Africa,-Up pop the Regulators.

There must have been something in the African water these last few weeks. From Uganda to Namibia there has been a rash of capricious interventions by regulators and ministers, so often a toxic mix anywhere. The predictable results have included turmoil and long faces for operators and passengers alike.

Last week, Cornwell Muleya, CEO of Air Uganda was suddenly advised that the airline's AOC had been revoked by the Uganda CAA. Operations ceased immediately. The trigger seems to have been a standard ICAO audit highlighting, as they always do, various deficiencies in the regulator's safety oversight. Although this is more about the regulator than the airline ,the company is now having to submit an application for its AOC to be reinstated.

A similar thing happened in the Democratic Republic of Congo three weeks ago. An ICAO audit highlighted deficiencies in local navaids. The knee jerk response to this not unprecedented state of affairs was to declare them all unserviceable. This instantly converted domestic operations to VFR only although dispensations were granted to enable international links to continue from Kinshasa and Lubumbashi. Karongo, part owned by Brussels Airlines, instantly stopped flying. This in a country with no real road or rail alternatives. Do we need to describe the results?

Down in Namibia, Air Namibia's routine application to renew its AOC was rejected and the company's MD suspended. Politics is at play here but the airline now faced grounding when its AOC expired and has no MD to sort it all out. Disruption and discomfort loomed. Fortunately the country's civil aviation authority has now cleared it to continue flying.

Meanwhile Kenyan officialdom has also drunk the water. Despite the country saying it is trying to diversify its inbound markets to reduce its over dependence on Europe and an announcement last week urging more Nigerians to visit the country, the shutters have come down on the South Africans. From here on they are hit with a US$70 visa fee, even for transits,  along with something that must surely come from a 1952 manual,- the need for a return ticket and a letter of invitation to visit. Not only that but in a new 2014 twist applicants must also visit Pretoria for "biometrics". Who from outside the immediate area is going to do that? In what sort of world do these regulators live? South African tour operators are up in arms and Kenya Airways and the tourism industry pay the price of over zealous jobsworths.
As if to add another block of concrete to the feet of Kenya Airways in particular, there is now VAT on airline tickets sold in Kenya as well as on aircraft and spares purchases. Aviation and tourism are essential to the economy.They have been thriving in Kenya and since privatisation the "national" airline has been one of the continent's big success stories. Maybe that in itself has made it vulnerable. Some people just can't stand success if it makes others look good.

The consistent theme seems to be one of not just firing odd shots into one's own feet but machine gunning them just to make sure. Mind you, the UK with its official reluctance or hesitation to build new runways, railway lines as well as to build or even maintain roads despite its exorbitant taxes on vehicles, fuel and air travel  hardly sets anybody a good example.


-John Williams-

African Roundup:    April – May 2014

 Later this year sees the arrival of the first of Air Maroc’s four B787-8s, highlighting the transformation of the airline over the past few years.  Significantly The new aircraft will make  possible the re-launch the Casablanca-Dubai route as the carrier increasingly focuses on connecting traffic. Historically it has seen itself as a Casablanca based point to point carrier catering primarily for European holiday-makers. Then came the 2006 signing of an open-skies agreement with the EU which swept away its bedrock revenue by providing an open door to European LCCs. The newly unleashed severe competition undermined RAM’s existing business and profits. In response the carrier has upgraded the fleet, pruned unprofitable routes and cut headcount by nearly half.  3 years of profitable operations have been its reward.

The signing of a codeshare agreement between Kenya Airways and South African LCC, Comair’s Kulula brand, highlights the continuing evolution of traditional LCC business models. Originally formed as ‘stand-alone’ businesses their target was the non-flying mass market.  For many, volumes grew quickly. This attracted even lower cost and lower fare new entrants to the markets. As a result individual carriers’ growth rates faltered. The Johannesburg-Durban-Cape Town triangle became a notable dogfight where anyone who could lay their hands on well written down classic 737 felt they should have a go.  With the recent launch of Kenya Airways own LCC, Jambo Jet, Kulula now has access to growth potential between a variety of South African and Kenyan points. FastJet has signed a similar agreement with ProFlight in Zambia again bringing together LCC and ‘traditional’ business models.

In a loose union of Davids and Goliaths, ProFlight has also been innovative in signing interline agreements with Emirates and Kenya Airways. In the ongoing and long standing absence of a major Zambian carrier, helped by Zambia continuing to be on the EU ‘blacklist’ – ProFlight is well positioned to provide domestic feed into international carriers serving Lusaka and Livingstone. Of these, Emirates (daily) and KLM(thrice weekly) are the only big long haul players.  BA abandoned its sixty plus year presence in Zambia last year when its London-Lusaka services were withdrawn as part of its scramble out of Africa. The higher capital cost of new B 787s which are replacing B767s one for one could have been part of the mathematics.

As we have recorded and watched with fascination, foreign owned FastJet arrived in Africa in 2012 with expectations of absorbing and converting existing Fly540 operations in Kenya, Ghana and Angola into a pan-African FastJet low cost/low fare brand. So far it hasn’t quite worked out like that and it’s not easy to see quite where the airline is heading as a cohesive whole. In fact so far it isn’t one.  The eventual (expensive) agreement with Fly540’s majority shareholder appeared to result in FastJet having operating and financial control but the two brands remain discrete.  The loss-making propensities of Fly540 have now resulted in FastJet suspending some of those operations and two ATR42s are therefore for sale.  A yet to be defined ‘restructuring’ has been talked about. FastJet’s CEO has announced a US$500mn revenue target for 2018 to be delivered by a 24 aircraft fleet from new bases in Kenya, Zambia and South Africa. There is no mention of profitability targets or when cumulative profits might exceed the capital, leasing and operating costs already spent in paying for Fly 540 and all the flying the airline does before reaching break even. It could be quite a while.

