Flying kites of doom muddy Brexit.

Politicians, business people with vested interests, media pundits and others catching the mood of the moment are flying more speculative kites about possible effects of Brexit than there are aircraft in the European skies.

The latest bit of alarmism comes in doom laden warnings that with the end of the European open sky air services between the UK and Europe could collapse. The Times relates " outside of open skies Britain would have to negotiate new complicated bilateral arrangements in which UK airlines can fly to Europe and vice versa. Complicated?.Really? Bilateral air service agreements are the general norm worldwide. They were in place between the UK and European countries for years before open skies and  largely worked well, despite some inbuilt protectionist tendencies.  No agreements?  Back to pre World War 2 and the ferries? We really don't think so. Routes to the UK and London in particular are the most profitable in most EU airlines' shorthaul portfolios They aren't going to let their governments sever the links in a game of political fisticuffs. New point to point bilaterals between the UK and European countries if kept simple should be easy enough to establish in days or at most weeks, not months. The UK for its part could ,- and should,-just declare open skies.

There could be a problem for British airlines which fly within the EU but solving the legality of that should not be difficult either by the establishment of  European subsidiaries or by reciprocal agreements. Easyjet is the big British player in this market and will have the most furrowed brows. IAG, whose cash cow BA is already a Spanish registered company despite its Head Office being in the UK, only flies intra European services with its Spanish based Vueling brand. To keep BA's UK rights legal IAG may have to spin it off again as a UK company but again that should be manageable without taking it totally out of the group.

Meanwhile a certain ardently Europhile Irishman, was yesterday lamenting the possible complications of Brexit and calling the whole affair "a shambles". That's easy enough to say especially as these are very early days in a two+ year process. It gets the headlines but the time might be better spent for all businesses, especially airlines and the tourism industry, to stop wailing about disaster scenarios and get on with plans to extract the best from what is after all only a return to the status quo ante. Let's not forget that the UK already had Europe's strongest and most diverse airline industry well before it joined the EU on January 1st 1973. Time for calm on the boardroom flight decks.

More on the Kenya Airways fleet....and future.

Further to our latest African Roundup's coverage of ongoing goings on in Kenya Airways the airline's excellent in-flight magazine Msafari gives more clarity on the current fleet plus the leasing out of the midlife 777-200s and  brand new leased-300s declared surplus to requirements.

Firstly the in-service fleet , 35 aircraft,  now consists of:

7   B787-8     Configuration  30J/204Y. Total 234
8   B737-800  Configuration 16J/129Y. Total 145
2   B737-700  Configuration 16J/100 Y. Total 116
15 EMB 190  Configuration  12J/84Y Total     96

This leaves aside the 2 leased out B787-8s, 2 sold and 2 parked (?)  B 777-200s and 3 leased out B777-300s.

Of these :

2 B787-8s are leased to Oman Air for 3 years, returning in 2019.
2 B 777-200s have been sold to Omni Air so are off Kenya Airways' books for ever.
2 B 777-200s do not appear to have been disposed of so are presumably parked awaiting a customer ,in which case they continue to rack up lease charges.
3 B777-300s have been leased to Turkish for 3-4 years so should return in 2019 or 2020.

The airline claims a saving of US$ 7 million a month from the leases but while reducing the cash flow pressure it is not clear whether that gives an overall profit or a loss on the deals. If it's a loss Kenya Airways will of course have to make up the difference to the headline lessors each month. That's called financial drag.

Looking further ahead the airline now has no more aircraft on order. That means the return of the 2 B 787s in 2019 should be welcome and easily absorbed in renewed growth. Painlessly reabsorbing the much bigger and then still only 5 years old B 777-300s means that the airline must by then develop a few of its key routes to keep them busy and full.  With London, Amsterdam and Far Eastern points already on the network that shouldn't on the face of it be too difficult. However if it is the airline will not be well placed to get the best deals for new leases or extensions to the existing ones. Potential customers would be in a strong position to drive down rates on offer. There should be plenty of alternatives available. These are already beginning to appear with Emirates and others rolling over the longest serving members of their fleets. That all gives Kenya Airways strategists, marketing and finance people something to keep before them for the end of the decade. In the meantime the $ 7 million a month ( an unimaginable figure in Kenya's own currency, highest denomination the shilling which needs 100 to buy a dollar or 125 for a UK pound) saving in outgoings will at least relieve the headaches for a while and give some space for the Pride of Africa to get itself together again,- if Kenya's politicians, unhelpful unions and others let it.

