The good news is that as ever in Africa there is hope. Despite all the images, Africa lives on it. The even better news is that in aviation, often the most progressive and exciting industry in any country, there is some realisation of it and things are getting better.
We are talking here of the Yamousoukro Declaration (YD) and its implimentation. 25 years ago 40 African nations signed up to the YD aimed at boosting the continent’s air services through cooperation and integration between carriers. Passengers would benefit from more services linking more cities, carriers would see revenues increase and the continent as a whole would see more widespread economic development with all its social benefits. Automatic fifth freedom rights were on offer on often poorly served city pairs.
But it didn’t quite work out that way. Today’s 54 nations vary from the giants, eg South Africa to the minnows, eg Malawi. They were never all going to see eye to eye. Fears of unfair competition quickly surfaced and defensive positions were adopted. These might have helped struggling national carriers,- although in reality they didn’t and they damaged tourism and business far more than the protecting the airlines (‘twas ever thus ,worldwide, not just in Africa) ever gained. Where protection of a national carrier was the goal there were 101 bureaucratic ways of delaying the entry of a perceived predator.
Almost unnoticed though, the benefits continue to trickle through. Some carriers spotted them quickly and built network and revenue growth, and did it profitably. Kenya Airways and Ethiopian are well practiced in opening new destinations by tagging them on to an existing routing and utilising the 5th freedom revenue opportunity then on offer. West Africa , where air service development has been much less coherent than on the eastern side of the continent, has seen more implimentation of the YD than has been visible on the east. The Gulf bretheren have been gaining 5th freedom rights too and exercise them enthusiastically. Fast growing Turkish has though said that it isn’t interested in these topup sectors and prefers nonstop services to all its destinations using smaller narrow bodies on most.
Further YD implementation has benefited from the slowly spreading liberalisation tendencies of many national governments. Malawi is an example with Kenya Airways recently being granted rights between Lilongwe and Lusaka. Camair-co, in West Africa has achieved local rights on Lagos-Cotonou and Brazzaville-Kinshasa. Most dramatic is the Lusaka-Harare link with 6 African airlines now operating. Passengers, carriers and national economies all benefit.
The liberalising tendency continues in other ways. The Ethiopian Government has announced its intention to relax the current restriction of 40% foreign ownership. To all governments the possible inflow of investment coupled with increased access to international skills and expertise would be significant benefits.
Against this background of things moving in Africa the current IATA reorganisation which will see African affairs being handled by the Amman, Jordan, office is puzzling.
In sub Saharan Africa only Accra and Lagos, which have historically had Syrian/Lebanese populations, have direct air services from Jordan. Does this not say something? Surely one of the continent’s 54 nations would provide a more logical home? There is a business adage that the likely success of an overseas subsidiary declines proportionately with its distance from Head Office. The inverse is true for the usefulness of a Head Office. How many African CEOs will feel that the move really reflects a serious IATA interest in the continent? Will many/any really go literally out of their way and put up with hanging around for connections in the Gulf , Egypt or Turkey (doesn’t that say something?) to visit Amman regularly, if at all, to maintain essential working contacts? To be effective a regional HQ has to be in the region. Despite all the courtesies, Fly-in visitors don’t gain,-and are not given,- the same level of involvement or influence.
We can understand the theoretical cost reductions for the IATA machine but if the organisation is now going to be seen as out of Africa it will simply be ignored as irrelevant. Scope for a rethink here.
Real Low Cost Operations struggle to evolve in Africa. They only really exist on the golden triangle,–Johannesburg, Cape Town and Durban,– where demand offers a chance of success, even if not ultimately a high one. SkyWise will shortly challenge SAA low cost subsidiary Mango in this market. FastJet, based in Europe, believes the European LCC business model can be successfully transferred, more or less un-adjusted, to pan-African markets. They too will shortly join the fray in South Africa whilst struggling to establish their presence in East Africa, a surprising dilution of energies at this stage of their efforts to really get profitably airborne. Kenya Airways remains unconvinced that LCC business success can be achieved in the region and appears to have at least delayed the launch of Jambo jet which they announced two years ago. The time and investment required may well look just not worth the candle compared to putting the time and money into their mainline operation and simply getting smarter with their pricing by pre-remaindering in advance what are forecast to be surplus seats at low prices, just as most European and other majors do .