Ethiopian Airlines is taking the battle for supremacy between east Africa’s two rival hubs right to Kenya Airways’ front door. It has announced a doubling of B737-800 frequencies between Addis Ababa and Nairobi to 4 per day.  Kenya Airways operates a mish mash of just 8 per week at varying times of the day.   Ethiopian clearly senses an opportunity to fish in the Nairobi pond and intend to give no quarter in the overall battle.  Both carriers have aggressive expansion plans underway and both vie strenuously for East African ‘hub supremacy’. Currently Ethiopian appears to be winning and its fleet expansion programme is the more aggressive .Both have airport capacity and facilities problems at their home bases and urgently need a lot of building work to produce 21^st century passenger-friendly airport terminals. Nairobi’s Jomo Kenyatta International, while improving and growing in a haphazard sort of way is Kenya Airways’ biggest disadvantage.  Its aged 1960s ferro concrete based design frustrates travellers and makes separation of inbound and outbound passengers impossible. This amongst other things holds back the launch of direct US operations by Kenya Airways. (The FAA will not grant the essential Cat1 grading).  Perhaps Ethiopian senses a Kenya Airways vulnerability as CEO Titus Naikuni’s retirement nears and the JKIA terminal saga rumbles on. Finding a replacement for Naikuni is also proving difficult. The airline is not expatriate friendly,-in the past one was even terminated before he began thanks to hostility from encumbents,- so it was never going to be easy. Other internal tensions also complicate life at Embakasi.

Business challenges come in all shapes and sizes.  In the same week that Emirates was accepting its 50^th A380, PrecisionAir of Tanzania was withdrawing its ATR42s to Mbeya , the country’s largest town close to the Malawi/Zambia border in isolated south west Tanzania. The need to carry round-trip fuel from Dar es Salaam restricted passenger uplift to below an economic level.  But in Africa there are always predators. FastJet has swooped in with increased frequency, its A319 being untroubled by the extra fuel load.

Of great interest to African, Turkish and other airlines will be the reported debate within Boeing about how best cater for the 190/210 seat aircraft market . The question is whether to go for a further stretched narrow body 737 or a further cut back widebody 787. This a slot which which concerns Kenya Airways, Ethiopian and SAA in particular as they expand their intra-Africa and medium haul regionals with conflicting interests of low seat mile costs, more freight capacity and the need for frequency rather than sheer capacity. It will also be watched closely by smaller carriers as it could provide them with a viable widebody to keep them competitive with their bigger rivals and enable them to make money on less dense routes from their home bases.  Just how far can the 787 be shrunk until its economics come off worse than a narrow body? This is a rerun of the 757 v A310/300 debate of the 1970s and none the less compelling for that. At that time the 757 was the hands down winner economically if not for passenger appeal and over time it seriously clipped the wings of the short haul widebodies on sectors of up to around 4 hours and later pushed narrowbodies back even into the lower density shorter long hauls, notably on the North Atlantic. This was despite shrieks from marketing departments that narrow bodies would be dead and buried and unacceptable to the market at the end of the 707/DC8/VC10 era. If a shortened 787 can shed enough basic weight to better the economics of a lengthened 737 it could be a serious winner,- and set Airbus a new problem as it is having problems selling the wider A350s below the -900 size and it’s doubtful if they could shrink it further without an expensive new and lighter wing. The narrower body of the 787 makes an economic shrink much easier.

1.  EAST AFRICA

Air Tanzania, desperate to achieve some sort of viability and rebuild a credible network hopes to resume Dar-es-Salaam – Lubumbashi – Kinshasa flights. It is also restoring Zanzibar and adding Arusha to the network with a daily Dash 8-300. The airline’s only other aircraft is a CRJ200.

 The airline’s ongoing financial problems however remain. A parliamentary debate called for Government to take on and remove from the airline’s books US$80mn of accumulated debt as well as paying for the purchase of two additional aircraft in 2014-15. Wiping the slate clean is  the only way to ever make the airline viable. While the debt remains on its books the interest payments cripple it before it even starts its engines. There is no way that any potential investor would take on responsibility for the $ 80 million. It would take decades to pay off even after it first broke even. (May 2014)

Air Uganda has joined IATA and AFRAA. CEO Cornwell Muleya is enthusiastic about the cost benefits of the AFRAA joint fuel-purchase scheme and the joint ground handling project. (May 2014)

Astral Aviation (Kenya) Cargo carrier has signed an MOU with Hainan Airlines which anticipates US$50m of Chinese investment.  No details have been made public.  (May 2014)

Ethiopian Airlines continues to add interesting spokes to its network. On 24^th May it launched 4 x weekly B737-800 Addis – Kano – Enugu flights, offering passengers from these two Nigerian cities the opportunity to travel abroad without going through the much disliked Lagos airport with its notoriety for hassle in assorted forms.

In common with many African governments and businesses , Ethiopian is looking to China for finance. It has signed an MoU for ‘financial support’ for fleet expansion, including commercial loans, finance leases and sale/leaseback with ICBC (China)

787-8 deliveries continue apace. Number 7 has now arrived and the remaining three follow before the end of the year. Almost inevitably they will want and need more,- and soon as the existing fleet prove that they can fill the 40 or so seat difference between 787-8 and 737-800 passenger capacity and really exploit  the widebody’s much greater freight volume as an additional bonus.

In a move to boost its USA business, the airline has signed a codeshare deal with United Airlines for flights between and beyond Ethiopia and its US gateways. (May 2014)

Fastjet is currently targeting a fleet of 24 A319s and US$ 500 million a year revenue by 2018. Meanwhile it has confirmed it is in talks with easyGroup (UK) over long term financing including conversion of easyGroup’s annual UKL500k management fee to equity.

 CEO Ed Winter anticipates US$47m operating loss for 2013 including Fly540 operations.

 In April the airline suspended loss-making Fly540 Angola operations and the 2 ATR42s are for sale. Fly540 Ghana ops now also suspended. ‘Restructuring’ of both carriers is the aim but there is a lack of clarity about future visions for them. There seems to be a lot of fog about here. (May 2014)

Kenya Airways. With the arrival of the first of its nine 787-8s the Kenyan carrier can now start looking forward again. With only 6 on order it may find that it has to retain at least its original three 767-300s both for route and capacity expansion and to alleviate some of its Embraer-induced shortage of cargo capacity.

