Botswana hand” CEO Denis Coghlan has jumbo ambitions . It is planning an early 2014 Durban-Gaborone-London start-up with ex Qantas B747-400s and later intends to extend its reach to the USA and Hong Kong. The position of its AOC is unclear. (Oct 2013)
Malawi Airlines . Ethiopian Airlines, the 49% shareholder in this Air Malawi replacement anticipated the start of flying in Sep/Oct 2013 pending full regulatory approvals. Its key destinations are Johannesburg, Dar es Salaam, Harare, Lusaka and Nairobi. The initial fleet consists of a single B737-800,and one Dash 8 Q400 both leased from Ethiopian . The problem of solo aircraft and the problems caused by any unserviceability dogged Air Malawi for years. Hopefully the fleet will be fattened up to 3 aircraft of each type both to impart some resilience and to give the operation some critical mass with more destinations and more frequencies.
Cross border flights to Beira, Tete and Maputo in Mozambique are already planned for January 2014. Tete and Maputo are new but there have at times been scheduled flights on the Beira route. Domestically the key Lilongwe-Blantyre route needs at least 3 consistently timed flights six days a week. One might suffice late on Sunday afternoons.
On the management side, Ethiopian Airlines has appointed Kassim Geressu as CEO. The operational start-up, now targeted for this month continues to be dependent on AOC award by the Malawi CAA ,itself undergoing upgrading following a recent ICAO audit. (Oct 2013)
Proflight (Zambia) launched 3 weekly J41 services between Lusaka and Dar es Salaam on 23rd October . They have now returned their 737-200 to the lessors and will concentrate on smaller aircraft , mainly J41s,for the time being.(Oct 2013)
SAA , always looking for a bigger role within Africa but never yet being able to quite achieve it ,is again thinking about a West African hub in a “by 2016” timescale. It is a dream of many, but where and how? SA Express talked of the same sort of thing earlier this year announced a similar ambition but the question remains the same. Dakar is said to be a lead contender but as we have previously pointed out,its only real use is as a collecting and distribution point for flights across the Atlantic. Perched on the extremity of the continent’s western seaboard it is too far west to be an intra-West Africa hub. Undaunted by that and perhaps with the US business dominating its thinking, the South African government has already pledged help in establishing an MRO at the new airport. This might involve SA Technics .
Now embarked on its latest turnaround plan,”Gaining Altitude” the airline which is receiving US $600 to help it on its way/ bail it out is as part of of its route rationalisation , will in March 2014 drop its Buenos Aires and Sao Paulo routes .Why wait though ? The best thing to do would be to drop these points immediately rather than continue to pointlessly spill money for several more months. Elsewhere the dead hand of government involvement as the the sole shareholder continues. It has insisted on the retention of loss-making Beijing flights. Again we have been clear about the answer to this before, -“You want it, you pay for it” . Who though is going to have the personal courage to say that? There is a lot of unemployment in South Africa, even amongst CEOs. There continue also to be statements about more concentration on intra-African routes but the reality has been the addition of the odd flight here and another there. Nothing bold, ground breaking or really new. Disappointing .(Nov 2013)
Skywise (S Africa) has deferred its startup date, originally last September . The process of aquiring an AOC is taking longer than expected, but then that’s hardly unexpected for a new carrier.(Oct 2013)
TAAG of Angola has added a second weekly Luanda – Beijing service (Oct 2013)
WEST AFRICA
Aero As described in our opening paragraphs above, Aero , formerly in the ascendancy then seemingly sidelined , seems to be on the political up again .It is now expected to be announced as the new national carrier, Nigerian Eagle, but in Nigeria nothing is certain until it’s certain,- and not always even then. Aero is 60% owned by government’s Asset Management Co (AMCON) and 40% the Ibru family. The government intends to sell down its share. Hugh Fraser whose career includes a period at Kenya Airways , a place of relatively high turnover of expatriates, and subsequent African roles with the Aga Khan Foundation, has recently been appointed as CEO. A single 737-500 has been repainted in the new green and white livery. (Oct 2013)
Africa World Airlines (Ghana) is a newcomer which is now operating domestic services to Tamale, Kumasi and the port of Takoradi with 2 E145s on “peppercorn leases” . There is no sign yet of Accra-Lagos services which were at one time due to start in November or to Abuja and Freetown which were slated for a month later.
