African Roundup:    October - November 2018

The Fastjet/Solenta relationship deepens. Solenta now controls Fastjet. A mix of recent financial transactions has resulted in Solenta increasing its shareholding to 54% and its voting share holding has risen to 60%.

Fastjet, since its inception in 2012, has never been far from cash difficulties.  In July this year it feared for its survival beyond the end the end of October followed by a familiar appeal to shareholders. US$10m was secured but a further, more frantic, appeal followed to ensure the continuation of business into 2019. This too was successful with a complex mix of transactions adding USD40m to the equity base. Details of the financial restructuring include Fastjet buying from Solenta the current leased 4x ERJ145s and settlement of various debts and loans.

Fastjet changes have also happened in Tanzania and Zimbabwe.  In October Fastjet announced its withdrawal from Tanzania – its ‘birth country’.  Mounting frustration with the foot-dragging of the TzCAA in granting new route licences and regulatory approvals for ATR72-600 operations was the cause.  But the familiar parrot logo will not disappear: a conditional agreement has been reached with local management to buy the company - for US$1 – and to continue operations under a franchise agreement.    In Zimbabwe Fastjet is exercising its right to acquire the current 51% holding of Zimbabwean interests.  The shares will switch to a new Zimbabwean company under Solenta control.  Approval for increases to Harare-Bulawayo frequencies has recently been secured.

Fastjet and Solenta now believe they are better prepared to weather an entry of a new competitor to their markets or, alternatively, prepared for an aggressive response from existing operators when they launch, next year, into the highly competitive South Africa LCC market.

The sometimes overlooked Horn of Africa is experiencing a burst of operations.  The September peace deal signed between Ethiopia and Eritrea has resulted in Asmara, after a 20 year gap, now seeing daily Ethiopian Airlines B737-800s linking with Addis.  Eritrean Airlines with its single B737-300 also flies the route, 4pw.  Ethiopian has talked of assisting Eritrean to grow including possible investment. Routing some European services to Europe via Asmara is under evaluation subject to 5^th Freedom traffic rights clarification.

In similar vein Air Namibia is looking at new routings via Harare, Luanda or Lagos, again subject to traffic rights.  Subsidies for Frankfurt flights continue as a point of open conflict between Government and carrier.  Air Namibia uplifts are under pressure from the increased presence of foreign operators at Windhoek, eg Qatar Airways and KLM.          

Subsidy conflict between Government and SAA also continues.  Similar to Air Namibia, in a search for revenues, the carrier is looking at routing some long-haul ops via Accra, for example Washington, again subject to 5^th Freedom rights being available.  But Government voices are increasingly hostile.  Public Enterprise Minister Pravin Gordhan has said “perpetually unprofitable long-haul ops will cease – no holy cows”.  And new Finance Minister Tito Mboweni has been forthright in saying “we need think about closing it (SAA) down”. For the moment USD349m is being provided to cover debts maturing up to March next year.

EAST AFRICA

Air Tanzania  After an 8 year banishment re-admission to the IATA Clearing House has been secured, debts have been repaid,    (Oct 2018)

Air Tanzania plans launch of B787 Guangzhou ops from Feb next year. (Nov2018)

Eritrean Airlines Asmara-Addis B737 frequency is to rise to 4pw from 19 Nov. (Nov2018)

Ethiopian Airlines  In November is to re-start to Mogadishu, initially with 3pw, Q400. Regional conflict led to services being halted 41 years ago.  But, Kaduna services are to be withdrawn following poor performance since launch last August.  Not a big surprise although worth trying.(Oct 2018)

Ethiopian Airlines  from December Asmara was to be added to the routing of some existing Addis-Europe flights, including London, but traffic right difficulties have delayed decisions. (Nov 2018)  

Ethiopian Airlines On 1 Dec is to launch Addis-Istanbul-Moscow 3pw ops. Also in Dec is to switch Dublin for Lome on the 3pw Addis-Los Angeles routing.  (Nov2018)

Ethiopian Airlines there are reports of a possible agreement with Nepal Airlines and the establishment of a Kathmandu hub, – its first outside Africa.  (Nov 2018)

Ethiopian Airlines launches Mogadishu 3pw ops and within days ups the frequency to daily. (Nov 2018)

Jambojet (Kenya Airways LCC subsidiary) is to lease an additional 2xQ400 for mid-2019 delivery to boost the fleet from 5 to 7 of the type.  The leasing of a further 2 is being discussed.  (Oct2018) 

Jambojet (Kenya Airways LCC subsidiary) Burundi blocks approval of Bujumbura flights. It is unhappy with the planned turboprop  Q400 equipment.  Kenya Airways continues to fly daily with an E190.  (Oct2018)

Jambojet (Kenya Airways LCC subsidiary) CEO Willem Hondius is to leave the company.  New CEO Allan Kilavuka, currently with General Electric Kenya, is to start in January. (Nov2018)