The airline’s choice of internal colour scheme and new business class seats for the 787s is conservative and lacks a “wow” factor , particularly in comparaison to the Gulf carriers or London route competitor BA’s offerings. It is perhaps closer to shareholder KLM’s latest product. Verdict: A missed opportunity.

Commercially a new codeshare deal with Comair’s LCC Kalula, S Africa breaks fresh ground. The airline’s Johannesburg-Nairobi flights are its core, with Kulula feeding it from South African domestic points. Amongst other things this means Kulula now entering the distinctly non low cost business of getting involved in transfer baggage, interline ticketing etc.

Unsurprisingly in view of the large Muslim population on the Kenya coast, Mombasa is being inserted in the Nairobi-Jeddah E190 operated route from June. (Apr2014)

Rwandair launched 5 weekly CRJ900 flights between Kigali and Douala on 31^st March. Next will be Abidjan. Mumbai is also being mentioned as a possible addition or extension to the Dubai route.   (Apr 2014)

SkyAero (Kenya) launched Low Cost services between Nairobi and Kisumu and Mombasa at a one way selling price of $64 during the last week of May. The fleet of one or two DC-9s and a single B737-300 appears to belong to Pan African Airways with whom its website says it is associated.( May 2014)

Sudan Airways has leased 2 A320s for regional operations. Its fleet currently comprises 3 F50s and a single leased B737-300 and B737-500.  US trade sanctions impact on fleet flexibility. Once a player in the UK/Europe/East Africa market from the late 1950s Viscount era onwards  this airline is a shadow of some of its former selves.  (May 2014)

2.  SOUTH / CENTRAL AFRICA

Air Botswana. Having been without a substantive General Manager for more than 6 months, the company has appointed Ben Dhawa, a former Air Namibia Director of Operations. We wish him well. (May 2014)

Air Madagascar is wet leasing a euro-Atlantic B767-300ER from June to September to operate Anatananrivo – Moroni – Marseilles. The country is on the EU black list (Apr 2014)

Air Namibia is dropping its daily direct Windhoek-Accra A319 from June due to unsatisfactory loads. (Apr 2014)

Air Seychelles will again serve Paris CDG twice weekly via shareholder Etihad’s hub, Abu Dhabi, from 2^nd July (May 2014)

Air Zimbabwe has achieved IOSA re-certification for the 4^th successive year (May 2014)

Fly Blue Crane (S Africa) is a proposed start-up headed by ex-SAA CEO Siza Mzimela. Funding would be 80 % local. It would have a have regional rather than domestic focus. It has filed for an Air Service Licence. (May 2014)

flyCAA (DRC) is wet-leasing a South African registered A320 to operate its sole international route, Lubumbashi-Johannesburg.  The DRC RVA (DGCA) has banned the use of locally registered aircraft on international routes (Apr 2014)

Congo Airways (DRC) . The Government has announced the creation of a new national carrier to replace insolvent LAC Lignes Aeriennes Congolaises which is due for liquidation. An unspecified ‘technical partner’ is to be a shareholder alongside Government and local citizens.  (Apr14)

ECAir (Congo Brazzaville). Everyone wants to go to Dubai. EC Air launched a thrice weekly Brazzaville-Dubai route on 31^st March. This carrier is 100% government and was launched in 2011.  The fleet comprises 2 B737-300s, 2 737-700s, 2x B757-200s, all PrivatAir (Switzerland) wet-leases under Lufthansa Technik care. There are plans for an additional 2 aircraft during 2014.  The company serves Paris and regional African points.  (Apr 2014)

Flyafrica.com (Zimbabwe) is another start-up and has gained its gains AOC. It aims for a June launch and to progressively build up a fleet of 5 B737-500s linking Harare, Victoria Falls , Bulawayo and Johannesburg  (May 2014)

FlySafair (S Africa) has received a Domestic Air Service Licence but its operational start-up date has yet to be announced. (Apr 2014)

Mjair Airlines (Zimbabwe) has applied for an Air Service Permit to launch domestic, regional and international scheduled passenger services (May 2014)

SkyWise (S Africa). This company’s Air Service Licence has been revoked due it not starting up within 12 months of granting. It is/was planned to be a new LCC to be born out of the liquidated 1Time. (Apr 2014)

Trans African Airways (S Africa) is a start-up planning to fly with 2 A320s ‘in cooperation with CAA’, Compagnie Africaine Aviation, of DRC (May 2014)

3.  WEST AFRICA

Afrinat International Airlines (Gambia) plans to launch B747 operations on 26 June. These are to include thrice weekly to Accra and Harare 3pw and for times weekly to New York 4pw. This sounds ambitious.(May 2014)

Air Ghana. This is a new cargo carrier which on 1st May started flying for DHL with the first of 5 737-400 freighters. The aircraft are in DHL colours.A Ghana AOC has been obtained and a regional network is envisaged. (May 2014)

Arik Air achieved FAA ETOPS clearance for its leased A330-200, so in March operated the first ever USA service with a Nigerian registered aircraft. (Apr 2014)

ASKY CEO Yissehak Tewolde says break-even was achieved ‘last year’ after launch in Jan 2010. Network expansion continues initially by ‘tagging’ new points onto existing routes.  West/Central African feed at Lome into/from Ethiopian’s Accra – Lome – Rio/Sao Paulo flights averages 40 per flight and is growing. Togolese technicians are under training in Addis.  The 5 year vision is ‘a successful international airline with solid market coverage’ dominated by on-line sales.