Kenya Airways ‘ previous toe in the low cost water, Flamingo struggled to really divorce itself from its parent’s cost base and never had the resources, or even apparent plan, to expand into a jet or even a bigger turboprop operation. It was hobbled by the choice of the Saab 340 , a rarity in Africa, as its aircraft type, a standalone reservations system which limited distribution even by Kenya Airways and the lack of along term aim. As result, and partly because an alternative vehicle became available, Kenya Airways’ turboprop focus switched to the purchase of Tanzania’s PrecisionAir. Ethiopian remains totally unconvinced, with no LCC plans. West Africa has no ‘true’ LCC although several carriers use the jargon for marketing purposes. It is possible that one, or several, of these will develop into a sub-Equator Ryan Air but the the area remains very fluid and subject to political and other problems at any time.
1. EAST AFRICA
Air Burundi is planning a June relaunch of MA60 services between Bujumbura and Kigali (May 2013)
Air Tanzania, our familiar party cake candle ,keeps coming alive again and on 8 Feb resumed 4 weekly Dar es Salaam to Mtwara services with a Dash 8-300. On 2 March it re-launched 3 weekly Moroni services with with the leased veteran B737-200 (Apr 2013)
Eritrean Airlines has returned the A319 to the lessor. The leased A320 maintains the Rome service as the locally registered B767 is included in the EU ban. (Apr 2013)
Ethiopian Airlines continues a high level of activity with the 787s back in the air and another 2 777-300 ERs to be leased from mid 2015. Regionally it is considering the re-instatement of Mogadishu services.
Networkwise the airline has stated its intention to follow its Asky, Lome, model by creating a new airline and hub in Zambia, plus one in either Brazzaville or Kinshasa and maybe a west coast USA hub though the latter is more difficult to envisage. Direct services to Brasil via Maputo or other points are being evaluated as rights for these have now been obtained.
Recent passenger reports express dissatisfaction with facilities and comfort for transfer /transit at Addis’ airport and as the fleet grows this achilles heel will become a real problem unless urgently attended to. As we have reported consistently, the same of course goes for Nairobi’s Jomo Kenyatta International. (May 2013)
FastJet . The head gets dizzy with trying to follow the goings on and non goings on here.
Rather precociously presenting itself as something new to Africa,- which a true European low cost type airline would be,- it still doesn’t look as if all the ideas, plans, hopes are coming together in the form of an identifiable unified entity flying all over Africa by linking together a series franchises held together by a strong core. Even its auditors, KPMG, have taken the unusual step of some public head scratching about its longer term viability.This has produced an immediate strong and confident rebuttal of doubts by the airline.
It does to be trying to do a lot in different places all at once as if opportunities, unless grabbed immediately,- were going to go away. It has done this rather than consolidating its position in one place, developing visible critical mass and income and then moving on to the next. Hence current operations in Tanzania are under the fastjet banner and in Angola and Ghana as fly540. It is not clear when it is intended to rebrand them all as unmistakeable fastjet and to bury the Fly540 brand as was understood to be the intention. The impression is of a lot of money being spent on everything from leasing and flying the aircraft to paying for the rights to the new and previously unknown brand itself. Having bought fly540 why not retain that brand and pay nobody anything for the use of it?
In the proposed South African venture, the original opportunistic plan to fast track a way in to the country by buying the failed 1 Time (S Africa) has given way to a new proposal proposal involving what are seen as powerful political figures including one of President Zuma’s sons . The golden Capetown- Durban-Johannesburg would be the prime objective although it doesn't seem to link with anything the company is doing or trying to do elsewhere. Fastjet South Africa would be a joint venture and franchise with Blockbuster,-which would be renamed Fastjet Holdings,- Fastjet seemingly holding 25% of the equity. The CEO would be Kyle Haywood.