Founded by wealthy Ghanaian entrepreneur Togbe Afede this carrier breaks new ground in Africa by being the latest extension to the span of Chinese involvement in the continent’s infrastructure and mineral resources. A major minority share is held by China’s HNA group which also owns Hainan Air and Hong Kong Airlines .Several of its senior managers are on loan from Hainan Airlines. Another minority shareholder is Ghana’s state Soocial Security and National Insurance Trust. The overall plan is for the 50 seater EMB 145s with their very limited hold space and cramped cabins to be replaced with 737s or A320s and the route network to be expanded within 5 years to cover to cover Abijan, Abuja, Banjul,Port Harcourt, Conakry,Entebbe (notably not Nairobi), Harare, Johannesburg,Lusaka,Luanda, and Ouagadougo. There have been reports of a possible long haul extension to Brazil before the 2014 World Cup but hopefully they are not mesmerised by that one. Major world sporting events are notorious for exciting dreams of wealth for anything that flies or offers beds. The reality in nearly every case has been intense disappointment thanks to numbers not meeting expectations , erratic and unbalanced flows and hotels simply pricing themselves out of business.
(Oct/Nov 2013)
Air Cote d’Ivoire is strengthening its critical mass by adding a third, this time owned , A319 to the 2 leased from Air France and for domestic services ordering 2 Q400s with options on 2 more (Nov 2013)
Arik Air is expecting December delivery of the first of 3 ordered CRJ1000s. The previously ordered 2 B747-8’s have now been converted to 2 B777-300ERs for 2016 delivery along with with 7 B787-9s following on behind in 2017-9. Up to 15 Bombardier CS300s are seen as possible replacement for the B737-700 fleet. (Nov2013)
ASKY of Togo is possibly to add a B737-800 , presumably from the Ethiopian stable, to the fleet of 3 737-700s in December (Oct 2013)
Azman Air (Nigeria). This is a Kano based start-up which now has 2 former BMi B737-300s painted in new livery standing in UK. It plans domestic operations but has yet to obtain an AOC (Nov 2013)
Camair-Co. Former Finance Minister Edouard Mfoumou has been appointed as new DG. Matthijs Boertien has been replaced as GM by Frederic Edimo. Current debt: approx US$101m
Meanwhile in newly envigorated persuit of its previously loss making long haul ambitions the company talks of seeking a B777 for almost immediate delivery and a hard-to-get B787 some time in 2014.
Thanks to the search for a 51% strategic investor faltering , the Cameroon airline is looking to Africa specialist Brussels Airlines for a closer commercial relationship. (Oct 2013)
Adding to the company’s possible problems , having now agreed financing , Camair-Co will now receive 2 additional MA60 twin turboprops thus reversing earlier concerns on their unsuitability for codesharing with European carriers. The MA 60 is built by Xian in China. It is an update of the former Xian Y7 with western engines and avionics . The Y7 was in turn is a licensed version of the original Russian Antonov AN-24 which first flew in 1959. The latter was designed to meet the rugged conditions of provincial Russia . It therefore has a very strong landing gear and and heavy structure but is now visibly a relic of a bygone era. It may be fine for UN relief type operations but it is so dated in appearance and and other characteristics that it lacks credibility with international passengers. It also lacks US and EU operating certificates.Most airlines would consider it an asset of last resort. It is though cheap to buy as China is keen to place it wherever they can,- and that largely means Africa.
(Nov2013)
Gambia Bird wet is leasing a from Titan, a successful contract operator , a B757-200 for three times weekly Gatwick – Freetown flights. It joins 2 Germania A319s leased to operate on the Banjul-Barcelona route and on intra West African services.
