First a bright spot. Malawian Airlines is a new joint venture between the Government of Malawi, Ethiopian Airlines and private Malawian investors. It came into being during July. Bankrupt Air Malawi is no more. We have followed the death throes of the latter for a long time while its sole shareholder and bavkroller, the Government of Malawi, has vainly kept it on life-support .Trickles or sudden bursts of of cash have occured when creditors turned really hostile and more time was expensively bought. Nobody benefitted and the nation’s economic growth which badly needed the money for other things was held back. Crucially, passengers lost confidence. It took the refreshing new President, Joyce Banda, to stop the waste of money, to put a ‘For Sale’ sign on the presidential jet and to call for improved air services for the country. Her government negotiators have now delivered.
49% shareholder Ethiopian Airlines is well equipped to develop Malawian Airlines into an efficient and, in time, profitable operation. The experience of establishing new carrier ASky Airlines of Togo, in 2010, encouraged the move into Malawi as did the need to avoid domiantion of the region by its 2 serious rivals, SAA and Kenya Airways. Such ground-breaking has ubiquitous problems and difficulties, – political, regulatory, cultural and social ,– but Ethiopian has the benefit of wide experience gained in Africa since its February 1946 first flight. It is also seen as less politically contentious than either of it rivals. Ethiopia doesn’t try to dominate anyone beyond its borders. Originally, much to the angst of the British who controlled neighbouring East Africa and Sudan, America’s TWA provided managerial and technical assistance with which the airline quickly developed a wide domestic and regional presence. Unhindered by decades of colonial legacy, its focus was on “Bringing Africa Together”, not in providing links to Paris or London. Although there had been previous limited and low frequency services across Africa from the 1930s and more serious operations by Pan American and East African from the and its successor from the 1960s ,the scope of Ethiopian’s trans-Africa routes were not seriously challenged before Kenya Airways started to seriously challenge them from around 2000. Self-management and self-sufficiency were early priorities. The ever-expanding technical and training facilities at Addis Ababa, plus a multi-licence MRO facility, are some of the outcomes.
Ethiopian talks further of new carriers for Zambia and DRC with Uganda and Tanzania also mentioned . These are all countries with defunct national carriers. “The establishment of multiple hubs in Africa is an overarching strategy of our Vision 2025,” says CEO Tewolde Gebremariam. It’s an interesting business model. The strategy appears to be controlled smothering of regional competitors or at least seriously inhibiting their room to breathe. This is no newcomer’s whirlwind dash to secure share in multiple markets. Ethiopian stands on solid ground backed by nearly 70 years of sustained growth on a challenging continent.
Aviation is nothing if not dynamic across the continent. Change is a constant. Whilst Ethiopian plans for business success in Malawi, other established carriers are suddenly showing unexpected cash difficulties. Precision Air of Tanzania is the latest to join the list. Privately owned and with Kenya Airways as 41% shareholder the spectre of a USD4m black hole has appeared. The new CEO has looked towards the Government for financial support but the prospect of a second aviation orphan alongside Air Tanzania is unlikely to prompt the opening of the Treasury wallet. Kenya Airways will be seen as a possible source , or at least the finder of one. It is surprising that they have not seen this coming and taken avoiding action. Recently fastJet’s cut to the bone fares will have affected some of Precisionair’s revenue especially as they appeared not to react but that can only be a part of the problem.
Atlantic Star Airlines of the UK sees a business opportunity in planning B757-200 operations to St Helena, remote in the South Atlantic. The rocky island’s first airport will open in 2016. It’s not an obvious mass market destination although it may well have a high yield niche attraction. With a 1650m runway and being 1700 miles from Cape Town and 800 from the nearest alternate, Ascension Island, the operating challenges are obvious. The very small population, numbering just 4,200 and hotel rooms totalling maybe a few over thirty suggest that revenue targets wil be challenging.
Air France has trumpeted A380 operations to Abidjan in 2014 . British Airways will join Air France and Lufthansa by putting the aircraft into Johannesburg in February .Could there be another A380 operator in the stack? Air Zimbabwe, perhaps? A Zimbabwe Government spokesman has announced good progress in acquisition talks about aquiring one. No doubt the country’s newly democratically re-elected President would see this as an appropriate aircraft for his Presidential travels even if this does mean leaving rather more people stranded than if he just went off for a few days taking one of the airline’s two 767-200s as at present. We and Zimbabwe’s travellers and intending travellers will see ……
1. EAST AFRICA
Air Tanzania’s fightback saw the June 1st launch of thrice weekly Dash 8 Dar es Salaam-Tabora-Kigoma services. The interest by Omani investors in pledging USD100m to support the airline has fizzled out (Jun2013)
· Air Ugandahas received its 3rd CRJ200 and retired its last fuel-slurping MD87. On 8 July launched a three times weekly Entebbe – Mogadishu service thereby adding to its “Avoid Nairobi” network. Like any hubs, the more spokes are added , the more such webs increase their attraction (Jul 2013)
Ethiopian Airlines . As noted above, the airline is out and about increasing its reach and power around the continent by confirming its intention to follow its Asky, Lome, and Malawian Airlines models by creating a new airline and hub in Zambia, a new hub Kinshasa and maybe a west coast USA hub. “The establishment of multiple hubs in Africa is an overarching strategy of our Vision 2025,” says CEO Tewolde Gebremariam. They are determined not to let fastJet grass grow under their feet.