Sudan Airways as part of an ongoing restructuring exercise staff numbers have fallen from 1600 to 470.   A new operational plan presented to Govt this month by Airbus has resulted in approved funding for new A320s.  (Nov2018)

SOUTH / CENTRAL AFRICA

Air Botswana Has taken delivery of the 1^st of 2x ATR72-600 and mentions a possible new route to Maputo. The aircraft sports a new Air Botswana livery. (Nov 2018)

Air Namibia seeks a capital injection of USD175m-210m to gain profitability.  Frankfurt and Luanda are the two big loss-making routes. A reduction of Frankfurt frequencies would release the second A330 for more profitable deployment.  Evaluation is underway to convert the leased 2x A330s and 4x A319s to ownership to reduce operating costs. New route possibilities are China via Luanda and London via Accra or Lagos.  (Oct2018)

Air Namibia  cancels Harare ops following the impounding of an ERJ145 for 24hrs in an ongoing legal case.  Operations restarted several days later. (Oct 2018)

Air Zimbabwe Grant Thornton, the recently appointed administrator, is searching for potential investors and for someone to lease one of the 2x B767-200s.  Action, via a Creditors Meeting, is seeking to determine the accuracy of the oft-repeated debt of US$320m (Nov2018)

Comair (South Africa) is to move all fleet maintenance offshore to Lufthansa Technic. Poor scheduling performance by current provider SAA Technical has forced the move.  (Oct2018)

Congo Airways (DRC) is to lease 4 aircraft from Ethiopian Airlines; 2x B737-800 plus 2x Q400.  Domestic and regional network and frequency growth is the aim. (Oct 2018)

Congo Airways (DRC) plans Dec launch of Kinshasa-Douala-Cotonou. (Nov 2018)

Ethiopian Airlines Mozambique plans 1 Dec launch of domestics with Q400 and B737 flying under Ethiopian subsidiary ASky flight numbers.  (Oct 2018)

Fastjet (PLC) “Withdraws funding” from Tanzania effectively signalling the end of operations in the loss-making country.  CEO Nico Bezeidenhout cites the rejection of domestic new route applications and the continuing wait for ATR72-600 operational approvals as the cause. In July shareholders provided an additional US$10m to enable operations to continue to the end of the year. A further need for additional capital will however arise at end-October “to enable Fastjet to continue to operate”.  An operating loss of US$14.6m was reported for the 2018 first half.  (Oct 2018)

Fastjet (PLC) raises a further US$40m from shareholders. Payback day receeds. From this total major shareholder Solenta increases its voting-share holding to 60.2% and sells to Fastjet the currently leased 4 ERJ145s. Solenta now takes control of Fastjet.  (Nov2018)

Fastjet (PLC) additional aircraft will be acquired for the anticipated launch of South African operations next year. Federal Air, using its own AOC, will be the operator under a brand licencing agreement. (Nov2018)

Fastjet (Tanzania) a provisional agreement has been reached with Tanzanian management to purchase, for US$1, and relaunch the company as an independent franchisee.   The 3 ATR72-600 acquired for Tanzanian operations will be early-returned to the lessor. (Nov 2018)

SAA is to receive US$349m from Government to cover debts maturing up to March next year. Most domestic and regional ops are now profitable. Public Enterprises Minister, Pravin Gordhan, recognizes this but says persistently loss-making long-haul ops will cease – ‘no holy cows’. Before year-end SAA and SA Express are to present plans for further integration . A decision is awaited on the proposed merger of the 2 carriers. (Nov2018)

SAA Finance Minister Tito Mboweni says the airline, despite recent progress, is still failing to generate sufficient cash to service debts making it impossible to attract an equity partner. “We need to think carefully about closing it down”, he added. (Nov2018)

SA Express is to receive US$83m from Govt. The application was for US$123m. (Nov2018)

SA Express plans to have the full fleet of 21 aircraft re-certified and operational in January following the withdrawal of their AOC and other approvals in May.  Network changes will focus on routes that “almost guarantee commercial returns” (Nov2018)

TAAG in a fleet replacement/modernization plan looks to add 6x Q400 plus other medium-haul aircraft in 2019 plus several B787s. They will see service from the near-complete new Luanda Airport.  The current fleet is 5x B737-700 plus 8x B777-200/300.  (Oct2018)

TAAG (Angola) On 29 Oct launched Luanda-Brazzaville-Kinshasa B737-700 ops and plans imminent launch of Luanda-Lagos services, also B737.  (Nov 2018)

Zimbabwe Airlines   anti-corruption regulators launch an investigation into the acquisition of 4 ex-Malaysian Airlines B777s and 3 ERJ145s  (Oct2018)

Zimbabwe Airlines one B777-200ER has been reclaimed by owners, Jet West (USA) due monies not paid.  Govt questions Zimbabwe Airlines’ ownership in relation to proposed merger with Air Zimbabwe (Nov2018)