African Roundup August September 2106

There’s a lot of turbulence about. Many managements must feel as if they are having the fly through the ITZ several times a day, 365 days a year. Those clear blue skies days of euphoria just don’t seem to come any closer. It’s always a rainy season afternoon with towering cumulus stretching in all directions.

Four airlines are having unhappy times and grappling with plans to achieve profitable futures: Fastjet, Air Tanzania, SAA and Kenya Airways. Some new Boards have been appointed with new Chairs, plus new CEOs. The search is on for “competent” senior management teams.  Where do you look for people who understand what has to be done and are tough enough and have the support to do it? Life at the top of many African carriers, for nationals and imported foreigners alike, tends to be short and too many appointments end in acrimony. History is not in these airlines’ favour. Think Air Senegal, Cameroon Airlines, Virgin Nigeria and Air Afrique.

Fastjet, privately-owned and launched in 2012, is making its first attempt at a reinvention.  At its original launch the vision was of a fast growing Pan-African low cost carrier with a fleet of five A319s rapidly rising LCC style to 35 aircraft. Four years on it hasn’t happened. Profitability has been elusive and cash continues to evaporate.  New CEO, Nico Bezeidenhout, formerly with SAA’s low cost subsidiary, Mango, has decided to move Head Office from Gatwick to Johannesburg. Good up to a point and at least a move in the right direction,- south. It was always absurd to headquarter what was meant to be an African airline 4,000 miles from its target markets. Blending with the landscape is important on the continent. Ask tribesmen how they avoid predators. Not by taking them head on other than as a last resort. Location shows commitment for a start. Johannesburg, very much in Bezeidenhout’s recent comfort zone, isn’t the answer though. Africa north of the Limpopo views South Africa warily. To many it’s a very different country which hasn’t quite “got” the real world of sub Saharan Africa. Nairobi, so far the toughest nut for the Airline to crack, would have been a better bet.

The shrinkage of the fleet and the size of aircraft are hardly a dramatic breakout back into the original dream. So where now? Using EMB190s in lieu of the A319s, plus trimming the network and employee numbers are fine but the current stall in volume growth, falling load factors and rising disaffection amongst passengers,– 25% now say they would not recommend the airline to others,- is a serious concern. Recent poor punctuality and reliability are to blame.

Smallest of the four and very different is state-owned Air Tanzania.  For several years the operating fleet has been a single Bombardier Dash8-300 serving a small number of domestic points, probably kept alive by government as an insurance against foreign owned Fastjet or PrecisionAir leaving the scene.  Competing against these two its continued existence has otherwise been an anomaly. In the private sector it would have long since disappeared. The arrival of 2 new, Government-owned, Q400s does reinforce it though and promises an expansion of their domestic network and increased frequencies. The new Chairman and CEO have been given 6 months to deliver positive results but reality is probably that the operation will continue for the same reasons as before even if it does need ongoing financial “supplements”.

SAA’s revival provides the biggest challenge.  Government, as owner, has yet again stepped in with a financial lifeline. Technically bankrupt it has been awarded a further US$350m in guarantees. Yet another new Board has been appointed.  Controversially the previous CEO, Dudu Myeni, has been appointed as Chair. A new senior management team is to be formed with a “clear role” for day-to-day running of the business in an attempt to limit interference from the Board.  Installing a new management team will not be easy.  “Competent talent” is unlikely to be attracted to a business in such dire straits.  Almost a dozen previous incumbents have resigned in the past year. Meanwhile the airline pushing to reduce its flight deck costs. This could be interesting to eager recruiters from the Gulf in particular.