(Oct 2013)
Senegal Airlines is seeking a government cash injection in exchange for 51% ownership to overcome ‘many difficulties’. Services began in 2011 after the collapse of Air Senegal International. Currently it has 60% private ownership . The fleet comprises 3 A320s and a wet-leased CRJ100.It operates a regional and domestic network. (Oct 2013)
Starbow (Ghana) has put its 3BAe146 up for sale and is evaluating possible replacements. (Oct 2013)
NORTH AFRICA
Afriqiyah launched Tripoli-Paris flights using with leased Tunisair A319 on November 1st (Nov 2013)
Air Algerie has signed an MoU for 3 A330-200s to increase type count to 7. (Nov 2013)
Syphax Airlines has launched routes from Sfax to Istanbul and from Tunis to Benghazi/Tripoli (Oct 2013)
Tunisair started flights between Tunis and Tobruk (Libya) in November. (Oct 2013)
NON-AFRICAN AIRLINES
Air France has designated Africa as ’high potential market’ and from 27th October increased frequencies to Abuja, Port Harcourt, Yaounde, Libreville, Nouakchott and Conakry. Abidjan moved up to 10 per week. (Oct 2013)
Etihad normally in the expansion rather than contration businss has suspended Tripoli operauions due to unspecified security and safety concerns (Nov 2013)
Lufthansa has joined KLM and Jetlink of Kenya in withdrawing services to Khartoum. One problem has been a shortage in Sudan of hard currency. This is blocking remittances of locally ticketed sales .(Nov 2013)
MISCELLANEOUS
Ghana.The government never gives up its aspiration to havea good old fashioned national flag carier and has reconfirmed its intention to re-create one under a PPP arrangement with the state holding 10%. Bids have reportedly been received from 13 potential partners and World Bank funding being sought. They might just hesitate. (Nov 2013)
Kenya Insecurity and terrorism incidents continue to depress tourism arrivals. In 2013 Kenya Airways has cut European capacity by 8% and tourism arrivals are 18% down on 2012 figures. Forward business in the game parks looks about 5% down which may not be a bad result in the circumstances (Nov 2013)
Swaziland The government talks of re-creation of Royal Swazi National Airlines based on unused new Sikhuphe Intl Airport to serve routes other than Manzini-Johannesburg which is profitably served by SwaziAirlink a joint venture betwen the Swazi Government and Airlink of South Africa (Nov 2013)
Zambia’s government is mulling over a cabinet memo on the revival of a national carrier. Advice? Leave well alone. Zambia has been not been doing badly for air connections without one. The market will provide so why pay for it?(Oct 2013)
John Williams
30 November 2013
African Snippets October - November 2013
Will a new Nigerian national carrier take to the skies? Since early 2013 expectation has been fanned by Government announcements and speculation. But details , as ever, are far from clear. In recent days, without announcement, an Aero Contractors B737-500 has landed at Lagos resplendent in a new green and white livery and sporting the carrier name Nigeria Eagle. Some observers believe this confirms that Aero ,- which has been operating scheduled services since 1959 - is the chosen vehicle. But others claim it is merely a publicity livery for the national football team recently qualified to appear in next year’s World Cup finals in Rio.
But why a new national carrier? Arik, previously seemingly the officially favoured Nigerian airline, has a widening long-haul network, including the USA. Does this not fit the role? Outside Nigeria perhaps it is seen this way but at home Government has been reluctant to grant it the title citing poor performance on its domestic network. That can be taken to mean that someone somewhere doesn’t like it or it hasn’t done the necessary diplomatic work with them, or that for some reason they are more enthusiastic about Aero.