WEST AFRICA

Africa World Airlines (Ghana) majority shareholder HNA Group of China has started to sell its entire portfolio of overseas aviation holdings as it struggles with onerous debt.  No mention yet of the effect on the AWA holding.  (Nov2018)

Air Burkina has taken delivery of its first leased Emb195.  A second plus an Emb170 will follow before end-January next year.  (Nov 2018)

Air Peace (Nigeria) orders 10x B737-Max 8s and plans Lagos-Dubai and Sharjah ops before year-end.  Aircraft number 5 of a planned 6x ERJ145 fleet is received. (Oct 2018)

Air Peace (Nigeria) selects Asaba, Delta State, to be its new base.  (Oct 2018)

Air Senegal receives of the first of two A319s ordered earlier this year.  Expansion of regional ops is the objective. Abidjan, Cotonou and Praia are named.  (Nov2018)

Air Senegal plans for a January launch of Dakar-Paris ops using the first of 2x A330-300neo currently on order.  (Nov2018)

ASKY (Togo) eff this month expanded Q400 ops to include Bamako, Conakry, Dakar and Banjul.  Current fleet, all leased from shareholder Ethiopian Airlines, 6x B737-700-800 plus 2x Q400.  (Oct2018)

Camair-Co considers increasing the fleet to meet extra demand next year.  Cameroon is to host the football 2019 African Cup of Nations to be played in June/July. (Nov2018)

Guinea Airlines further to the MoU signed with Ethiopian earlier this year operations are planned to start before this year-end.  A likely leased Q400 from Ethiopian will first fly domestic routes.  Ethiopian is to provide comprehensive support. Privately-owned carrier.  (Oct2018)

Overland Airways (Nigeria) domestic carrier launches regional ops to Cotonou and Niamey with 9 strong fleet of ATR42/72 and Beech 1900Ds. (Oct 2018)

RoyalFly-GH (Ghana) privately-owned start-up, born out of the ashes, including the AOC, of Fly540 Ghana in 2015, plans a 1Q2019 launch of domestic and regional ops. (Oct 2018)

NORTH AFRICA

Air Arabia Maroc (Morocco) plans June 2019 launch of Tangier-Lyons ops (Oct2018)

Royal Air Maroc has operated its last B747 flight. All 4 of the type have gone. (Oct2018)

Royal Air Maroc plans new route from Casablanca to Abuja next March. (Nov2018)

Royal Air Maroc orders an ATR72-600 to raise the fleet to 6.  Delivery next month. (Nov2018)

NON-AFRICAN AIRLINES

British Airways after a gap of nearly 10 years has returned to Durban with a 3pw B787-8 schedule operating overnight southbound , returning as daylight flights northbound.

 It has also added 4 weekly B788s to its twice daily (nightly) A 380 services. The new flights return northbound as early morning daylight departures at 0740/50  arriving at Heathrow 1715/25. Unlike Emirates first hubbing to the world departure at 0925 this allows for no same day feed at the Johannesburg end, although it offers clear very early morning roads to the airport for local traffic. It does though give a wide range of UK domestic, European and a couple of USA  connections at the London end.

Brussels Airlines , ever the Africa specialist, plans Jan 2019 increase Banjul frequencies from 4pw to daily. Plus, from April, Accra and Lome frequencies will rise to daily plus Monrovia and Freetown to 5pw.(Oct2018)

KLM switches to the B787-10 for its long-running Amsterdam – Kilimanjaro - Dar es Salaam route.  (Oct 2018)

Turkish Airlines plans to launch to Abidjan in April 2019 with B737-800s  (Oct 2018)

MISCELLANEOUS

Botswana in a positive move joins the growing list of countries granting visa on arrival for all AU citizens.  (Nov2018)

Ethiopia plans are being drawn up for a new airport to serve Addis Ababa, 48kms distant.  (Oct2018)

Ethiopia grants all AU citizens visa-on-arrival entry recognizing the growing volumes and value of inter-regional travel.  Rwanda does likewise.  (Nov2018)

Ghana Accra’s Kotoka Intl Airport’s new USD275m Terminal 3 has opened.  ACSA, South Africa, has a 5yr Technical and Operations Agreement. (Oct 2018)

Ghana the process of establishing a new national carrier is “far advanced” with Ethiopian, Air Mauritius and SAA among others each bidding to be the strategic partner. A partner decision is due in Dec. Securing FAA Cat1 status enabling direct Ghana-USA flights is a priority (Nov2018)

Guinea, Sierra Leone and Liberia governments have signed MoU to create a regional carrier to be called Air Mano.  No start date announced.  (Oct 2018)

Libya President decrees a 183% surcharge on dollar payment for air tickets. (Nov2018)

Namibia Windhoek’s Hosea Kutako Airport terminal is to undergo a US$17m upgrade with completion late next year.  (Nov2018)

Zimbabwe Govt commits to pay US$4m per month to carriers with blocked funds. The total withheld: US$150m. (Oct 2018)

John Williams

November 2019