Then there’s Kenya Airways. Like Fastjet it’s visions of ever rolling expansion to make it into Africa’s international hub airline of choice have come to a juddering halt. “The Pride of Africa “ is looking a bit deflated. The 777s have gone. The four -200s were the right size and successful. The recently acquired -300s were far too large. Why were they ordered?   Now a couple of the ideally sized 787-8 haves been leased out, leaving the airline with a wide bodied fleet around the same size it was ten years ago. Kenya’s parliamentarians talk excitedly of “wrestling back control “ from 27 % shareholder KLM who’ve always exhibited a remarkable lack of control of it anyway. Also under attack are KLM’s allegedly unsatisfactory commercial agreements which appear to govern some aspects of pricing on Kenya Airways European routes (Amsterdam, Paris, London). Beyond that there has always almost inexplicably been little sign of KQ/KL codeshares which could have put the KL designator on routes radiating out of Nairobi. Similarly, other than on the Nairobi route, KLM’s own direct African operations have never carried KQ codes. Some, an increasing number, compete head on with Kenya Airways hubbing operations over Nairobi. Now the MP’s are demanding a full review of how the airline, initially consistently profitable its privatization after has come to its recent loss making state. Fingers are pointed at the previous management who no doubt can now expect a few unwelcome phone calls and maybe public appearances. MPs are reported as being about to block any further rescue funds for the airline until CEO Mbuvi Ngunzi and some other senior officials have been removed. All very well, but who is going to, or even want to, replace them? There is no news of what Deloittes’ 1,000 page report on their forensic audit says or what fruit McKinsey’s, about £ 1.7 million, six month consultancy may have borne or where it points to retrieve the situation and return to a growth agenda. Meanwhile another $50 million of losses have been racked up over the first six months of this year and in a further unraveling of its network hub synergies and ambitions Gaberone and Abuja are to be withdrawn in November.

But there are some brighter spots. Rwandair continues to grow and has taken delivery of the first of two new A330s. Ethiopian is raising its African destination total to 53 with the launch of Windhoek and ASky is to establish a new MRO in Lome.

From the archives … 90 years ago, in 1926, a London conference reported on a future ‘System of Imperial Air Communications’.  It recognised that, in just 6 years since 1920, ‘the commercial aeroplane has proved itself a practical instrument’.  But it firmly believed too that ‘the large airship is required for long distance transport’ once the ‘trying conditions of the tropics’ amongst other unknowns had been overcome.  By 1926 France had linked French Equatorial Africa to Paris and in the Congo SABENA had linked Leopoldville with Elizabethville (Kinshasa and Lumumbashi). For the British an experimental service linked East Africa with Khartoum – but all with rudimentary aircraft, not airships.  The idea of a UK-South Africa route was proposed by combining British and South African developments. One proposal was to offload UK sea mails at Walvis Bay and fly them to Johannesburg and other towns thus speeding delivery by several days. But despite the conference’s clear preference for the airship its entry into regular service never happened.  Perhaps the early catastrophes too deeply affected public perception and the confidence of constructors. And within a handful of years the USA was working on the development of the Boeing 314 transatlantic airliner and the trans-continental and short haul DC 2 and Lockheed Electra derivatives which with their developments were to revolutionise the whole airliner scene and global route maps. Notwithstanding periodic and even now current attempts in the UK to revive the concept, the airship’s brief bright future flickered and stalled as did some early hopes raised by luxurious flying boats which finally died in any credible form circa 1950 when DC4s, Constellations and Handley Page Hermes 4s took over the African routes, thereby winning the battle for landplanes for ever. Not only that but the first jet age, pioneered from 1952-4 by the Comet 1, was about to dawn, starting with the London-Johannesburg route, followed by Air France from Paris to Dakar. When metal fatigue brought all that to a quick halt in April 1954 it was still only 3 years until the Britannia, the world’s first long haul turboprop, was launched into service in February 1957. Again not to the USA but from London to Johannesburg. African routes led the world.