A compelling need for a ‘national carrier’ is in the DNA of government ministers worldwide. In Nigeria there is the added spur that many of the Nigerian carriers are unprofitable and have continued operations only with generous bank loans. There are currently 17 registered Air Operators’ Certificate holders of which only 7 have allocated IATA 2 letter codes. The number operating regular scheduled services seems to fluctuate between 5 and 6. The scale of some of the non-performing or toxic loans, - and those of other businesses, - have put banks’ stability at risk. In 2010 Government in response created the Asset Management Corpn of Nigeria (AMCON) to take over these toxic assets. Figures vary but up to 12 airlines have perhaps benefitted by a total USD 830mn. Amongst them is Aero with USD200mn part of which has, in August this year, been converted into 60% equity in the company, plus management control. The Government is now therefore back in the airline business and needs to decide what happens next. That brings us back to the question of a ‘national carrier’, plus talk of a possible IPO.
But what happens to the other 11 airlines, 2 or 3 of which are seasonal Hadj operators and several others appear to be non AOC holding (surely not??) charter operators? Government has hinted that one or more may be merged into the new national airline but there are no details. Thanks to conflicting interests the “how” promises at best to be a nightmare .What further confuses the picture is the existence of the Central Bank of Nigeria’s USD1.9bn Aviation Intervention Fund for ‘development of the aviation sector’. There has been claim and counter-claim as to how this money has been accessed and used but the Aviation Minister said in November 2012 that USD500m will be used to provide a pool of ’30 efficient aircraft’ for the use of Nigerian operators. Embraer has been said to be in negotiation but further details are vague including the bidding process for use of the aircraft and a host of other financial and operational complexities.
Will any of this result in improved levels of product quality, operational reliability and financial performance? Perhaps. But there is a host of other shortcomings that need to be addressed before customer satisfaction rises. Reliable electricity supplies for all airports would be one starting point.
From the history books …. Exactly 55 years ago, in October 1958, Nigeria Airways took to the skies. Born out of West African Airways Corporation which split up on Ghana’s 1957 independence it inherited a mixed fleet of Doves, Herons and DC3s. Lagos-London services were immediately started with a wet leased (BOAC flight deck and Nigeria Airways cabin crew under a BA training Chief Steward ) BOAC Argonauts and Stratocruisers followed shortly by Britannias and later by VC10s. Financial management had its gaps and debts quickly mounted. TWA was contracted for 5 years management assistance in the 1970s followed by Swissair for 2 years. Despite initial optimism neither had a magic recipe and fared no better than BOAC who at least understood the problems. Spurred on by nepotism (everybody wanted to bring their relatives in) and by bad management staff numbers climbed to 8,500 and the fleet to 32 aircraft. With the added burden of excess staff the debt and a myriad of other weaknesses continued to grow. The fleet declined to just 3 aircraft and in 2001 the UK banned them from its skies. Operations ceased in 2003. As in East and Central Africa later, national politics and rivalries, started by Ghana in 1958, had killed off English speaking West Africa’s best chanve of a vibrant and successful regionally owned carrier with a viable size and network. French speaking West Africa persevered for longer with Air Afrique but eventually that also fell apart in 2002. Again nationalism, politics and poor management had taken their toll.
EAST AFRICA
Air Tanzania is planning to aquire a single CRJ200 for regional services . Their current fleet consists of a solitary Bombardier Dash 8-300 and a leased B737-200. (Oct 2013)
Ethiopian Airlines received the first of 4x B777-300ER on 7th November and 7 days later on 14th November launched non-stop Addis - Toronto 787 services to be followed on 3rd December with the inauguration of a new thice weekly service to Singapore.
For use closer to home and with its subsidiaries Asky and Malawi Airlines the airline is to lease 4 additional Q400 raising the fleet type to 17. They see this fleet growing to 25 aircraft (Nov 2013)
FastJet . Again,where does one start? Certainly not in London zoo , the recent venue of a first anniversary party. For whom? The zoos residents? Some definitely have an interest in Africa and would no doubt very much like to be there. The quest must have been for potential deep pocketed investors with a similar desire. The occasion was certainly not for those who might actually travel on the airline. They are in Africa . See atlas for location. Those in Tanzania though did get a one day special celebratory offer of all domestic tickets sold for $20. Zambia and Malawi are planned to be the next routes from Dar es Salaam but not with ground (air?) breaking high frequencies which have been a feature of low cost ventures elsewhere. The increased Dar-Mbeya frequencies are helpful but again not shattering. East African did much the same albeit with DC3s.