Why do this we wonder and go head to head with existing well established and very determined competitors when much of the continent is much less well served? It appears that the (contested) South Africa regulatory approvals can be obtained and the initial operations would be with a B737-300 provided by Starcargo, flown under Federal Air’s AOC. Approval for the ariline’s own (leased) A319 would then be sought.
Meanwhile back in the first operating territory, Tanzania, apparent tensions between local staff and Europe-based management have resulted in the Operations Director appearing in court accused of the ‘use of abusive language’, not an unusual thing in some airlines’ HQ’s but a novelty in court.
Commercially/Operationally just as the Tanzanian network seemed to be developing with new links, the Kilimanjaro to Mwanza and to Zanzibar services lasted 4 weeks. The Kilimanjaro to Mwanza had looked theoretically hopeful as the road option has always been very poor /almost non existent due to the fact that to do anything about it would mean cutting right across the Serengeti National Park and its game viewing and animal migration routes. The impact on Tanzania’s high yielding tourism business could be devastating. Historically that problem may also be why there isn’t much of a market between the two areas. Thanks to the Serengeti being a wedge between the two very different areas there simply haven’t been the family and trading ties on which to base one.
In Kenya the company has had a legal spat with Fly540 CEO Don Smith. This has now been apparently resolved in an out of court settlement.
Networkwise it is planned to start a weekly Dar es Salaam to Victoria Falls flight in July. With no real African market for it likely, this has to be aimed at overseas tourists/tour groups. That’s OK but isn’t in line with what might be expected of a low cost, high volume,high frequency operation. Nice and hopefully profitable to do but it looks incremental to rather than part of the target core business,- and it isn’t providing that critical mass.
Plenty is happening in and around this company. We look forward to being able to report further developments in or before our next roundup.
Stop Press: FastJet’s owners, Lonrho have been taken over by a Swiss company set up to invest in infrastructure, FS Africa. As result, David Lenigas, formerly of Lonrho has left the Chairmanship. This has now been taken over for the time being by Ed Winter, who with everything else going on, can’t have been swamped with spare hours in the day. A new Chairman is being sought.
Inter Îles Air (Comoros) is starting services with a Saab340 from Mutsamudu to Dar es Salaam and Mozambique. See above for our comments regarding this aircraft when operated by Kenya Flamingo in the early 2000s. Although a nice aircraft it is a rarity in Africa.(May 2013)
Kenya Airways, one of many airlines for whom the first delayed 787 delivery can not arrive soon enough continues to do the best it can on its long haul services with its existing 777/767 fleets. Guangzhou via Dubai frequencies are increasing from four weekly to daily.
Meanwhile in a notable development of its cargo business it has taken delivery of the first of four B737-300 freighter conversions. These aircraft, for use as regional freighters, came from its passenger fleet in which they are being replaced by smaller, more fuel efficient Embraers. The downside of the Embraers is their inability to carry more than minimal cargo, or even at times all the passenger baggage on routes where trader traffic is heavy. The airline has had a mixed history with its cargo operations. A decade ago when standalone subsidiaries were seen as the way to go for cargo, domestic passenger and ground services, the joint venture with KLM and Martinair, labelled Kencargo didn’t work out as hoped and seemed to benefit the other parties more than Kenya Airways. Now the airline is to operate a less complicated joint venture Boeing 747-400F with KLM/Air France (who own the aircraft) on the Guangzhou-Nairobi route and that should be easier to make work. Its accounting should certainly be simpler. Cargo subsidiaries which involve at least in theory buying hold space in the carrier's passenger aircraft tend to complicate the accounting of both themselves and the parent company and at best are a source of frequent interdepartmental wrangling.
Low cost Jambo Jet remains unlaunched although its business plan is being updated and will be submited for Board approval. It looks like remaining unlaunched for a while longer,-maybe for ever.
Blantyre, the Malawian commercial capital denuded of all international air services in 1977s to force airlines to operate to the then new and shiny airport at Lilongwe, is slowly going online again, if not to the world at least to regional points from which the greater globe may be accessed. As part of that process, the Malawi Government has usefully given Kenya Airways rights to operate to the city. As the main runway, with its interesting aircraft carrier style gradients at the easten end, is only 100 ft wide, it won’t take widebodies or anything whose engines would overhang the tar. That means it won’t accommodate anything wider than B737s and the A320 series narrowbodies. (See more on Blantyre airport in Section 6 below)
Kenya Airways has also gained 5th freedom rights between Lilongwe and Lusaka. These will usefully add to 3 weekly ATR flights by (New) Air Malawi and 3 J 41s by Proflight Commuter.
