Just how long will it take before the 787 produces good news for its
African operators ? Both Ethiopian and Kenya Airways have already suffered more
than 3 years of delayed deliveries. Ethiopian
was starting to smile having taken delivery of 4 whilst Kenya Airways remains
in the queue for its first aircraft. And
now … regulators have grounded the worldwide fleet.
The Turks are coming,- everywhere .Turkish Airlines is currently
driving the pace of African network expansion by non-African carriers. With the addition of Kilimanjaro and Mombasa and now Libreville, Gabon the airline now serves 34 of its targeted 50 destinations
in Africa . It already outpoints its foreign rivals other than on intra-African
trafffic which the Turks say is too
difficult to capacity manage and in which they therefore have no interest. It
is growing the hub synergies by doing the same everywhere else as well. For example Edinburgh is joining their UK
network. Ever heard of Aalborg in northern Denmark? Turkish have and are in
there. Secondary destinations are well covered and very much their territory.
Now the tertiaries are also appearing on the route maps.
As an Africa based carrier, Kenya Airways takes a very different view
of 5th freedom rights within
it and as result provides a number of useful and incrementally profitable city pairs
particularly on the western side of the continent.
Ethiopian continues to strengthen its influence in African markets
beyond simply providing frequency. Encouraged
by the success of its West African subsidiary ASky of Lome, Togo, it is eyeing
both Zambia and Malawi as opportunities.
It continues as a major bidder for control of Air Malawi ,- including
the imminent launch of Blantyre operations - and is deep in discussion with the
Government of Zambia for the creation of a new joint-venture national carrier.
Neither Ethiopian nor Kenya Airways can ‘out-fleet’ Emirates, Qatar and Turkish
but they can exploit their unrivalled local market knowledge and experience and
by using the smaller EMB 170/190 series make money where widebodies fear to
tread.
The growing choice of routings north and east out of Africa is
beginning to generate casualties amongst the European legacy brethern. In contrast to the newcomers they are in
retreat . In recent weeks Virgin has withdrawn from Nairobi and KLM from
Kano. Ethiopian is about to reduce
frequencies to Paris, Brussels and Milan and British Airways is shortly to
withdraw from Dar es Salaam and to reduce frequency to Entebbe. See more below.
Fastjet continues to be a fascinating game to watch and the story
changes by the day. Allegedly inbound and outbound law suits are flying about
and the company doesn’t seem yet to have blended with the African landscape.
There is a myth sometimes held that African warriors survive by their ability
to slay full grown wild animals with one thrust of a spear. This actually isn’t
true. The spear is usually the last resort. Survival and advancement is much
more often achieved by blending in with the background and not attracting or at
least circumventing the unhelpful attention of predators in the first place.
Regardless of all that , Fastjet has chalked up an impressive start to
its Low Cost operations between Dar es Salaam, Mwanza and Kilimanjaro – nearly
30,000 passengers and 80% load factors were achieved in the first month. Yields
though look low and once the airline has got the passengers hooked from the
competing surface alternatives it will presumably seek to force the average
upward.
That it is facing unexpected challenges is not too difficult to
spot. Dar es Salaam was never mentioned
as the launch operating base but somehow it replaced the original choices of
Accra or Nairobi. Becoming involved with Fly540 as the source for AOCs has
produced unwanted legal action by FLY540 creditors, the latest arising from
Uganda. Its action to secure an
Operating Licence in South Africa has uncovered a presumably unexpected,
requirement for licence holders to have 75% local shareholding. Then there are
understandable hostile objections from SAA, Mango and Comair. All this diverts management time and effort
from the equally challenging task of developing a profitable new business based
initially on USD20 one-way fares.
Here’s a competitors’ dilemma.
So far the competing, 49% Kenya Airways owned Precision Air, appears to be
trying to ride out the storm by not adjusting its prices. Brave and tough when
that means being undercut by a factor of 10 so where should they go from here
to avoid losing their current domestic
Tanzania dominance ? In round terms FastJet’s fare to Mwanza is USD20 while
Precison Air’s current lowest fare is 10 times as high at USD220. Cutting by 50% would need 100% volume growth
to maintain total revenue ,– and the fare would still be 5 times higher than
Fastjet flying an A319 against your new ATR72.