South African Airways has said it wants to discuss cooperation in the airline with Ethiopian but it is difficult to see why Ethiopian should have any interest in such an arrangement. (Apr 2014)

Azman Air (Nigeria). The Kano based carrier started domestic ops on the Lagos-Abuja-Kano triangle on 15^th May using 2 ex-BMi B737-300s. (May2014)

Ceiba (Eq Guinea) has wet-leased a B737-800. Its current fleet stands at 4 ATR42/72, one B767-300ER and one B777-200LR. It operates a West African regional network and long haul to Madrid and Sao Paulo (May 2014)

Colombe Airlines (Burkino Faso) has added a ATR72-200 to its ATR42-300. Both are wet-leased. (Apr 2014)

Cronos Airlines (Eq Guinea) has an additional B737-400 in the fleet which flies domestically between Malabo and Bata and regionally to Cotonou and Douala. Port Harcourt and Abuja are planned additions (Apr2014)

Discovery Air (Nigeria)a Lagos-based start-up has accepted a second B737-300. Its planned June 2014 schedules are on the Lagos – Abuja – Port Harcourt triangle. It has though yet to obtain an AOC. (May 2014)

Goldstar Airlines (Ghana) This very ambitious and optimisticstart-up (they are everywhere, is the money though?) aims to operate Accra to Baltimore, Gatwick, Guangzhou and Natal (Brazil) with a B747-200. Aircraft of that age historically have demanded substantial engineering and spares resources. They may be (very) cheap to buy but they are expensive to operate.  (May 2014)

Mauritania Airlines International will receive an ERJ145 in June followed by a

B737-800.  The current fleet 2 B737-500s serves West African regional points and, twice a week, the almost inevitable Paris where it is up against a four times weekly Air France A330-200. Mauritania’s EU blacklisting was lifted in Dec 2012 (May 2014)

Niger Airlines (Niger) is talking of start-up this year focusing on West African regional routes with a wet-leased B737-200 and a Fokker50 (May 2014)

Sahel Airlines is another proposed new carrier to be jointly owned by Mauritania, Mali and Chad.  The latter two do not have operational national airlines. (Apr 2014)

Senegal Airlines with USD17.5m of debt is seeking a ‘strategic partner’ to ensure survival. SAA, Air France and Ethiopian are front runners. A decision is said to be likely ‘very soon’ . Is this the same SAA which is short of money at home?(May 2014)

Slok Air (Nigeria) is seeking Emirates partnership to relaunch operations. This may be a little optimistic as its AOC was revoked in 2004 and liquidation followed. It’s not an obvious unmissable opportunity for the very hard headed gentlemen of Dubai. (Apr 2014)

4.  NORTH AFRICA

Afriqiyah is discussing with Boeing a possible late 2014 order for 10 B737MAX to replace aging A320s  (May 2014)

Egyptair. The collapse of incoming tourism is behind talk of a US$1.4bn 2014 loss (May 2014)

Libyan Airlines is negotiating with Bombardier for 10 C-Series to replace CRJ900s. A decision targeted for late-2014. (May 2014)

Libyan Airlines / Afriqiyah the long anticipated merging of the two carriers has been deferred in the light of the nation’s effective civil war  (May 2014)

Libyan Wings is leasing 2x A319s to facilitate a start to operation in Q3 this year. Longer term it plans to have 3 A350-900s and 4 A320neo. (May 2014)

Nawras Air (Libya) is a Tripoli based start-up planning to launch with A320s. Details are lacking. (May 2014)

Royal Air Maroc is preparing for the arrival of the first of 4 B787-8s and the re-launch of its Dubai route to expand its Casablanca hub. The recent shedding of unprofitable routes and fleet rationalisation plus a 50% reduction in staff have led to 3years of profitable operations. (May 2014)

Tunisair launched twice weekly Tunis – Erbil A320 services on 29^th May. (Apr 2014)

5.  NON-AFRICAN AIRLINES

Air France. As forecast the big one is coming to north of the Limpopo. The company intends to introduce the A380 on three of its currently nine weekly Paris – Abidjan services from October. (Apr 2014)

Emirates is giving its competitors a bit of a breather for 90 days starting 1st May by reducing frequencies to 6 African points during the 80 days of runway re-surfacing at Dubai. This has meant the temporary shedding of 25% of its total movements at Dubai and will result in a network lost revenue cost estimated at US$272m. As previously reported in Airnthere, Dubai airport perceived punctuality with 75% of the normal operation flying from 50% of the normal runways is better than it has been with a 100% operation from 100% of runways.   (Apr 2014)

Royal Jordanian dropped Accra from the Amman-Lagos-Accra-route from April. (Apr 2014)

Turkish Airlines in June, continues the relentless expansion of its African network by adding B 737-800 services to Cotonou, Bamako and Conakry to their African network in June.  (Apr 2014)

6.  MISCELLANEOUS

DRC Govt has apparently revoked all local carriers’ international traffic rights, including Korongo and flyCAA, but the situation is unclear. ( note Korongo’s twice weekly Lubumbashi-Johannesburg flights returned to on-line display in May). Some AOCs have also been suspended due to slow progress towards IOSA certification. Okapi and Congo Express, both stopped operating in 2012 (Apr 2014)

DRC under ICAO pressure the RVA (Board of Air Transport) declared what everybody already knew to be the case,-ie all navaids (VOR/ILS) within the DRC are unserviceable. This limited domestic flights to VFR only. Mysteriously ILS availability continues for inbound cross-border ones. Unsurprisingly in the face of the rainy season, Korongo immediately cancelled all domestic schedules.  (May 2014)

Swaziland has been removed from the EU blacklist.  Mozambique and Zambia are commended for ‘making progress’ but, as yet, remain on it.  (Apr 2014)

Tanzania. Construction has started on the new Terminal 3 at Dar es Salaam airport and work on the new terminal at Kilimanjaro continues. Unusually on a continent where most current infrastructure is Chinese the Dutch are funding and arranging the construction contracts at both. Perhaps not entirely coincidentally, KLM, with its daily A330-300 on a triangular routing is the main European long haul operator to both airports.  (Apr 2014)

John Williams

31 May 2014

Karachi: Food for thought about the unthinkable reality.

The attack on Karachi airport last night will have sent a shudder down the spine of national and aviation security people everywhere. It was the sort of attack that was pretty much inevitable sooner or later. It is almost something people haven't dared to think about. Many heads remain deeply buried in the sand because the solution is so difficult.

Fortunately, though not for those who died or were seriously injured there, Karachi was a relatively limited action. There is no guarantee that any similar events will be. They were also fortunate in that there is an armed and capable military presence on the airport.