The delayed three times weekly A319 flights between Dar es Salaam and Johannesburg finaly started on 18th October with their regulatory hiccup with SA Department of Transport overcome and Foreign Operator Permit granted. Prices in South Africa are quoted inclusive of taxes.
In a move entirely unrelated to all this FastJet’s leading founder and originally 71% shareholder, Lonrho, sold its remaining 11% holding. Lonrho is a son of Lonrho,or part of Lonrho and is not the same animal , parrot even, as Tiny Roland’s Africa dominating conglomerate Lonrho which was a major player in the continent’s politics and business back in the 1970s and 80s. That was split up by Rowland’s successor in 1998, the all important mining division becoming Lonmin.
The airline lost US$ 37 million in its first year of operation so the shareholders need to see that recouped before they even get to square one in seeing a dividend. It could be a long haul for this shorthauler.
Kenya Airways continues its expansion in the absence of a permament arrivals terminal at its base and hub airport , Jomo Kenyatta, at Nairobi. The first of its 3 GCAS leased B777-300ERs was accepted on 25th October and went into service to Guangzhou. The first of the long overdue 9 B787s is due in March 2014. In the meantime E190 deliveries continue.
As we have recorded on November 18th in a previous article,CEO Titus Naikuni has questioned the further purchase of Boeing aircraft whilst KQ is denied direct operations from Nairobi to the USA. To make any progress he will have to mend a lot of holes in a lot of security fences, not least those around Nairobi Airport. A 24 hour on site fully trained and equipped rapid response unit would have to part of this along with immediately implimentable lock down and other proceedures. Meanwhile Mr Naikuni’s term of office has been extended by a year while a search for his successor takes place.
The Kenya Airways/KLM joint venture on the Nairobi-Amsterdam and Nairobi-Paris routes is to be substantially expanded from 1st January to also encompass Kenya Airways’ Nairobi-London and KLM’s routes from Amsterdam to Entebbe/Kigale as well as to Lusaka/ Harare and Kilimanjaro/Dar es Salaam. This will put around 44 flights a week with a revenue of more than US$ 500 million into the arrangement. Passenger and cargo revenue are both included. Air France/KLM now covers 15 African cities in its own right.
(Oct/Nov 2013)
Precision Air. The Tanzania Government has turned down a USD32m ‘capital injection’ into the private company but discussion continues including possible equity stake. It is unclear how this would fit with the state ownership with the problematical Air Tanzania which should have been “let go” a long time ago.
In an essential and undoubtedly interesting exercise , the airline has appointed Deloittes to “dig further into [our] financial performance”. There are reports of a drop to USD1.9m loss for 2013. Fuel prices are blamed but there is silence on the effects of fare cutting FastJet’s November 2012 entry onto domestic routes. Right now Precision is into cost cutting to stem the losses. (Nov 2013)
SOUTH / CENTRAL AFRICA
Air Namibia The airline’s sole shareholder, the Namibian government has talked about a possible long haul route to China, aimed presumably at both the African traders and the Chinese workmen. There is plenty of competition for this business both from the Gulf airlines and Africa’s Kenya Airways and Ethiopian so for this airline it could be another dramatic loss maker.
The long haul fleet has become more fuel efficient thanks to the arrival of the second leased A330-200. On the short haul side the 2016 expiry of the lease of 4 EMB-135s could see the arrival of larger replacements.