Finally, to follow the new code-sharing with Etihad, Kenya Airways plans to launch three B767-300 services weekly to Abu Dhabi from July. These are in addition to ten weekly flights to Dubai. Presumably this will mean some further shuffling of 767 and 737 flying as the 787s will not arrive this year.(May 2013)
Rwandair has ordered a new Dash 8-400NG. They already lease a Dash 8-200 and are taking delivery of the first of 2 new B737-700NGs that will enable B737-500 to be retired. They also have two CRJ-900NGs.
Expanding north westwards ,Accra and Douala join the network in July and then comes a north eastern spoke to Juba. Profitability is aimed for in 2015. (May 2013)
2. SOUTH / CENTRAL AFRICA
Air Botswana has dropped its Capetown to Gaborone route and cut Capetown to Maun (for the high yielding Okavango Delta tourist market) frequencies from 4 to 2 weekly.These routes opened in June 2012 (Apr2013)
Air Namibia is extending its 4 weekly Windhoek-Harare ERJ135 services to Lusaka but was to drop the four times weekly Windhoek- Gaborone flights in May despite them being capitals of adjacent countries and theer being no other air link between them. Thi is another example of the fragmented and haphazard nature of African route maps and the fragility of links between cities which do not have historic family, business or trading relationships. Going back to narrative above, this may be something that European owned newcomer FastJet has yet to learn and understand?
Meanwhile the airline’s “financial strain” has forced attempts to renegotiate the leases of the 2 A330s due to replace the 2 A340s on expiry of their leases. (Apr 2013)
Air Zimbabwe’s ‘forensic audit’ initiated by the new Chairman continues. 5 Senior Managers have been placed on involuntary leave as part of reductions to the 965 headcount.
On a more optimistic note, Airliner World reports that the airline’s first A320 which has been in storage at Johannesburg has now been test flown in the airline’s colours. Its appearance to start work at Harare would give the airline a welcome morale boost and hopefully it would not be taken out of scheduled service too often to act as a Presidential transport, a problem which has bedevilled Air Zimbabwe’s other fleets –especially the two stalwart 767-200s ,- and reputation for many years.(Apr 2013)
CAA (Compagnie Africaine d’Aviation). This Kinshasa-based operator is adding a 6th A320 (Apr 2013)
Makuba Airlines (Zambia) Privately owned Makabu is planning domestic LCC , by which it means turboprop, operations a with ATR 42/72 fleet. An Air Transport Licence has been secured and an Air Operators Certificate is now being sought.(Apr 2013)
Proflight (Zambia) was awarded its AOC in November 2012 and, as also reported above was planning a May start to thrice weekly flights from Lusaka to Lilongwe and, separately,Lumumbashi with a J41 to be upgraded later to a South African registered B737-200 which has now been delivered and is currently operating domestic flights to Ndola and Livingstone (for Victoria Falls) (Apr 2013)
SAA, Africa’s longest standing big airline ,continues to face big problems. A new restructuring plan to cover the next 20 years was presented to Governmennt on 2nd April. They might take the view that something of more immediate impact would be more appropriate especially as it comes with an unwelcome invoice to add to previous ones. To tide the company over until government comes up with new funds, the company is seeking and interim $160 million from local banks so as to maintain operations. No doubt the banks will be only too pleased to help but they might want it guaranteed by Government, who at the same time are being asked for $60 million to meet debt covenants.
Amongst issues covered in the plan are focus on governance and accountability. Details of all the proposals have yet to be published.
In the meantime the company has a new CEO, externally recruited, Monwabisi Kalawe. He is described by South Africa’s Mail and Guardian as “ a seasoned corporate leader” . He has come to a good job for obtaining more seasoning . Hopefully he will be given time to at least arrange his family photos on his desk.