In order to keep its long term growth dynamism growing , the airline is looking to buy or lease a further 6 B787s for 2017-8 delivery .
Right now , it launched 4 weekly B787 services to Seoul on 18th June and on 1 July launched weekly B787 services to Sao Paulo and Rio via Lome. It is also evaluating direct flights from Maputo to Brazil . Ethiopian’s- and Africa’s- links with the world are increasing rapidly (Jul2013)
FastJet . Seldom a dull moment with this one as it fights to shake off restrictions, obstacles, frustrations, resistance to non African entrants to the regional markets . All sorts of feet out to thwart its ambitions and signal “Not so fast’Jet” . Its July launch of a weekly Dar es Salaam – Victoria Falls service remains its immediate international objective and breaks it out of its tanzanian dometic straitjacket but the big one will be the planned and now cleared start of Dar-Johannesburg flights on September 27th.
The airline has put ‘on hold’ any launch of domestic South African operations. That makes sense. South Africa, with its keenly and competantly contested market was never part of its original plans and threatened to become a heavy distraction. Refocusing north of the Limpopo is entirely right. Nigeria is the new centre of attraction via a proposed partnership with local AOC holder Red1 Airways. FastJet Nigeria will be formed with FastJet as minor shareholder and with a management contract, for which finding the right people will be an interesting challenge. The new entity will also pay fastJet a brand licence fee. (Jun13)
Other international right have been secured from Tanzania to South Africa, Rwanda and Zambia and a Foreign Operator Permit has been obtained from from South Africa’s Department of Transport. FastJet further reports that 38% of its current passengers are first-time flyers. That is not surprising in view of some of the rock bottom pricing on someTanzanian domestic flights, aimed of course to get the (Jun 2013)
Jubba Airways (Kenya), a sister company of Jubba Airways of Somalia has added a B737-300 to its fleet of 2 B737-200a and a The 737-300 is fast becoming the new -200 as the vehicle of choice for new entrants and secondary or tertiary services as the cheap to buy but costly to fly and maintain -200s run out of sustainable hours.
Kenya Airways, along with SAA and Ethiopian one of sub saharan Africa’s Big Three (It is difficult to see who might become a 4th or 5th ) , anticipates an order for 4 B737-7/800s to replace B737-300s which are being converted to regional freighters.The 2020 passenger fleet vision is 107 aircraft, including 32 B787s, 29 B737s and 31 E190s. The E190 is becoming the principle regional aircraft where a high quality jet operation is required for new and/or thinner routes or where the capacity/frequency tradeoff favours frequency.
A good example of the Embraers’ versatile and cost effective usefulness is Botswana . Here on the one hand the aircraft is enabling a frequency increase to 5 weekly to Gaberone and on the other it is enabling Kenya Airways to consider flying to Maun and Francistown giving these two places their first links to the world northwards via Nairobi rather than southwards via Johannesburg. Hitherto these towns have been almost exclusively bound to the Johannesburg and SAA’s hub. The arrival of Kenya Airways will be seen by SAA as an incursion into their territory and will not be welcome. To add a bit more insult to the injury, Kenya Airways is also now tagging Livingstone onto 3 of its 14 weekly Nairobi-Harare services. (Jun 2013)
Financially the airline,consistently profitable since privatisation, hit a less good patch in 2012-3 and reports a loss of USD91.2m against a profit of USD18.7m the previous year. The European routes showed a 20% fall in passenger numbers due to the recession, Euro-woes,security concerns and adverse travel advisories. Opinions about on board service may also be a factor. The return to profitability is targeted for 2014-5
In West Africa the airline is fretting about its inability so far to find a suitable partner with whom to build a hub and a stronger presence. Ethiopian were far more proactive in getting Asky up and running while Kenya Airways looked at Cameroon Airlines which is saddled with heavy Cameroon government intervention including what is pretty much a directive to fly long haul to Paris in competition with Air France. That’s a pretty good guarantee of a financial drain. (July 2013)
Precision Air has plunged into public financial turmoil. New (seconded from 49% shareholder Kenya Airways ) CEO Sauda Rajab has looked into the books and discovered a possible USD4m black hole . That’s rather a lot of money to be suddenly found not to be in the bank .Unsurprisingly she talks of need for ‘injection of funds’. The B737 fleet has been grounded although details remain unclear. Amongst other things the airline must have been affected by Fastjet’s very low entry prices on its Tanzanian domestic routes. (Jul 2013)