1.  EAST AFRICA

AB Aviation (Comoros) has added a leased B737-200 to its fleet of 2 Emb120s, to be used initially on the Hahaya-Antananarivo route.  Founded in 2013 the privately owned carrier links Hahaya with Tanzania, Madagascar, Mozambique and Mayotte. 

Air Djibouti is planning a September launch of Djibouti-Addis Ababa services with a B737-400 leased from Cardiff Aviation.  Two BAe146-300s and a B767-200 are to be added before year-end.  Djibouti-London is to be the first longhaul route.

Air Tanzania The Minister of Transport has sacked the CEO and Director of Operations on a charge of sending an unqualified pilot for training on the 2 new Q400s.

Meanwhile the first of 2 new Q400s has arrived followed by the second a few days later. Both aircraft are owned by the Tanzanian Government and leased to the airline.

Ethiopian Airlines is launching twice weekly services to Windhoek via Gaberone on 4^th October. Moroni will also come back on-line in November, thrice weekly, via Dar es Salaam.  B737-800s will be deployed on both. Windhoek will be Ethiopian’s 53^rd African destination.

 In October the Guangzhou frequency will rise from 7 to 10 weekly and   Chengdu is planned to join the network in summer 2017.

 With an eye to strengthening its position in Africa, Ethiopian is talking to the governments of Uganda, Zambia, Zimbabwe and Ghana regarding assistance in launching new national carriers. 

Fastjet Plc new CEO Nico Bezuidenhout has chosen Emb190s to replace A319s.  Three leased A319s are to be returned plus 2 to be sub-leased, by October when the first of 3 wet-leased Emb190s are due. The trimmed Winter 2016-17 flight programme will be flown by the smaller fleet.

Precision Air launched 3 weekly ATRs to Hahaya (Comores)on 27^th September. The route was dropped in 2014.

Rwandair launched a long distance turboprop route between Kigali and Cotonou with a Q400 on 2^nd September. Abidjan will follow. The delivery of the first of 2 A330s in September marks a new era for the company,- and higher expenditure.

2.  SOUTH / CENTRAL AFRICA

Air Botswana has a new Board but has yet to appoint a new substantive General Manager – 12 months overdue. The renewal of the aging mainly ATR 42-500 fleet is pressing. Unserviceability is growing. A search continues for partners to help fund US$220m for 7 new aircraft while the 2014-15 operating loss was US$ 15.6m.

Air Namibia is to launching a ERJ135 Windhoek-Gaborone-Durban route on 30^th October  and dropping Maun from the network.

Congo Airways (DRC) has gained its AOC enabling international operations and possible IATA membership subject to IOSA achievement.  Launch of Kinshasa – Johannesburg, Luanda and Pointe Noire routes are targeted for November.  Douala and Libreville are to follow in 2017.

Congo Airways (DRC) Less than 12 months after start-up the airline has set about reducing staff numbers from 400 to 200.  Current fleet: 2 A320s and 2 Q400s.

LAM has suspended an order for 3 B737-700s placed in March 2014.  First delivery was to have been in November. 

SAA Board member Ms Yakhe Kwinana, head of the Audit and Risk Committee has resigned.

Hong Kong’s regulator has threatened withdrawal of operating rights if financial statements are not submitted by 6^th, subsequently extended to 30^th,September.

State President Zuma’s Cabinet on 31 August appointed a new Board complete with re-appointment of controversial CEO Dudu Myeni as Chairperson.  The alternative recommendations of Finance Minister Gordhan were over-ridden. He is to meet with all appointees to “provide direction from a shareholder perspective”.

The South African government is facing legal action from the Democratic Alliance Party claiming that current CEO Dudi Myeni is an “unfit and inappropriate” appointment to be the new Board Chairperson. 

SAA To keep the airline flying it has received  a US$ 350 million ‘going concern’ guarantee from Finance Minister Gordhan following his pre-condition  to agreeing to the appointment of a new Board.  A new CEO and senior management team is to be appointed with a “clear role” to run the business day to day, The Board is to set a “clear deadline” for a return to profitability. 2014-15 loss was US$407m and 2015-16 loss US$125m. It’s mounting up so repayment day gets further and further away.Any sign of SAA being allowed to go under? None at all.