How many airports worldwide can honestly say that that if a lorry load of terrorists were to suddenly run into a terminal and another break through the gates onto the ramp they have 24/7 SAS type teams on hand to immediately counter and contain the attack?  If they can't, then within minutes hundreds or thousands could be dead in the terminals and every aircraft on the ramp on fire. It doesn't bear thinking about,- and yet it must be. Not only the security forces but every airport, manager, dispatcher and aircraft Captain must have a picture of what they would do in this situation.

Airlines operate through a good number of airports on the basis that the perimeter security is good enough to stop any such attack before it reaches anywhere it can do harm. In too many cases this is a fiction. The problem is that everybody knows that  if a tougher view were taken a good number of major, never mind minor, cities would immediately lose their air services. Indeed many global networks would collapse and international travel would be in an impossible state.

Whether one likes it or not, the minimum requirement for any international airport should be the presence 24/7/365 of a highly trained and appropriately armed rapid response unit ready for instant response when the "Go" button is pressed. Every minute counts. No time for struggling into kit and picking up equipment. The same goes for some tourist resort areas in higher risk parts of the world and no amount of complaining about the perceived unfairness of adverse foreign government travel advisories can disguise the fact. If one thinks about a middle of the night event and the likely speed of response in some parts of the world, it quickly becomes frightening and then terrifying. Worst of all, it's real.

The unthinkable must get further thought , followed by real action- and quickly. 

Railway upgrading. Men pay the price of mice.

The latest issue of the excellent fortnightly "Rail" announces that the planned budget of £1 billion for the electrification of the main line from London to Bristol ,Cardiff and Swansea is already looking like being exceeded.

The culprits? Disagreements with councils over road closures and the old familiar suspects newts, bats and now dormice. The newts and bats are fresh from having delayed the reopening of the second bore of the short Wolvercote tunnel, essential for the new link between Oxford and Marylebone, by the best part of two years.These species seem to crop up remarkably frequently in debates about,- that means opposition to,- HS2 and other road and rail projects large and small. One has to wonder if they are that rare and endangered after all. They certainly seem to be much less so than is the notion of building to meet the transport and travel needs of the 21st century and future generations.

A Plane, a Yacht, and no Nimrod. What now?

Two recent disappearances have had a common thread,-or rather two. Both are pertinent to civil and military aviation and navigation.

Both the MH 370 and the yacht Cheeki  Rafiki and their occupants have disappeared mid ocean. Both have required air searches and both saw their locator devices fall short of the robustness, range and longevity they needed.

The ideal search aircraft would have been the Comet 4- based Nimrod. The MR2 maritime reconnaissance version was scrapped in 2009 as an economy measure by the Brown government. The current coalition finished the job by cancelling the much reduced order for 9 of the substantially rebuilt and re-equipped MR4s . The MR 2 did its job well and the MR4 form gave it a 6,900 mile range. Like its predecessor the Mk 4 had the ability to transit quickly from its base to the search zone and then thanks to a big wing,- originally designed for the underpowered early 1950s DH Ghost engined Comet 1 to enable it able to land slowly and take off reasonably quickly on hot "Empire" routes, -  it was able to loiter slowly for several hours on much reduced power. The turboprop stub winged Electra based Lockheed Orion, the only alternative now available and of which the UK has none, is much less capable especially in the fast transit area.

There is no question of reviving the Nimrod. The way ahead therefore has to be approach the problem from the other end by increasing the capability of the systems to match the search capability available. This means firstly boosting the capabilities of satellite tracking systems so that the location of any crash or sinking is immediately known. This should not require any messages, pings, handshakes or whatever being transmitted from the tracked aircraft or vessel.  In any case the locator equipment on aircraft and vessels should be incapable of being turned off . In addition, the longevity and range of locator systems from aircraft / vessel right down to individual lifejacket size should be substantially increased. Much of the technology is already available and should not be difficult to develop further.

There is potential for a positive common legacy from these two tragic and very different events.

The Mathematics and Physics of Runway Capacity and Utilisation.

-Like London's Heathrow, Manchester, Hong Kong, Singapore and others ,Dubai Airport has two parallel  runways.

-For 90 days from 1st May until the end of July Dubai will be operating with only one of its two runways open at any time. Runway resurfacing and taxiway additions and improvements are now essential so the airport has simultaneously taken all its bulls by the horns.

-As result movements have been reduced by around 25% throughout the period.

-Prior to May 1st inbound holding delays of up to 40 mins were common especially in the peaks Departures were also frequently held awaiting slots.

-One might have expected that with runways reduced by 50% and movements by only 25% things would have got worse.

-In fact they have got noticeably better.

There is a potentially rich seam of study here for physicists, statisticians and others. Somewhere in the mix must be critical points up to which everything goes reasonably well and beyond which it suddenly goes over a cliff and collapses in a heap. The Gatwick people whose achievements with a single runway are legendary may have a view. So would those who controlled Hong Kong's Kai Tak with the added complication of the famous late sharp right hand turn and the frequent nailbiting gamesaver "Expect late clearance to land".

There is another interesting issue here about airport design. Dubai's layout with its main terminal to the west of both runways requires much crossing of the western runway by traffic using the eastern. In theory this does not reduce runway movements/capacity as the crossing aircraft do so in the unusable gaps immediately after the landing or departing aircraft has passed across their nose. The same applies at Heathrow where aircraft from Terminal 4 or the Cargo or VIP areas using the northern runway have to cross the southern one to do so. The home and other frequent user carriers may normally be able to confidently accomplish the crossing in the time allowed. Others may be much less quick off the mark (controllers will know who they are but consistency is never total) and require more of a gap before the next movement on the runway to avoid the further capacity- reducing complication of people having to hit the go-round or abandon takeoff buttons.

In all this ,- and notably the debate about a possible 3rd or even 4th runway at Heathrow,- the location of the terminal(s) is crucial. On a two runway airport the terminal complex needs to be between them. Put a terminal north or south of the 2 runways Heathrows T4 style and you've got a time wasting problem. Add a third runway and another terminal between runways 2 and 3 is required. All three runways should not be seen as serving both terminals unless the third is so far offset from the previous two that a taxiway can be built from it well clear of the thresholds of the other two enabling access to the original terminal area without crossing or interfering with the intervening live runways. It's possible but would require a lot of time and money spent on additional  taxiing.