Rwandair has ordered a new Dash 8-400NG. It already leases a Dash 8-200 and is taking delivery of 2 B737-700NGs to join the 2 B737-800. The smaller B737-500s have now been retired . On 1st June the airline started 5 weekly B738 flights to Accra as an extension from Lagos. It has local rights between the two cities. Douala and Juba launches are scheduled to follow and the airline hopes to become profitable in 2015-16. (June 2013)
2. SOUTH / CENTRAL AFRICA
Air Cemac (Congo Brazaville) The launch is again in jeopardy as USD20m start-up capital is said to be exhausted. Talks with 34% shareholder Air France – KLM are reported to be making no progress. They are presumably concerned at the lack of anything tangible for their money. Government backed rival Air Congo International has received MA60 for domestic routes. (Jun 2013)
Air Malawi The government Minister of Transport announced the 11 July signing of the share sale agreement with Ethiopian Airlines as 49% shareholder. The new airline will be named Malawian Airlines. Ethiopian anticipates start of services in September or October pending full regulatory approvals. Key destinations are to be Johannesburg, Dar es Salaam, Harare, Lusaka and Nairobi and the initial fleet a B737-800, and a Dash 8 Q400.
Air Nambia’s 2 new leased A330-200s will arrive in September and October. In the meantime A319 frequencies between Windhoek and Luanda will increase to daily with A319s (Jul 2013)
Air Zimbabwe is leasing (with a view to acquiring) an EMB145 from Solenta, S Africa. The beleagured airline has reduced most of its fares by up to 60% to rebuild market share. The persuit of essential cost savings has seen 600 staff are placed ‘on leave’ while 307 remain.All is not gloomy though as IOSA re-certification has been gained after a 9 month gap. (Jun 2013)
Comair has arranged finance for 4 new B737-800 to fly under the BA franchise colours. This is in addition to the 4 for Kulula (Jun 2013)
Korongo Airlines (DRC) is plannig for and additional B737 and an unspecified 50 seat turboprop. Their CEO reports ‘tough first year of operations’ due to high taxes on fuel and poor national infrastructure (Jun2013)
LAM is planning new routes in 2014 from Nampula and Tete to Blantyre and Lilongwe (Jun2013)
Proflight (Zambia) was awarded its AOC last November 20 and on 4th June started thrice weely Lusaka –Lilongwe and Lusaka- Lubumbashi flights with J41 upgrading toa B737 in July. (Jun 2013)
SAA which has struggled with its long haul fleet for some time is planning a renewal. A mix of of 25-30 B787s and A350s likely with deliveries starting in 2017, still 4 years away. Its short haul renewal is under way already with the first of 20 new A320s arriving to replaced B 737-800s. (Jul 2013)
SAA Express is another aspirant to start a West African hub with a local partner, ideally in 2014 . It is also seeking to replace its current CRJs with 80-90 seaters in 2015-6 (Jun 2013)
SAA Low cost/low fare subsidiary, Mango, is leasing 2 737-800s and planning to double the 737-800 fleet to 15 within 3 years. It has applied for rights to serve Kilimanjaro and Zanzibar , this despite some questions over whether Zanzibar, with its religious sensitivities, can accomodate much further growth of its tourist industry,- or politically will want to. There are other political tensions over the formerly very autonomous island’s 1964 linkup with mainland Tanzania. Ironically at the time one of the big issues was that of increasing Chinese influence,its benfits and disadvantages. The issue beginning to surface throughout eastern and southern Africa as China extends its financial an political networks on the continent. (Jul 2013)
3. WEST AFRICA
Air Niamey (Niger) has received the first of 2 A320-200s for domestic services. The carrier is a ACMI/adhoc charter provider based in Istanbul. Government owned Air Niger collapsed in 1993 (Jun 2013)
Arik Air has ordered 3 CRJ1000NG and 4x Q400NGs from Bombardier for its short haul and domestic network and taken delivery of the first of 4 A330-200s for its longer haul services (Jul 2013)
Camair-Co plans a ‘complete restructuring’ including a bail-out fromits sole shareholder, the Cameroon Govt. It also intends to replace the aging B767 with a leased B777.
The airline has deferred delivery of 3 chinese built MA60s due to their unsuitability for code-sharing with European carriers. These aircraft have an image problem anywhere and many passengers will take great pains to avoid them. They are based on the 1959 Russian An-24 , structurally very robust, mechanically simple but shout old technology. China offers them at prices well below a modern ATR or Dash 8 but they can not compete in the 21st century. As a freighter they can be useful but even there exude an image of aid agency flights and tramp freighting.