Or should Precision just sit tight gambling that Fastjet will go away or
find a better use for its aircraft? Whatever Precision’s decision ,pain is
inevitable.
See more on Fastjet below.
EAST AFRICA
Air Tanzania: Good news
stories are rare for this airline. Another bad news one is that following
protracted maintenance the Dash8-300 returned to service only for a cracked
windscreen to ground the aircraft at
Kigoma on the inaugural flight. (Jan 2013)
Air Uganda has achieved
IOSA renewal and launched a CRJ200 ‘premium economy class’ (Jan 2013)
Ethiopian Airlines dropped
Bangui from the network and in March is launching Addis-N’dola flights as part
of the current Lubumbashi routing routing with B737-700 (Dec 2012)
Ethiopian Airlines. Malawi is a long
country north to south but narrow east to west. When it became independent in
1964 large scale business was concentrated in Blantyre in the south and
government in Zomba, just 50 milesaway.
The visionary President Banda sought to establish a more even spread of
activity by building a new capital city for government at Lilongwe, some 200
miles further north. He also ordered the building of a new and more modern
international airport there. Airlines showed little interest in it so he forced
their hand by banning all international flights from all other airports
including Blantyre , the business centre of the country. This has been eroded
to a very small extent, but the Lilongwe first policy has strangled Malawi’s
position in central African aviation for the past 40 years.
Thanks no doubt to Malawi’s pragmatic new President , Joyce Banda,
Blantyre with its narrow 100ft wide runway, appears to be available to more
international operators again. As result, Ethiopian is to introduce
Addis-Lilongwe-Blantyre-Addis services with B737-800s. The runway width bars
aircraft with engines further outboard so widebodies can not be employed. That rules out Emirates but there could be
opportunities for Turkish , Etihad and Qatar in particular.(Jan 2013)
Ethiopian Airlines , now dogged
by the FAA grounding of its 4 recently delivered and well received B787s ,is
retiming its 6 weekly B767-300ER services on the Addis-Lome- Rio-Sao Paulo route until to Jun
2013 pending granting of slot times friendly to ASKY feed connections in Lome. It is also planning to reduce capacity to
Paris and Brussells via Rome by substituting 767s with 757s on some summer 2013
services. (Jan 2013)
FastJet is never far from the news as its African
grey parrot ( a species native to west rather than east, central or southern
Africa) liveried aircraft take to the air. The airline’s first task is to
assemble its multi-base portfolio. Although South Africa was not announced as
one of its prime targets, the demise of domestic low cost carrier 1 Time
presented it with an opportunity to secure a base and AOC in the country via an
option agreement to purchase 100% of liquidated 1Time shares. South Africa’s airline market is very different to
those north of the Limpopo. Well run, well liked ,low cost/low fare airlines
with their own customer bases and strong followings are already part of the
landscape so another one is going to have to fight to wrest market share from
them rather than create an entirely new one. None of the existing players is
going to move over to make room for a newcomer so the fight to break in and
then stay there will be tough.
As Fastjet is a foreign company, South African government approval would
be required for the takeover of 1Time and there are likely to be strong
objections from SAA/Mango and Comair/Kulula. This is a frequent problem
experienced by parrots. People try to clip their wings and put them in cages.
It was hoped to get 1Time back
into the air, presumably in Fastjet guise, on 28th January but this appears to
have slipped to 1st March . Initially 3 existing 1Time MD83s would
be employed before replacement with A319s
Next up for the Dar es Salaam base are meant to be flights to Nairobi,
Entebbe, Johannesburg and the Comores . No dates have yet been announced.(Jan2013)
Kenya Airways has signed a ‘Cooperation Agreement ‘ withRwandair including cargo, maintenance
and crew training development (Dec 2012)
Kenya Airways is putting a tentative
toe into the northern Zambia market with a single weekly Nairobi-Ndola E190
service from March 2013 . This bypass of
Lusaka by an international service should sell well and an increase in
frequencies is likely to follow before long. The airline has recently taken
delivery of the 6th of 10 E190s it has on order. (Jan 2013)
On the industrial
relations front a Nairobi court has ordered the immediate reinstatement of some
450 retrenched staff. The airline has appealed against the ruling which could
seriously affect the ability of any Kenyan company to trim its workforce but
has in the meantime out those affected back on the payroll. Messy. While possibly
good news to existing employees , the inability to trim the workforce would be
very bad news for possible future employees as it would discourage the airline
from adding more than the absolute minimum. (Jan 2013)
Massawa Airways (Eritrea)This start-up carrier has taken delivery of new
Avic MA60. Its cusomers must be less fussy than those of Air Zimbabwe. (see
below).(Dec 2012)
Precision
Air on 16th January
launched 4 weekly Dar es Salaam – Mbeya services using the recently upgraded Songa Airport . Their
domestic network is more comprehensive than anything Tanzania has seen since
the demise of East African Airways. Nationally it would be worrying if their
viablity were undermined on key routes such as Dar es Salaam to Mwanza and
Kilimanjaro by FastJet’s extremely low fares.(Dec 2012)
Rwandair has leased a Dash 8-100 from ALS, Nairobi.