By the same token even at the present Heathrow where every additional slot is worth millions, all aircraft to and from the southern side of the airport should routinely be restricted to the southern runway,- and always have been. In the way is the endless debate about and refusal to accept or impose mixed mode operations as a matter of course. That debate could go on for a while yet.

Meanwhile Dubai, its planners and operators have firmly grasped the nettle of the 3 months single runway operation and made it work from day one. The cynics have been put to flight. Some say "Ah, but they've cut back too much". They ignore that hidden critical point, the right side of which the planners have stayed regardless no doubt of urgings to increase the risk. They got it right.

 Back now to the mathematicians, statisticians and physicists to produce winning formulae for the world.

African Roundup February/March 2014

Kenya is in the process of chalking up three significant events.  Kenya Airways’ first B787 has arrived in Nairobi and subsidiary LCC JamboJet has taken to the air. Meanwhile, spurred on by the fire which destroyed the arrivals building and badly damaged KQ’s departure terminal, Unit 2, the airline’s completely new departures building Unit 4 at Nairobi Airport (JKIA) is set to finally open in July. This, which is intended to a major improvement on the existing 1970s vintage buildings will house only Kenya Airways and KLM. It effectively doubles the international departures capacity of the existing semi-circle of terminals/units. These are all joined as one through concourse airside although it isn’t quite clear what the link to the new building will be. At first sight its construction might require the destruction/knocking through of the airport’s only decent airside catering outlet, Java House,but we haven’t seen the plans. See below for more on the airport saga.

With the arrival of the first of 9 B787-8s, of which 6 will be delivered this year, Kenya Airways becomes the second African operator of the type after Ethiopian. It is unclear whether any or all of the existing 767-300ERs will be retained and if so for how long. It must be tempting to keep some if only to provide belly hold freight capacity on regional routes which suffer chronic shortages from the lack of much or any of it on the Embraers. It would though be an expensive way of fixing that problem .

The  787’s arrival celebrations masked the costs and frustrations of the near 3 year delay. Current plans are for it settle in on domestic and shorthaul routes to Mombasa and Dar es Salaam and then start “real” medium and long haul service to Paris and Johannesburg  in July.

CEO Titus Naikuni’s statement that Kenya Airways is a successful international business that just happens to be based in Nairobi, is significant even if not fully grasped or appreciated at home. The expression was first used by a short lived foreign senior manager in 2001 but brushed aside at the time. It is though exactly the right message to be conveying to the world. Kenyan and African brands need to be and can be truly international and as such are exportable to the world. Remember the origins of Kenco,- the Kenyan Coffee Company . There was a time when NAS was one of the dominant caterers at Heathrow. Those three letters stood for Nairobi Airport Services. Further south, South African Breweries, is now part of a global megabrand. It can be done although there is the real problem of ensuring that the origins don’t disappear under what really turns out later to be a foreign takeover rather than merger.

Two years after its originally intended debut, Kenya Airways’ 100% owned low cost carrier JamboJet is now in the air.  With lessons learned from the failure of Kenya Airways ‘ first LCC venture, Flamingo Airlines, back in  2001/ 2003, the new carrier is aimed to  deliver operating cost reductions and increase the Group’s market penetration.  By steadily increasing domestic and regional frequencies it should enable Kenya Airways to progressively reallocate newer and larger fleet types to serve higher yielding markets.  It will also raise the barriers to a profitable operation by FastJet and thereby threaten to deprive them of East Africa’s largest market. FastJet sounded the alarm in 2012 by planning to launch LCC operations in Kenya but the Kenya licencing authorities quickly appreciated the conflict with Kenya Airways’ intentions and have so far kept their obstructive foot outstretched against what they see as a non African opportunistic intruder. FastJet approached setting up business in Kenya with startling naiivity. They assumed a political open door to what they claimed was something new in African aviation and seemed not to anticipate opponents reasonably enough fighting to preserve their domains and every cent of revenue. They must now and expensively appreciate that start-ups in Europe and Africa have different challenges. For the time being they are concentrating on Tanzania and Zambia as bases for business growth and profitability as well as raising more capital to sustain their efforts.

We talked above about the Nairobi Airport story . There is more though. The delays to the renewal of Jomo Kenyatta International has cost Kenya Airways dearly. The airport, its buildings and systems is single handedly hobbling network expansion and as well as deterring existing passengers from using it. If you can change flights in the Gulf, why choose the relative hassle and lack catering outlets comfortable seating areas and decent shops in which to browse in the claustrophobic gloom of Nairobi’s terminal units? The whole airport game has moved on several generations since Kenya last built one. The big bang was when Singapore's Changi opened. Here for the first time was a major airport which people literally went out of their way to fly though. The main complaints were of too little rather than too much time spent there.  People checked in early to enjoy the facilities and in doing so,-good news for the airport,- spent money, often lots of it, while doing so. Since then all over the world new or rebuilt terminals have, the hassles of security apart, just got better and better. Although a big improvement on what has gone before, it isn't realistic to expect Kenya Airways' new unit 4 to get to Changi level. Nobody ever thought seriously about aiming that high or probably why they even should. That fact should provide thought about the necessary level of future ambitions. There is an opportunity in the entirely new and separate Kenya Airways and partners terminal now built in a joint venture between two companies,Anhui Civil Engineering Group and China National Aero-Technology International Engineering Corporation under a £395 m contract due for completion in 2017. The world's travellers will make no excuses for Africa if the moment is not taken. This has to be a first rate , high quality world class facility.

