Note: We
apologise for the late appearance of this regular feature. The February-March
edition will appear on schedule by early April. Normal service is now resumed!
The two
months were unusually quiet for news but business pressures continued for
carriers across the continent. Cash flow
will have been uppermost for many chief executives. The bogeymen of debt
servicing, fuel payments, insurance premiums and IATA Clearing House
settlements are universal; failure to cover just one can ground the
business. On time staff salaries are also
‘must pay’. Sliding too far into any of
these potential swamps is dis-spiriting for all concerned. Drive and energy weakens and business growth
becomes but a dream. CEOs and Finance
Directors spend ever more time searching for financial life-belts. Inevitably a percentage of such businesses
eventually fail. Of the large ones think
Zambia Airways, Air Afrique and Nigeria Airways. Others defying all economic logic continue,-
think Air Tanzania and Air Zimbabwe.
Kenya
Airways and Ethiopian Airlines are not immune to these pressures but both have
developed into progressive and profitable international businesses over the
past 60 years. Although Ethiopian has
100% Government shareholding it operates completely independently. In Kenya Airways Government is a minority
shareholder. Both CEOs have freedom to
operate with a high degree of commercial freedom. Both also have aggressive multi-year growth
plans, including tripling fleet sizes and global network expansion. Senior management and all staff are far from
dis-spirited. Fear would only come from looking down. These airlines know they
have to look forward and upward. That means they can not and must not stop
growing. SAA would dearly like to be
seen in the same category . Much is expected from the 2014 ramped-up
implementation of its latest restructuring plan but we've been there before and the Government is a very hands-on and not entirely helpful owner. Extraordinarily, all long-haul routes are loss-making,
many operating only out of a mistaken idea of national prestige. Capetown-London which should have been making
a mint has been abandoned to BA and Virgin. Other cut-backs are imminent . Understandably Buenos Aires is an early
candidate.
There are
bright spots to look forward to in 2014. The continent is in a continuous state of
flux. ASky of Togo is one of several
carriers to stand out. With 40%
Ethiopian Airlines shareholding operations started in early-2010 with two ET
leased B737-700s and an ET management team.
Since then the West African network has grown to 23 points and the fleet
has expanded to 7 aircraft. It has the appearance of a well-managed operation
with a clear strategy. In addition to regional connectivity it provides feed to
ET transatlantic services routed via Lome.
The new Malawi Airlines could well follow the same positive path. Ethiopian Airlines is again involved, this time
with 49% shareholding and an ET appointed CEO. The single B737-800 and Q400 come from
Ethiopian. The airline has to grow quickly beyond this minimalist fleet which
only replicates that of the now thankfully defunct Air Malawi. Operations have
started .New cross border destinations in Mozambique will help knit the two
adjacent countries together, something always useful in Africa. Ethiopian’s expertise with ASky is now proven.
Can it be repeated in 2014 with Malawi Airlines?
The brightest
spot for 2014 might just be FastJet with its vision of creating a pan-African, high
quality low-cost operation. It just has to find the funds to survive the
prolonged startup phase until it has enough mass and connectivity to really
fly. Based in London with a European/US
business approach and shareholdings it is unlike any other new carrier on the
continent. Operating within Tanzania
since late 2012 and now with new routes to Johannesburg and Lusaka it has taken
the first steps. It needs more and quickly. High load factors are trumpeted as
is passenger satisfaction with the service on its A319s and its quantity of ultra-low
USD20 fares (plus taxes). The buildup is though coming at high cost. Losses of
USD42m are quoted for the first 6 months of 2013 and the share price has taken
a battering dropping from GBP 44.0 pence to 2.7 during 2013. The Board Chairman has been replaced and "new" Lonrho, the original major shareholder and nothing like its Tiny Rowland pan-African big player, has dropped away. It is not a business venture for the
faint-hearted or shallow of pocket but any boardroom tension or doubt is
well-hidden with the company now talking of creating FastJet Zambia, a subsidiary
to be based in Lusaka. It needs strong
nerves and much cash but FastJet could just be the biggest event in African
aviation for many years. The jury
watches with interest while some of its long established competitors sit like
hopeful vultures.
1.
EAST AFRICA
Air Burundi’s start of operations has been delayed awaiting
local certification of its sole MA60 . Even when flying this type of aircraft
is unlikely to have the customers flocking . (Jan 2014).
Ethiopian
Airlines is planning to add to its Far East route portfolio by
launching to Shanghai with B787s in March.It is also nearing placing an order
for 10-20 narrow bodied aircraft. Unsurprisingly for a long term nearly exclusive Boeing operator, it has previously said B737MAX ‘makes more sense’
than A320neo (Jan 2014)
FastJet is planning the creation of
franchised FastJet Zambia and of holding a ‘substantial share’ in the Zambian
registered company with local AOC and Air Service Licence. This comes at a time
when moves are afoot in Zambia to revive the long defunct Zambia Airways, or at
least its name. FastJet is a UK registered company and aims to own of franchise
its name extensively in Africa. Franchised FastJet Tanzania is based in Dar es
Salaam. (Jan 14)
Kenya Airways has, in advance of the first
expected delivery in late March or early April, added the B787 to its Air Service
License. The first of 8 B787-8’s is due in March and will from April 14th
initially be deployed on 2 daily shorthaul
rotations to both Mombasa and Dar es Salaam so to build up crew experience.
