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 In recent weeks Virgin has withdrawn from Nairobi and KLM from Kano.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.
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)
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)
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)
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.