(Jan 2013)
SOUTH / CENTRAL AFRICA
1Time The liquidator is seekinh an
extension for final liquidation until February presumably to allow Fastjet
talks to continue (Dec 2012)
Afric Aviation (Gabon), a private operatorhas
added an ATR72-200 to its single ATR42-300. The company plans network expansion
to Brazzaville, Pointe Noire and Luanda (Jan 2013)
Air Cemac (Congo Brazaville) is planning to launch in January. Air France-KLM holds a 34% share. (Dec 2012)
Air
Namibia has cut its flagship Windhoek-Frankfurt route from 7 to 5 flights a
week. It continues to tack up operating
losses and fuel supplier, Engen Namibia,
is tightening the screw There are hints of lack of confidence between Minister
of Transport and carrier’s MD. Meanwhile
the company has taken delivery of 2 A319s from Airbus bringing its total of the
type to 4. (Jan 2013)
Air Zimbabwe has
renewed itsGDS Worldspan contract. An IOSA inspection was scheduled for 17 December (Dec 2012)Air Zimbabwe is leasing a B767-200 from InterAir of South Africa to operate Harare- Johannesburg. The company has ceased MA60 operations due to ‘customer dissatisfaction’. No surprises there. (Jan 2013)
Air Zimbabwe, ever confident ,is talking of Lagos and Accra services from March 2013 as well as reviving the London route (Jan 2013)
Fly Congo and CAA (both DRC)
have formed an alliance with view of eventual merger. Their combined fleet totals 11 aircraft including
3 A320s and 1 B767-200. Domestic routes and
and international services to Johannesburg and Entebbe are planned. Interesting
in this is the reminder that Entebbe, so long overshadowed by Nairobi, is
gradually building more useful links into adjacent countries and is a good uncluttered
connecting airport to these for long haul international passengers. (Jan 2013)
LAM is planning to add 2 EMB145s to its fleet
shortly. (Jan 2013)
SAA has received a USD64mn ‘bank facility’ from the
long suffering governmemt to meet
outstanding fuel bills. SAA Board has
delayed its submission to the government of the demanded ‘Turnround Strategy’
from 15 Dec 2012 to March 2013 (Jan 2013)
SkyWise (South
Africa)is another South African proposed startup proposed by Rodney James and
other founders of collapsed , 1Time. A
launch by the end of March was the aim ,
using 2 737-300s between Capetown and
Johannesburg . The money is reportedly from Dubai and local BEE investors. The aquisition of an Air Service License though isn’t going smoothly and it has
reportedly been rejected by the Licencing Council (Jan 2013)
WEST AFRICA
Air
Cote d’Ivoire is to lease an E170 from 15% shareholder Air France from January (Dec 2012)
Air
Mali has suspended all services due
national unrest .(Dec2 012)
ASKY is adding
twice weekly Lome-Bamako-Dakar B737-700
services and twice weekly Lagos-Abijan with Q400s
(Dec 2012)
Camair-Co of Cameroon has had an eventful 2 months. It
was suspended from IATA Clearing House due to unpaid settlements but nevertheless is considering the acquisition
of 3Embraers or Bombardier C Series. COO MatthijsBoertien has been appointed
CEO. As the previous CEO Alex van Elk’s contract was not renewed in July 2012.