Johannesburg will be its first longer haul operation starting 18th
April.(Jan 2014)
Kenya Airways The airlines’ revolving door
of Commercial Directors has now delivered Gerard Clark, ex Hong Kong Airlines
to the seat. CEO, Titus Naikuni, has extended his contract for a further year
and is currently due to retire at the end of this year. His heir apparent is Mbuyi Nkunzi who he recruited from outside the industry as Chief Operating Officer two years ago.(Jan 2014)
Nova Airways (Sudan) has launched six
weekly CRJ200 services between Asmara and Khartoum plus a twice weekly
Asmara-Khartoum-Juba. Its total fleet is
a single B737-500 and, 4 CRJ200ER.s (Dec 2013)
Rwandair’s new Q400 arrival is now scheduled
for now Feb 2014 and the leased Dash8-200 will be returned. (Jan2014)
Rwandair Meanwhile its four times weekly
CRJ900 services to Douala will start 30 March. Abidjan is also planned. (Jan 2014)
2.
SOUTH / CENTRAL AFRICA
1Time (S Africa) this Low Cost Carrier is progressing
towards resumption of flying in March 2014.
The original 1Time filed for liquidation in November 2012. The new
entity involves Global Aviation, holder of an AOC, and PakAfrica, a grouping of
Pakistan and Dubai investors. The first
of 4 planned A320s has arrived in Johannesburg. Whether in the crowded South
African domestic trunk market it can be any more successful against the
dominant weight of SAA and Comair/Kulula remains to be seen (Jan 2014)
Air Zimbabwe talking of issuing a US$50m ‘aero-bond’ in early 2014 to provide working
capital and debt repayment. It will be interesting to see who, if anyone is
interested. China maybe? An external forensic audit has revealed a 4 year US$10m aircraft insurance fraud including periods of operations without cover. (Jan 2014)
Malawi
Airlines
has received its AOC and is to be in the air on 31st January. Ethiopian owns 49% (Jan 2014)
Royal Zimbabwe Airlines This proposed start-up
has secured Harare- Guangzhou traffic rights.
The owner is ex-head of the Zimbabwe CAA. (Jan 2014)
SAA is mulling over a possible 30% stake in
Senegal Airlines in line thoughts about establishing that elusive thing,- a
West African hub. Maybe they haven’t noticed that an airline perched on the
western extremity of the continent is not well placed to provide a regional
hub. Its real potential could though be as a gathering point for departures
across the Atlantic. (Jan 2014)
3.
WEST AFRICA
ASKY plans to
fly to Beiruit in early 2014 ,connecting in Lome with Ethiopian Airlines thrice
weekly codeshare flights to Rio and Sao Paulo.
(Dec2013)
Dana Air resumed services on 27th
January after passing an Nigerian CAA audit.
Flying was suspended by this body in Oct 2013 due to ‘operational
concerns’. (Jan 2014)
Med-View Airlines (Nigeria) is planning to expand into
international services by adding Abijan to Lagos and on to Dubai with
B737-400s. Kano to Jeddah is another aspiration. (Jan2014)
4.
NORTH AFRICA
Acacusair (Libya) is aiming at a 2014 start-up
with two A319-200s (Dec 2013)
Afriqiyah has taken delivery of its latest A330-200. It continues to use wet-leased aircraft for
routes to Europe (Jan 2014)
Egyptair In the face of severe falls in
incoming tourism numbers, the airline is switching its priorities towards
intra-Africa connectivity. There are plans for a big new fleet order by the end
of March (Jan 2014)
Royal Air Maroc is to wet-lease a Sukhoi SSJ100 to
follow 2 wet-leased E190s for extended evaluation prior to a late 2014 planned
acquistion of 12-15 aircraft. Almost certainly the price of the Russian aircraft
will be unbeatable but............ (Jan 2014)
5.
NON-AFRICAN AIRLINES
Qatar Airways is upping its Doha-Khartoum
frequency by 3 to 17 A320s a week. (Jan
2014)
6.
MISCELLANEOUS
East African Community (EAC) Citizens’ passport free travel
between Kenya, Rwanda and Uganda had been agreed with effect from Jan 2104 .
Also agreed was a common visa for visitors. The introduction of these was
subsequently deferred pending procedural clarifications. (Jan 2014)
Kenya’s government has awarded the
contract to a German company for construction of new temporary arrivals
terminal following the Aug 2013 fire. This goes against the recent flow of all
major transport infrastructure contracts including the completely new Kenya
Airways and partners terminal, the Nairobi ring roads and the standard gauge railway
line from Mombasa to Nairobi and ultimately Uganda to Chinese companies using
Chinese finance.(Jan 2014)
Nigeria’s
NCAA completed its audit
of Dana Air and highlighted ‘open items’ for resolution prior to AOC
restoration. As above, this has now happened. A compulsory annual audit of each
AOC holder will now commence. Dana Air was originally suspended following the
June 2012 MD83 crash at Lagos. (Dec 2013)
Nigeria’s Ministry
of Transport audit has found that 5 carriers owe a total US$ 1.2bn to AMCON
(Asset Management Co of Nigeria), – a near doubling of previous estimates (Jan 2014)
Nigeria An Aero B737 has appeared in a
green/white ‘Nigerian Eagle’ livery but the government has made no comment other than a new national
carrier is targeted for this year. Eagles might fly,- or not. (Jan 2014)
Somaliland is exploring the possibility of
Sharjah, UAE, investment in its aviation development (Jan 2014)
Uganda’s government has approved an US$ 175m for Entebbe
airport upgrade . In the past President Museveni has shown great personal
interest in the facility functioning well and looking good.(Dec 2013)
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