The airline’s two B737-700s will be replaced (but not with MA60s) when their leases expire. (Jun 2013)
Hak Air (Nigeria) has joined the country’s fragmented aviation fray by taking delivery of the first of four B737-400 to launch internal services . An AOC has been obtained. The airline has also been designated under the Nigeria/UK bilateral to between Port Harcourt and London Gatwick (Jun 2013)
Punto Azul (Equatorial Guinea) has received the first of 3 wet leased ERJ145s, and started times weekly Malabo – Sao Tome services. Libreville will follow. (Jun 2013)
4. NORTH AFRICA
Air Algerie plans to lease of 2 B747s for the summer peak season and anticipates acquisition of 2 ex Air France/KLM MD-11s for conversion into freighters .K LM is now the only operator of these aircraft in a passenger role. (Jun 2013)
Libyan Airlines . As part of its fleet rebuilding the airline has taken the delivery of the first and second of 3 A330-200s. (Jul 2013)
Royal Air Maroc is planning its return to Sao Paulo and considering introducing a new route to Nairobi ‘before the end of the year’ (Jun 2013)
Syphax Airlines has received the first of two A330-200s. It is also aquiring 10 A320s (Jun 2013)
Tunisair has cancelled its 2008 order for 3 A350-800s (Jun 2013)
5. NON-AFRICAN AIRLINES
Air India is preparing to again re-instate its Nairobi route, this time after 3 year absence. Originally flown with Lockheed Constellations in the 1950s this spoke from Mumbai has had an on and off history. There is a large Kenyan Indian population. (Jun 2013).
See above,-Atlantic Star Airlines (UK) is optimistically planning London – St Helena B757-200 services on completion of the airport construction in 2016. (Jun 2013)
British Airways is to make Johannsburg its third A380 destination after Los Angeles and hong Kong by introducing the A380 on one of its services to Johannesburg, initially thrice weekly. (Jul 2013)
Emirates . After a bit of a pause in its African expansion Emirates will in October add Conakry to its 4 weekly Dubai-Dakar services. (Jul 2013)
Qatar Airways has signed a codeshare with Fly540 Kenya which in turn is scheduled to take on the Fastjet brand. This isn’t exactly a brand match, Qatar and low cost coming from opposite ends of the spectrum. A second daily A320 is nowl operating between Doha and Nairobi (Jun 2013)
Royal Jordanian is in July launching twice weekly A330s 2pw on the Amman-Lagos Accra route. (Jul 2013)
Saudia Airlines will cease its twice wekly Jeddah – Kano B747 flights in September. (Jun2013)
Turkish Airlines was aiming at a July launch to Asmara, Eritrea. So far though the service doesn’t appear in the OAG .
In the meantime in a new activity for this airline, maybe Etihad inspired (for it is their model), they have had tentative talks with the DR Congo government about creating a new national carrier. That will be an interesting challenge.(June 2013)
Virgin Atlantic isn’t proving a great stayer in some African destinations . In September it will add its five weekly Accra flights to its previous Pt Harcourt and Nairobi withdrawals. As with Virgin Nigeria life must have been tougher and more costly than they thought .(June 2013)
6. MISCELLANEOUS
AFRAA and IATA are working jointly on the January 2013 Abuja Declaration that requires all African airlines to be IOSA compliant by the end of 2015, to qualify for an AOC. IATA is providing free courses and AFRAA free training premises. DR Congo and Sudan account for 50% of African accidents (Jun 2013)
Ghana Government signed a MOU with China Airports Construction Corpn for new Accra Airport feasibility last October . This has now been delivered. (Jun 2013)
Malawi Government is as we have previously recommended planning talks with Qatar and Emirates on access to Lilongwe . A link with either or both of these would at a stroke give Malawi one stop access to the world. Even more interesting would be if Qatar with its A320s went into Blanytre and Emirates, who already operate B777 freighters there, into Lilongwe. (Jun 2013)
Malawi Liquidator has optimistically invited interest in Air Malawi’s aged ATR42, and two B737s. (Jun 2013)
Nigeria’s government has announced its intention to create a new national carrier, – Nigeria One – ,by combining the assets of debt-laden domestic carriers including Arik and Aero Contractors. A possible fleet size of 50 has been mentioned. This would including Embraers and Bombardiers plus Boeing aircraft for longer and heavier international rutes. The government would have a 25% shareholding and provide an ‘enabling environment’ . This could be useful/essentail,- or not.(Jul 2013)
Uganda Government has repeated its intention to recreate Uganda Airlines and to carry out a major rehabilitation of Entebbe Airport. (Jul 2013)
John Williams
7 August 2013
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