On the external front the airline has signed an MoU with Etihad for the creation of a ‘strategic partnership’ including codeshare and the ‘exploration of synergy and efficiency opportunities’ . That could mean almost anything. An infusion of Etihad’s excellent and disciplined customer service ethos would be a useful inclusion.(May2013)
On the cago side of the business, the airline is wet leasing a B747-400F adding to its small freighter fleet of B737-200Fs.
Mango ,SAA’s low cost subsidiary has started weekly Johannesburg-Zanzibar B738 services. (Apr 2013)
SkyWise, another South African entrant , has its AOC application is underway and is aiming for a September launch on, yes, the hotly contested Capetown–Johannesburg route with 2 leased B737-300s. Pricing is to be 20% lower than current LCC market. That’s if the current incumbents/combatants, no slouches in the arts and sciences of competition, don’t at least selectively reduce their fares. (May 2013)
3. WEST AFRICA
Aero strike action by two Unions forced the suspension of operations for a while. ‘Unpaid salaries/poor conditions’ were cited as the cause of the unrest. All staff, except licence holders, were then fired. New staff, under new contracts were recruited. NCAA formally grounded the airline but relented in mid April allowing resumption of ‘skeletal’ operations. Agreement with Unions was eventually achieved after the 20 day stoppage and the full scheule was restored. The controversial HR Manager is now spending more time with his family. (Apr 2013)
Once back on its feet, the airline expanded its regional network to include the useful hop across the corner of the Bight of Benin to French speaking Douala (May 2013)
Air Cote d’Ivoire A third A319 is to join the fleet. Unlike the other two which are leased from Air France ,this one will be owned (Apr 2013)
AG Air (Chad), a new carrier, has taken delivery of a leased B737-300. This aircraft type, victim of falling lease rates, is becoming the new-200 in Africa as the -200s become ever older and more costly to maintain. Given new interiors the passengers are unable to differentiate between them and the more recent and much more expensive NG models. (May 2013)
Arik Air is planning Lagos –Sao Paulo services within 3 months. It is an interesting move which may need support from business feeding in to Lagos. The snag with that though is that Lagos is not set up as an international to international airside transfer airport, nor are essentials like visa requirements and general facilitation. Those things compound the airport’s unfortunate reputation for hassles and corruption which make it known and even feared as a place foreigners, particularly nationals of other African states, go to great lengths to avoid. (May 2013)
ASKY, Ethiopian’s West African joint venture, has announced plans to fly to Luanda with Johannesburg and Europe to follow in 2014-5 (May 2013)
Camair-Co of Cameroon is adding Abidjan to the network on 4th June. This fattens up frequency on a route currently flown 4 times weekly by Air Cote d’Ivoire’s A 319s and 4 times weekly by B738s of Air Senegal .(Apr 2013)
Dana Air, under something of a cloud since its MD 83 flight 992 from Abuja to Lagos on 3rd June 2012 crashed on final approach to Lagos Airport causing 153 fatalities, had its AOC revoked by the Nigerian Federal Government. Three days later it resumed limited services but an MD83 remained grounded pending re-certification by Boeing. (Apr 2013)
Douniah Airlines ,a new Mali carrier, plans a May start-up with a ATR72. The network is intended to cover Bamako, Conakry, Cotonou, Dakar, Libreville, Lagos and Malabo (Apr 2013)
Leone Airways (Sierra Leone) in partnership with Arik, is planning a June launch initially from Freetown to Gatwick. Arik aircraft and crews will be employed. (Apr2013)
Mauritania Airlines. The lifting of its EU ban has enabled the start of operations to Las Palmas, Canary Islands (May 2013)
SkyBird (Nigeria). This charter operator has been awarded an AOC and is taking delivery of its 3rd of 3 refurbished Dornier Do328s (May 2013)
TACV (Cape Verde) plans to launch a weekly B738 flight Ilha do Sol – Marseilles – Paris in July (Apr2013)
United Nigeria Airlines is a new commercial carrier started by the Nigerian Air Force, an organisation not previously in the customer service business. A B737-500 has been acquired and painted and additional B737s are to follow. (April 2013)