There is something deep in the psyche of many governments worldwide that makes them want to own an airline. In Ghana, breaking Ghana Airways out of West African Airways was almost the first thing the newly independent government did in 1958. The same formula was followed almost everywhere else the moment the colonial flags came down. In the meantime ,led by the UK, most European countries have decided that it’s a mug’s game. Some are still finding the divorce almost too hard to bear though. All of Africa’s bright new ‘national carriers’ were originally 100% state owned. They had to be where not allowed to collapse most still are. Private investors found the whole business of airlines unattractive and it’s still not one most would take a sure thing punt on. It causes many sleepless nights. Since the 1970s though, with the improved economics of modern aircraft and long delayed deregulation of jealously protected traffic rights (In Africa even adjacent British colonies or groups of defended themselves against each other) the private sector has grown. Kenya Airways with its low 29% government shareholding is an example. The airline’s freedom from government control and civil service meddling has allowed it to become a profitable success story.  Freed of its shackles it has truly flown.  The situation is improving but elsewhere in Africa officials still cling on despite evidence that government-owned airlines cost their national treasuries dear. Not one is,or ever has been, profitable. In the past few weeks Air Botswana has received a US$157m bailout .Air Namibia has had a similar US$169m while back in May 2012 once proud South African Airways sought US$745m from its government. What evidence could be clearer and yet despite their previous experiences the governments of Ghana, Zambia and Uganda are again seeking to start new ‘national carriers’.  Jointly the governments of Mali, Niger and Mauretania have a similar plan.  Ministers of Finance should ready themselves for future begging letters.

There is an old saying, ‘If you think safety is expensive; try an accident’.  Effective CAA or DGCA safety oversight guards against obvious safety risks.  Performance tends to improve year by year.  But what is one to make of fraud in the associated field of aircraft insurance, itself a legal requirement?  Reportedly evidence has emerged within Air Zimbabwe of fraud spanning 4 years and possibly USD10m of diverted premiums. Where did that go and how? Where were the auditors? If true, where are the alleged diverters?

1.  EAST AFRICA

Air Tanzania . Yes, they are back! They took delivery of a leased CRJ200 on 8^th March and immediately launched 4 weekly Mbeya services.  Two CRJ700s are to arrive in April/May.  The existing fleet is a Dash8-300 and a leased B737-200. They are already talking of flying internationally to Lusaka and Lumumbashi.(Mar 2014)

Air Uganda has expanded its codeshare with Precision Air to include Kilimanjaro and Dar es Salaam both to be operated with Air Uganda CRJ200s. The Kigali to Dar es Salaam services are to rise to double daily. Their fleet upgrade thoughts include replacing CRJ200s with 700 or 900s (Mar 2014)

Ethiopian Airlines will raise its London services from 6 a week to daily in July. To do so it must have acquired a hard-to-get slot. Kenya Airways, having dropped from ten to seven this summer, is heading in the other direction. Hopefully they sold the slots on at a good price.

Spurred on by the tens of thousands of Chinese working on infrastructure and other projects in Africa, CEO Tewolde Gebremariam is looking at China for more expansion. On 29^th March Shanghai joined the network with 787 services. He states “China will become our biggest single country market” needing pan-Africa accessibility hence our hub building,- vis West Africa (Asky, Lome), Southern (Malawian) and Central (DRC, possible).  (March 2014)

Looking further ahead and in the other direction, the airline plans to launch an Addis-Dublin-Los Angeles service in 2015.

Expansion of the Addis terminal, its seating and catering outlets is essential to make all this possible. Africa’s aspirant hubs must think Gulf.

FastJet has usefully appointed Jimmy Kibati, ex-Kenya Airways, to be GM East Africa.

Meanwhile, especially compared with early expectations and many would say needs, the airline’s route expansion still appears to be pedestrian. Lusaka to Johannesburg services will launch FastJet Zambia in 3 to 6 months. To help business in Zambia along it has signed an agreement with ProFlight Zambia enabling reciprocal thru-ticketing.  ProFlight will cease to fly between Lusaka and Dar es Salaam but will usefully add Lilongwe to the combined networks.

Back at its Dar es Salaam base the airline has upped Mwanza flights to 17 per week including 7 late night flights. Its route structure doesn’t yet offer opportunities for the sort of long overnight sectors which have so enhanced Kenya Airway’s narrowbody utilisation. This makes late night arrivals and early morning departures even more essential.

The airline has confirmed that it is in talks with easyGroup (UK) over long term financing. (Apr 2014).

FlySAX (Kenya) LCC plans the creation of a new LCC, SAX Tanzania, to serve thin domestic routes with 18-20 seat aircraft plus regional points. That won’t please others, notably Precisionair and its 49% owner Kenya Airways or, none would have thought,Fastjet Tanzania. The new GM moves from FastJet.  Don Smith is principal shareholder of Fly540 (Kenya) and FlySAX.  Fly540 is 49% owned by FastJet. All clear then?

Fly540 (Kenya) has launched a claim of ‘anti-competitive behaviour’ against Kenya Airways new LCC JamboJet. The viability of existing carriers will be put at risk is the case. (Mar14)

Kenya Airways current reasons for joy are well covered in our leader above. Less happy for them is the need to inject US$30m into troubled, 41% owned, Precision Air of Tanzania which apart from anything else has been having a tough time against Fastjet.

Its  own low cost subsidiary LCC JamboJet took off on 1^st April with B737s leased fromits parent . The initial network consists of a twice daily Nairobi to Kisumu , five daily to Mombasa ten per week to  Eldoret  with Kenya Airways correspondingly reducing its ‘mainline’ capacity on these routes.  Regional expansion is planned.  Tariff levels start at USD33, including taxes.

 Its next trans- Africa spoke will be to Abuja starting in June. It arrives a nose ahead of Emirates' late July start.  (Mar 2014)

Precision Air in mid-March increased freqencies from Dar es Salaam to Kilimanjaro and Mtwara together with Kilimanjaro to Zanzibar. The scenic route from Dar es Salaam to Entebbe which flies over the Ngorongoro Crater and Serengeti will now be operated solely by codeshare partner Air Uganda (Mar 2014)

Rwandair The new, dual class, Q400 has arrived and the leased Dash8-200 is to be returned.  On 31 March the airline launched 5 weekly CRJ900 services from Kigali to Douala. Abidjan is to follow (Mar 2014)

2.  SOUTH / CENTRAL AFRICA

Air Botswana is to receive USD37.1m ‘recapitalization funding’ from Government, its sole shareholder.  The 2012 loss was US$59m,and 2011 US$61m.  The business has been without a substantive General Manager for more than 6 months.  There aren’t many signs of things getting better.(Mar 2014)