Once more searching for solutions to its problems, the airline has appointed Rene Gsponer, previously IATA Senior Aviation Consultant, to the new role of COO. (Nov 2013)
Air Zimbabwe The Zimbabwean Transport Ministry has said, - correctly,- that the court action over an alleged USD40m bill for unpaid salaries plus the existence of USD140m unpaid creditors owed US$ 140 million frightens off potential investors. It does, but so do fears about restrictions on foreign investment and political intervention into almost every corner of the airline or for that matter any other business in the country. (Nov 2013)
Blue Sky (Botswana) continues its progress towards AOC acquisition so as to enable launch of a Gaborone-CapeTown and other regional services with a leased B737-200 received in February 2012 (Oct 2013)
EWA Air (Mayotte). This is a new regional carrier which launched Dzaoudzi – Dar es Salaam and Moroni routes with ATR72 leased from 25% shareholder Air Austral on 2nd November. The private investors in the other 75% of shares include the Mayotte Chamber of Commerce. (Oct 2013)
FlySafair postponed its launch pending proving to a court its 75% S African ownership (Oct 2013)
Gabon Airlines, Air Gabon’s successor, has go into liquidation. Flights ceased in 2011 (Oct 2013)
International Air Transport Business ITAB (DRC). This Lubumbashi based carrier is re-starting services with a combi-B737-200 on a thrice weekly Lubumbashi – Mbuji Mayi - Kinshasa route. (Oct 2013)
Kalahari Airways (Botswana) under its “old Botswana hand” CEO Denis Coghlan has jumbo ambitions . It is planning an early 2014 Durban-Gaborone-London start-up with ex Qantas B747-400s and later intends to extend its reach to the USA and Hong Kong. The position of its AOC is unclear. (Oct 2013)
Malawi Airlines . Ethiopian Airlines, the 49% shareholder in this Air Malawi replacement anticipated the start of flying in Sep/Oct 2013 pending full regulatory approvals. Its key destinations are Johannesburg, Dar es Salaam, Harare, Lusaka and Nairobi. The initial fleet consists of a single B737-800,and one Dash 8 Q400 both leased from Ethiopian . The problem of solo aircraft and the problems caused by any unserviceability dogged Air Malawi for years. Hopefully the fleet will be fattened up to 3 aircraft of each type both to impart some resilience and to give the operation some critical mass with more destinations and more frequencies.
Cross border flights to Beira, Tete and Maputo in Mozambique are already planned for January 2014. Tete and Maputo are new but there have at times been scheduled flights on the Beira route. Domestically the key Lilongwe-Blantyre route needs at least 3 consistently timed flights six days a week. One might suffice late on Sunday afternoons.
On the management side, Ethiopian Airlines has appointed Kassim Geressu as CEO. The operational start-up, now targeted for this month continues to be dependent on AOC award by the Malawi CAA ,itself undergoing upgrading following a recent ICAO audit. (Oct 2013)
Proflight (Zambia) launched 3 weekly J41 services between Lusaka and Dar es Salaam on 23rd October . They have now returned their 737-200 to the lessors and will concentrate on smaller aircraft , mainly J41s,for the time being.(Oct 2013)
SAA , always looking for a bigger role within Africa but never yet being able to quite achieve it ,is again thinking about a West African hub in a “by 2016” timescale. It is a dream of many, but where and how? SA Express talked of the same sort of thing earlier this year announced a similar ambition but the question remains the same. Dakar is said to be a lead contender but as we have previously pointed out,its only real use is as a collecting and distribution point for flights across the Atlantic. Perched on the extremity of the continent’s western seaboard it is too far west to be an intra-West Africa hub. Undaunted by that and perhaps with the US business dominating its thinking, the South African government has already pledged help in establishing an MRO at the new airport. This might involve SA Technics .