(Jan 2013)
Chanchangi(Nigeria) is
flying again after a single B737-300 returned from maintenance (Dec 2012)
Cronus
Airlines (Eq Guinea) is wet leasing an MD87 adding to its 2 BAe146s fleet. (Dec 2012)
Dana Air (Nigeria)
has had its AOC renewed and services resumed on 4th January using 5 MD83s. This follows
the June 2012 MD83 crash on aproach to Lagos airport.(Dec 2012)
Med-View Airlines (Nigeria) has
been granted an AOC and on 8th November 2012 started scheduled
domestic ops with 4x B737-400/800 linking LOS/ABV/PHC plus Yola and Owerri
(Jan13)
Starbow has added a fourth BAe146-200and now has
Ghana’s largest fleet (Dec 2012)
Toumai Air Chad is planning
to restart flying using wet-leased B737-300.
Its own AOC has been suspended (Jan 2013)
Westair Benin (Benin) has
added a leased B737-400 to its CRJ200 and plans network expansion from Cotonou
to 12 regional points. (Jan 2013)
NORTH AFRICA
EgyptAir has defered a decision
on 49% purchase in grounded CTK Aviation
Ghana.Maybe it thinks the Ghana skies are getting a but crowded with new
operators? (Dec 2012)
Egyptair Group :EgyptairAir
Express is to be liquidated and its staff and 12 E170s are to be integrated into mainline Egyptair.Its
domestic network unprofitable since its 2006 formation. Here is another example of a legacy airline
trying to reduce cost via a separate low cost subsidiary and finding that in
reality it is very difficult to shake off all the costs of its parent.(Dec 2012)
Egyptair,an airline
with a long history in eastern Africa stretching back to Comet 4Cs in the early
1960s is to resume services to Harare via Dar es Salaam in June .
Elsewhere it will join the increasing number of airlines attacking the
UK by bypassing Heathrow by launching
five weekly Cairo – Manchester B737-800 services. This aircraft is proving
very useful to a number of carriers in opening hub-busting/bypassing services
at a lower capital expense/ownership cost than would be involved in buying an
addtional 40 or so seats with the smallest widebodies (A330-200 and B787-800).
There was a belief in the 1970s and 80s that a narrow body would be
increasingly unsaleable on sectors above 4 hours. That is increasingly being disproved on
direct routes between primary and secondary or between two secondary
points. Passengers are showing
increasing preference for a smaller and possibly less comfortable aircraft if
using them means they can avoid the larger transfer points which are often an
obstacle course than a pleasure. See also item on Nairobi Airport under Turkish
Airlines below.(Jan 2013)
Libyan Wings is planning to launch scheduled services out of Tripoli during 2013.
No target date is specified.(Jan 2013)
Royal Air Maroc plans to
revive 5 B737-500s currently parked. It
also aims to resume of Casablanca – Las Palmas flights in April 2013 (Dec 2012)
Syphax
Airlines (Tunisia) eff Apr2013 to introduction 1stof two A330. It
has also signed a deal for 10 A320s (Jan 2013)
Tunisair islooking
for a 1,700 staff cut and African
network increrase from 4 to 16 points in search for profitability. Competitive
pressure will intensify with the imminent EU open-skies deal. (Jan 2013)
NON – AFRICAN AIRLINES
Binter Canarias (Gran
Canaria) launched Banjul services with an Air Nostrum CRJ200 on 11th
January. The airline also serves Marrakech, Agadir, Casablanca, Praia and as
well as Laayoune in Westen Sahara. (Jan
2013)
IAG/British Airways. Having , with a few
gaps, been in Dar es Salaam since at least 1947 when it operated with Solent
flying boats , BA is to withdraw services at the end of March . Lack of
profitability is given as the reason. At the same time Entebbe will drop from 5
weekly services to a less attractive 3, a move which could be self eliminating
.Uncompetitive frequency has been one of the airline’s problems in Dar es
Salaam where it faced daily KLM and Emirates, twice daily Ethiopian and Qatar
Airways and five weekly Swiss flights as well as Kenya Airways’ high frequency
links to the world via Nairobi.