Air Madagascar plans long-haul route expansion to India and China.  Banned by the EU it uses a pair of wet-leased Air France A340s for European services. It also plans to replace one of its two B737-300s. (Feb 2014)

Air Namibia has also received a little help from its sole shareholder, the Namibian Government with a USS44.3m bail-out, or should we call it ‘recapitalisation funding’  for 2013/4 . It is also , even one might say, planning to be back at the Finance Ministry for increasing yearly amounts of US$54.3 m and US$71.3m until 2016-7 after which self-sufficiency is forecast under the current ‘turnround strategy’. (Mar 2014)  

Air Zimbabwe As above, an external forensic audit has revealed a 4 year US$10m aircraft insurance fraud including periods of operations without cover.  Further revelations are anticipated including the whereabouts of a missing B767 engine. (Feb  2014)
 The company’s current outstanding debt now totals US$232m. Could be worse in the circumstances . A Government ‘protection order’ has been granted securing assets from creditors. They would do well not to rely too heavily on that overseas (Feb14)

Air Zimbabwe in seeking to take a bit off pressure of current leasing and operating costs, is proposing to replace its wet lease of a EMB145 with operating one. The busy government auditors are to probe details of the expiring lease.(Mar 2014)

ECAir (Congo Brazzaville) On 31^st March EC Air launched thrice weekly Brazzaville-Dubai services presumably aimed at the frequent flyer traders. This 100% government owned carrier was launched in 2011 with a fleet of two B737-300s and two B757-200s, all PrivatAir wet-leases under Lufthansa Technik care. There are plans for additional 4 aircraft during 2014.  Paris and regional points constitute its network.  (Mar 2014)

LAM (Mozambique) has ordered  three new B737NGs for delivery in 2015-17 (Feb 2014)

The airline talks ambitiously of expanding regionally to include all SADC country capitals and the government has revived the 2012 intentions of creating an autonomous long-haul subsidiary.  (Mar 2014)

In the meantime the airline anticipates delivery shortly of a B737-700 to join its fleet of two EMB190s and a B737-500.

Proflight (Zambia) has signed a codeshare agreement with Emirates. It has also leased a B737-300 to add to its fleet of J41/J32 and C208 (Feb 2014)

In another commercial deal this enterprising substitute for a traditional national carrier an agreement has been signed with FastJet to enable thru-ticketing on their joint network.  FastJet alone will operate Lusaka – Dar es Salaam and at the same time expands its coded network with Proflight’s Lusaka-Lilongwe service. (Mar 2014)

SAA As anticipated whatever form of words is used, South Africa’s government has confirmed that the airline is undercapitalized, has a weak balance sheet and as a ‘state asset it needs support’. In short that means it’s running out of cash. The on-going evaluation of the turnround strategy progress will determine the level of support to be offered. (Feb 2014)

On a happier note ,by the end of the year the airline will have received 8 of the ordered 12 A320-200 on order to replace B737-800s. 10 A321-200s are also on order.  (Mar 2014)

SAA Express has cancelled plans for up to 30 replacement jet fleet. This doesn’t mean that they are not needed. It’s just that Fleet Strategy now falls within the recently unified SAA/SA Express/Mango group. There goes their relative independence and ability to make their own decisions? (Mar 2014)

3.  WEST AFRICA

Air Annobon (Eq Guinea) has replaced one of two wet-leased BAE146s with an RJ85 for its daily Bata-Malabo services (Feb 2014)

Gambia Bird on 30 March launched its Banjul – Bissau, Lagos and Douala routes with wet-leased A319s from shareholder Germania. Their network includes Gatwick and Barcelona (Mar  2014).

Senegal Airlines has returned 2 leased A320s and added a leased B737-300 to its remaining also leased fleet of a single A320 and a single CRJ200.(Mar 2014)

4.  NORTH AFRICA

Afriqiyah intends to resume flying to the EU in May using wet leased A320s.

 On the prime UK route, Afriquiyah has replaced Libyan Airlines with thrice weekly A320s to Gatwick.  The EU ban necessitates use of wet-leased aircraft by both these carriers. In February 2014 the Libyan CAA suspended Libyan Arab flights operated by NouvelAir, Tunisia due to a loss of ATC communications on one flight resulting in concerns about operational shortcomings (Mar2014)

Egyptair  has been having serious problems with falls in incoming tourism numbers due to concerns about local security . As result it has strategically switched its growth objectives to intra-Africa connectivity and is planning a big new fleet order shortly. This is likely to include E190s or CS100s for subsidiary Egyptair Express (Feb 2014)

5.  NON-AFRICAN AIRLINES

Emirates has named Nairobi, to which it flies twice daily, as its 5^th largest African route. Johannesburg leads.  African flights now total 160 a week. Once Dubai reopens in full after the 80 day runway resurfacing programme which will see flights reduced by around 25% from 1^st May to 20th July, this total will rise again with the start of a Dubai-Abuja route. (Mar 2014)

Qatar Airways is to start A320 Doha- Djibouti services from 27^th July. (Mar 2014)

6.  MISCELLANEOUS

Indian Ocean Commission (IOC) is proposing a merger of Air Mauritius, Air Seychelles, Air Madagascar and Air Austral into one regional carrier. Air Mauritius says ‘no’. Culturally the three airlines are all very different and real unification looks very unlikely. (Mar 2014)

Malawi’s  Blantyre Airport suffered sudden closure on 16^th March for emergency repairs to its (narrow) main runway. (Mar2014)

Mauritania, Niger and Mali governments are talking of launching a joint airline (Feb 2014)

Nigeria’s President Jonathan has sacked Aviation Minister Stella Oduah and NCAA DG Capt Akinkuotu  along with the heads of several other agencies (Feb 2014)

Uganda Political resistance is hindering the possible revival of state owned Uganda Airlines. That’s refreshingly good news when read against the above chapter of government-led interference almost everywhere.(Mar 2014)

Zambia Government talks have been held with Qatar Airways and others regarding the creation of a national carrier but Qatar CEO Al Baker is quoted as saying that they are only seeking investment in “carriers with strong synergies with us. We don’t want to get involved in fixing other people’s problems.” (Feb 2014)

John Williams

31 March 2014