Now embarked on its latest turnaround plan,”Gaining Altitude” the airline which is receiving US $600 to help it on its way/ bail it out is as part of of its route rationalisation , will in March 2014 drop its Buenos Aires and Sao Paulo routes .Why wait though ? The best thing to do would be to drop these points immediately rather than continue to pointlessly spill money for several more months. Elsewhere the dead hand of government involvement as the the sole shareholder continues. It has insisted on the retention of loss-making Beijing flights. Again we have been clear about the answer to this before, -“You want it, you pay for it” . Who though is going to have the personal courage to say that? There is a lot of unemployment in South Africa, even amongst CEOs. There continue also to be statements about more concentration on intra-African routes but the reality has been the addition of the odd flight here and another there. Nothing bold, ground breaking or really new. Disappointing .(Nov 2013)
Skywise (S Africa) has deferred its startup date, originally last September . The process of aquiring an AOC is taking longer than expected, but then that’s hardly unexpected for a new carrier.(Oct 2013)
TAAG of Angola has added a second weekly Luanda – Beijing service (Oct 2013)
WEST AFRICA
Aero As described in our opening paragraphs above, Aero , formerly in the ascendancy then seemingly sidelined , seems to be on the political up again .It is now expected to be announced as the new national carrier, Nigerian Eagle, but in Nigeria nothing is certain until it’s certain,- and not always even then. Aero is 60% owned by government’s Asset Management Co (AMCON) and 40% the Ibru family. The government intends to sell down its share. Hugh Fraser whose career includes a period at Kenya Airways , a place of relatively high turnover of expatriates, and subsequent African roles with the Aga Khan Foundation, has recently been appointed as CEO. A single 737-500 has been repainted in the new green and white livery. (Oct 2013)
Africa World Airlines (Ghana) is a newcomer which is now operating domestic services to Tamale, Kumasi and the port of Takoradi with 2 E145s on “peppercorn leases” . There is no sign yet of Accra-Lagos services which were at one time due to start in November or to Abuja and Freetown which were slated for a month later.
Founded by wealthy Ghanaian entrepreneur Togbe Afede this carrier breaks new ground in Africa by being the latest extension to the span of Chinese involvement in the continent’s infrastructure and mineral resources. A major minority share is held by China’s HNA group which also owns Hainan Air and Hong Kong Airlines .Several of its senior managers are on loan from Hainan Airlines. Another minority shareholder is Ghana’s state Soocial Security and National Insurance Trust. The overall plan is for the 50 seater EMB 145s with their very limited hold space and cramped cabins to be replaced with 737s or A320s and the route network to be expanded within 5 years to cover to cover Abijan, Abuja, Banjul,Port Harcourt, Conakry,Entebbe (notably not Nairobi), Harare, Johannesburg,Lusaka,Luanda, and Ouagadougo. There have been reports of a possible long haul extension to Brazil before the 2014 World Cup but hopefully they are not mesmerised by that one. Major world sporting events are notorious for exciting dreams of wealth for anything that flies or offers beds. The reality in nearly every case has been intense disappointment thanks to numbers not meeting expectations , erratic and unbalanced flows and hotels simply pricing themselves out of business.
(Oct/Nov 2013)
Air Cote d’Ivoire is strengthening its critical mass by adding a third, this time owned , A319 to the 2 leased from Air France and for domestic services ordering 2 Q400s with options on 2 more (Nov 2013)
Arik Air is expecting December delivery of the first of 3 ordered CRJ1000s. The previously ordered 2 B747-8’s have now been converted to 2 B777-300ERs for 2016 delivery along with with 7 B787-9s following on behind in 2017-9. Up to 15 Bombardier CS300s are seen as possible replacement for the B737-700 fleet. (Nov2013)
ASKY of Togo is possibly to add a B737-800 , presumably from the Ethiopian stable, to the fleet of 3 737-700s in December (Oct 2013)
Azman Air (Nigeria). This is a Kano based start-up which now has 2 former BMi B737-300s painted in new livery standing in UK. It plans domestic operations but has yet to obtain an AOC (Nov 2013)
Camair-Co. Former Finance Minister Edouard Mfoumou has been appointed as new DG. Matthijs Boertien has been replaced as GM by Frederic Edimo. Current debt: approx US$101m
Meanwhile in newly envigorated persuit of its previously loss making long haul ambitions the company talks of seeking a B777 for almost immediate delivery and a hard-to-get B787 some time in 2014.