SA Expres launched a B737 route linking Johannesburg and Lumumbashi on 26^th September. 

3.  WEST AFRICA

Aero Contractors (Nigeria) suspended flying on 1^st September.  In February, 60% state shareholder Asset Management Co (AMCON) initiated a forensic financial audit.

Air Annobon (Eq Guinea) plans to relaunch as an LCC and is seeking partners to provide aircraft.  Current only a single route, Malabo – Bata is flown using a solo BAe RJ85. With more of these robust and capable aircraft becoming available as they are replaced by EMB and shortly Bombardier C-Jets we can expect to see more find homes in Africa. BAe are happy to provide support packages or guarantees for a further ten years at least.

Arik Air suspended operations pending renewal of aircraft insurance. Flights resumed the following day.

ASKY (Togo) has announced plans to create an MRO and training facility in Lome alongside shareholder Ethiopian Airlines. This mirrors Ethiopian’s on-going developments in Addis.

Camair-Co (Cameroon) Despite CEO Jean-Paul Sando revealing operating losses of US$2.6 million a month and $ 52 million of accumulated debt he talks of possible launch of Brussels and Dubai flights before the end of the year. These will replace the sensibly axed Paris operations which must have struggled against Air France competition.

First Nation Airways (Nigeria) temporarily suspended all operations between 1^st and 18^th September to resolve unspecified fleet maintenance difficulties.

Fly Sao Tome is a proposed start up with a single SAAB 340 and maybe F28-100s.  Regional destinations are quoted as being Principe, Douala and Libreville. Flying one-off fleets a long way from other operators or manufacturers spares holdings can mean low lease costs but some support difficulties.

Mauritania Airlines International has ordered a new B737-800 from Boeing.

4.  NORTH AFRICA

Tunisair has switched its order for an A330 and 4 A320s to one for 5 A320neo.

5.  NON-AFRICAN AIRLINES

Emirates has rescheduled its Abuja-Dubai services via Accra for re-fuelling due to Nigeria’s fuel shortages.

Mahan Air (Iran) has applied for a Scheduled Foreign Operator Permit to enable twice weekly Teheran – Johannesburg services.

Qatar Airways is launching the Doha-Windhoek route on 4^th October.

TAP The delayed launch of Lisbon-Guinea Bissau flights is now scheduled for December.  The 2014 Ebola outbreak disrupted earlier plans. Frequencies are also to be increased to Dakar, Praia and Sao Tome.

Turkish Airlines plans upping frequencies to double-daily on Khartoum, Addis and Mogadishu plus starting Harare services in late 2016 / early 2017.

6.  MISCELLANEOUS

Nigeria Two problems dominate. The jet fuel shortage continues to bite forcing some carriers to refuel abroad, eg, Ethiopian and Emirates’ use of Accra, plus the freezing of trapped sales revenue remittances.  The weakness of the Naira is the linked cause of both.   

Rwanda’s  government has now signed for the construction of new Bugusera Airport, 25kms from Kigali, to begin in mid-2017.  Portuguese company '’Mota Engineering and Construction Africa' will procure finance, construct and operate the airport for 25 years with a further 15 year option. China missed that one.

Finally, Tanzania’s Government has taken a step backwards in the development of regional tourism by withdrawing from the common East African visa scheme. This means more cost,- and hassle,- in travelling between Kenya and Tanzania, renewing a protectionist wrangle that has been going on since the collapse of the original East African Community in the 1970s when all but three or four road border crossings between Tanzania and Kenya were closed. Prime target was the direct road linking the Mara and the Serengeti , converting a journey of a few hundred yards into one of several hundred miles. Tanzania has always felt that it was short changed by tour groups tending to enter the area via Kenya rather than flying direct into Dar es Salaam or Kilimanjaro. The resentment runs deep.

John Williams

The power of a brand -2.