4. NORTH AFRICA
Air Algerie plans a December start for A330 services to Johannesburg and to add Sao Paulo to the network in February (May2013)
Egyptair is dropping its long standing Tokyo and Osaka routes as it battles USD800m post-turmoil losses. It has flown to Tokyo since its 1960s Comet 4C days.(Apr 2013)
Royal Air Maroc. The Government is hinting at a possible 44% sale to an un-named Gulf carrier. Another one for Etihad? (Oct 2012)
The airline itself is to revive 5 B737-500s currently parked. The additional capacity is likely to be worth more to them than anything they would get from selling this smallest -200 sized 737 variant which has little value on the used market. It is also reviving its Casablanca – Las Palmas route shortly.(Dec 2012)
Syphax Airlines is planning an IPO to finance 85% its growth plan for 2013-17 (May 2013)
5. NON-AFRICAN AIRLINES
Air France from mid June is adding three A340-300 frequencies to its daily 777-300 Paris–Abidjan ,taking it to a total of ten weekly, competing with three weekly higher density Corsair A 330 services as well as raising the barriers to entry to further competitors.(Apr13)
Fly Dubai the Dubai LCC operator added Juba to its network in April adding to its already extensive coverage of the area. Its B737-800 fleet also flies to Addis Ababa, Khartoum, Pt Sudan and Djibouti. (Apr 2013)
Qatar Airways will, after the European summer season drop its daily A 320 Seychelles services in September. This probably acknowledges that it isn’t worth competing against the Etihad/Air Seychelles combined operation and Emirates 12 weekly A340-500s. It isn’t a strategically important route and is easily replaceable in the airline’s portfolio.
Royal Jordanian, based in IATA’s new capital for Africa (see above) is launching twice weekly Amman –Lagos-Accra A330 services in June. (May 2013)
Turkish Airlines, seemingly adding new destinations almost weekly , has gained rights into Kano and from May has increased Istanbul - Lagos and Dar es Salaam flights to daily. In July it will boost Istanbul - Cairo frequencies to thrice daily, the ideal for all big 6th freedom players. Once they offer a morning, afternoon and night option from anywhere competing with them becomes very difficult.
In the short term, Turkish's business may take a hit from the current images of civil unrest in Istanbul which may become seen as a place to avoid. People are seldom aware of an airport's position in relation to any trouble and tend to play it safe.
(June 2013)
6. MISCELLANEOUS
Angola The traditionally cautious and protectionist government is considering frequency increase requests from RAM, Ethiopian and Emirates. Will it break away from dropping its suffocating protection of unprofitable and uncompetitive TAAG which it owns? The country overall would benefit substantially if it did. (Apr2013)
Egypt is finalizing plans for a USD20bn new ‘Airport City’ for Cairo. Alexandria and Port Said developments also included in its plans(Apr2013)
Ethiopia is aiming to relax foreign ownership rules to enable up to 40% overseas investment in Ethiopian Airlines. (Apr 2013)
Ghana’s Ministry of Transport has accused Nigeria of denying rights to Ghanaian operators contrary to Yamousoukro Decision principles. (Apr 2013)
The Malawi Government has announced its intention to develop a new airport for the country’s commercial capital ,Blantyre. Its current site at Chileka, 9 miles from the city centre, is hampered by high ground immediately to its south and a large hill , Chiradzulu, to the east. While neither impedes normal operations, they pose problems on days of low visibility when mists (Chiperonis) roll in with little warning. Uneven ground also makes Chileka difficult and results in less than ideal runway gradients. The 100ft wide runway is also limiting although that could be remedied easily enough. Until Blantyre was replaced by the new Lilongwe airport in 1977 as Malawi’s international gateway this runway limited long haul competition to Air Malawi , BA and East African’s VC10s as any aircraft whose engines would overhang the side of the runway (eg 707, DC 8) was banned.
Ideally work would start this year but that looks like a highly optimisitic aim (Apr 2013)
South Sudan’s government signed a deal with AtlasJet (Turkey) to create a regional carrier. However this looks like coming to nought as AtlasJet has subsequently withdrawn. (Apr 2013)
John Williams -June 2013