Thanks to the search for a 51% strategic investor faltering , the Cameroon airline is looking to Africa specialist Brussels Airlines for a closer commercial relationship. (Oct 2013)
Adding to the company’s possible problems , having now agreed financing , Camair-Co will now receive 2 additional MA60 twin turboprops thus reversing earlier concerns on their unsuitability for codesharing with European carriers. The MA 60 is built by Xian in China. It is an update of the former Xian Y7 with western engines and avionics . The Y7 was in turn is a licensed version of the original Russian Antonov AN-24 which first flew in 1959. The latter was designed to meet the rugged conditions of provincial Russia . It therefore has a very strong landing gear and and heavy structure but is now visibly a relic of a bygone era. It may be fine for UN relief type operations but it is so dated in appearance and and other characteristics that it lacks credibility with international passengers. It also lacks US and EU operating certificates.Most airlines would consider it an asset of last resort. It is though cheap to buy as China is keen to place it wherever they can,- and that largely means Africa.
(Nov2013)
Gambia Bird wet is leasing a from Titan, a successful contract operator , a B757-200 for three times weekly Gatwick – Freetown flights. It joins 2 Germania A319s leased to operate on the Banjul-Barcelona route and on intra West African services.
(Oct 2013)
Senegal Airlines is seeking a government cash injection in exchange for 51% ownership to overcome ‘many difficulties’. Services began in 2011 after the collapse of Air Senegal International. Currently it has 60% private ownership . The fleet comprises 3 A320s and a wet-leased CRJ100.It operates a regional and domestic network. (Oct 2013)
Starbow (Ghana) has put its 3BAe146 up for sale and is evaluating possible replacements. (Oct 2013)
NORTH AFRICA
Afriqiyah launched Tripoli-Paris flights using with leased Tunisair A319 on November 1st (Nov 2013)
Air Algerie has signed an MoU for 3 A330-200s to increase type count to 7. (Nov 2013)
Syphax Airlines has launched routes from Sfax to Istanbul and from Tunis to Benghazi/Tripoli (Oct 2013)
Tunisair started flights between Tunis and Tobruk (Libya) in November. (Oct 2013)
NON-AFRICAN AIRLINES
Air France has designated Africa as ’high potential market’ and from 27th October increased frequencies to Abuja, Port Harcourt, Yaounde, Libreville, Nouakchott and Conakry. Abidjan moved up to 10 per week. (Oct 2013)
Etihad normally in the expansion rather than contration businss has suspended Tripoli operauions due to unspecified security and safety concerns (Nov 2013)
Lufthansa has joined KLM and Jetlink of Kenya in withdrawing services to Khartoum. One problem has been a shortage in Sudan of hard currency. This is blocking remittances of locally ticketed sales .(Nov 2013)
MISCELLANEOUS
Ghana.The government never gives up its aspiration to havea good old fashioned national flag carier and has reconfirmed its intention to re-create one under a PPP arrangement with the state holding 10%. Bids have reportedly been received from 13 potential partners and World Bank funding being sought. They might just hesitate. (Nov 2013)
Kenya Insecurity and terrorism incidents continue to depress tourism arrivals. In 2013 Kenya Airways has cut European capacity by 8% and tourism arrivals are 18% down on 2012 figures. Forward business in the game parks looks about 5% down which may not be a bad result in the circumstances (Nov 2013)
Swaziland The government talks of re-creation of Royal Swazi National Airlines based on unused new Sikhuphe Intl Airport to serve routes other than Manzini-Johannesburg which is profitably served by SwaziAirlink a joint venture betwen the Swazi Government and Airlink of South Africa (Nov 2013)
Zambia’s government is mulling over a cabinet memo on the revival of a national carrier. Advice? Leave well alone. Zambia has been not been doing badly for air connections without one. The market will provide so why pay for it?(Oct 2013)
John Williams
30 November 2013