Apart from poor
frequencies and increases by competitors, especially the Gulf duo ,other
contributors to BA’s woes will include perceived variable cabin service and an
unremarkable on board product compared particularly to the Gulf airlines, its
relatively poor personal sales contact in the UK and its lack of a visible
overall geographical route strategy. The final nail in the route’s coffin may
well be that the ownership costs of the new 787s which will progressively
replace the 767 are higher than those of the well written down and virtually
unique Rolls Royce powered 767s. BA and
its new owner IAG are very focused on individual route profitabilty and other
factors are , for all kinds of very good short term financial reasons, very
much secondary to that . In the long
term however the decison to further
shrink the network may not be so well advised.(Jan 2013)
IAG/Iberia Bearing in mind the last sentence of the previous paragraph it is no surprise that
Iberia’s ‘Transformation Plan’ calls for
concentration on profitable routes. Driven by this, frequency increases are to
include Casablanca, Dakar, Algiers, Nouakchott and Malabo while services to
Cairo will cease. (Dec 2012)
KLM is also trimming and adjusting its African
network and will withdraw from Khartoum and Addis Ababa . Here Ethiopian and
the Gulf airlines are making big inroads to points east while traffic from
Khartoum to Europe is reduced thanks to a combination of politics and economics
and the independence of the south of the country from the north. (Jan 2012)
Ryanair is expanding
its presence in North Africa by opening 2 new bases in Morocco: Fez with a
single aircraft and Marrakech with two. (Jan 2013)
Turkish
Airlines . While the legacy high cost European carriers shrink in
Africa, the relentless onward march by Turkish continues. In December
Kilimanjaro and Mombasa, and were added,
the latter bypassing the hassle of
domestic to international connections at Nairobi where in particular a
nocturnal walk amongst the traffic with a recalcitrant baggage trolley
along the poorly lit roadway between the
two “units”,between the domestic and international units is no fun at all.
Battling through the throng outside to get back into the building via the first
of several security checks before actually boarding is not for the feint
hearted or those in a hurry either .
Elswheer on the Turkish network, thrice weekly services to
Libreville via Douala commenced in January.
Unlike the Europeans but like the Gulf airlines, Turkish has
a very definate geographical strategy and sees the multiplicty of points served
in an area as key to its overall competitive position and ultimately
profitabilty. Their target is 50 points in Africa. They have now 33. BA will
have less than 10. Turkish’s CEO Kotil, says says that unlike Ethiopian, Kenya
Airways , SAA and Emirates they are not interested in incremental jam on the cake intra-Africa
traffic. For one thing capacity management of these usually shortish sectors is
just too complicated and getting it
wrong risks long haul business to and from Istanbul and beyond. (Dec 2012)
MISCELLANEOUS
AFRAA’s Joint fuel-buying agreement now includes 13
carriers. 2013 volume negotiations are underway for 1 million litres of JetA1;
up by 50%. Kenya Airways quotes US$2 of
savings in 2012. AFRAA negotiates with
suppliers on a pooled volume basis; carriers contract individually. (Jan13)
Comoros There are new government talks
of resurrecting Air Comores which last ceased operating in 1997 . The airline
has been around a long time and in the late 1960s was operating Nord 262
turboprops as far as Dar es Salaam. The crew roundtripped via lunch on the
ground in Dar where a bottle of Coast Lager or IPA was part of the day out (Jan
2013)
European Commission has removed
Mauritania from the Ban List. Eritrea
has taken its place. (Dec 2012)
Kenya US FAA Cat1
status has moved a step nearer with the
signing into law of the new 2013 Civil Aviation Act (Jan 2013)
Malawi Min of
Transport has said that the rehabilitation of Blantyre and Lilongwe airports is imminent. Unfortunately in a display of
old fashioned priories, t he refurbishment of Lilongwe’s VVIP terminal has so
far taken priority (Dec 2012)
Malawi Government is
mulling the creation of a Malawi Aiports Authority separating airports
management from the CAA’s safety and regulatory responsibility (Jan 2013)
Nigeria Not one of
the nation’s 22 airports, including Lagos, is ICAO certified . Few pilots in
particular would be surprised.(Dec 2012)
Togo: The new
terminal building at Lome Airport is
nearing completion. It is funded by USD150million from China’s Exim Bank and unsurprisingly is
therefore being built by a Chinese construction contract. A new airport is planned for 2020 (Jan 2013)
John Williams,
29 January 2013.