When Exeter based Jersey European were looking to re-brand in 2000 they did a survey on market perceptions of current airline performance. Among the the usual suspects they inserted British European, a name that morphed into British Airways from the the early days of  BEA's 1971 merger with  BOAC. Despite the fact that the name hadn't operated or existed since its last remnant BEA Airtours became British Airtours in 1974, British European came out as an excellent performer. That clinched the decision. Jersey European became British European on 1st April 2000 and the old BE flight designator was soon also acquired. 2002 then saw a complete relaunch and image change. FlyBE was born.

Footnote: There were no legal obstacles to Jersey European adopting the British European title. Although British Airways had retained the registration of the British European Airways name it had taken out no protection for British European on its own.

African Roundup June July 2016

LCC Fastjet is in the spotlight again. The new CEO is to be Nico Bezuidenhout, takes over on August 1^st ,migrating from his ten-year tenure as CEO of Mango, the SAA LCC subsidiary. He arrives when the company looking for more money and has raised US$19.7 million from a new share issue primarily for working capital. Cash has always been a problem. Since operations started in October 2012 net losses have climbed relentlessly to US$230.8 million. The anticipated rapid growth towards an Africa-wide network and a fleet of 30+ A 319 size aircraft has stalled. Now the rate of passenger increase has slowed dramatically. Has the true extent of the real rather than theoretical potential revealed itself? Maybe those original estimates were too optimistic,- at least at air rather than bus fares? This year load factors have dropped from 70% to 47% on the Tanzanian domestic routes. A current non-stop campaign of special offers is aimed at halting this slide. Market share growth would be step two.

The reasons for the dented dream are many but the location of Head Office, far from Africa, at Gatwick hasn’t helped. The local times might be similar but little else is and it doesn’t carry the same sense of "We're all in in together" purpose and commitment characteristic of most startups including the highly successful Easyjet. Early comments attributed to Nico Bezeidenhout have him thinking of relocating Head Office to an African address, possibly Tanzania. Likewise the fleet of 5 leased A319s could be to be replaced, but then a smaller jet such as an EMB 170/190 series may not have the hold capacity demanded by the African traders market in particular. The 6^th aircraft, an owned A319, purchased less than a year ago, is to be sold.  The new CEO will look at the network, the fleet, non-operational costs and the underlying business model.  With full support from the Board he should be able to avoid the frustrations experienced in his Acting CEO role at SAA where “60% of recommendations were never implemented”.

Over at Kenya Airways work has started on the challenging task of reducing headcount by a targeted 600 as part of the ‘Restoring Pride’ project to return the company to profitability. The first 80 have been given notice. Such action, successfully completed, is rare. The seldom very friendly pilots’ union, KALPA, has reacted by calling again for the removal of the CEO Mbuvi Ngunze plus the cancellation of all commercial agreements with shareholder KLM. It’s not clear which aspect of these excites the union’s attention or whether it is just a suspicion or dislike of foreign involvement in the company. Amongst other things they may not have noticed that Kenya Airways’ daily Heathrow slots have been sold to Air France/KLM and are now only held on leaseback . Based on protecting KLM’s Amsterdam routes and yields the Franco/Dutch company’s control of pricing on European routes can though be a problem and leave Kenya Airways uncompetitive in the market. KALPA have never been great enthusiasts about foreign employees on the flight deck either, normally insisting on any being confined to whatever is seen as the most junior fleet, thereby depriving some young Kenyan pilots of some invaluable experience early in their careers.  The pilot’s union is now again venturing beyond its obvious remit by demanding that foreign cabin crew, necessary to overcome language and cultural problems on eastern routes, are included in the redundancies.

In times of redundancies all staff are focused on who goes first and the likelihood, or not, of the payment of their terminal benefits and by whom, the company or in event of default by the government.  As staff numbers grow, lengths of service extend and those on legacy type scales which incorporate an automatic annual rise, the size of the terminal benefit burden eventually becomes daunting, leading to many long established airlines limping on for years quite unable to resolve the conundrum.

It’s never easy doing business in Nigeria. Now the country is throwing up fresh challenges to both foreign and local carriers. The June removal of the peg to the US Dollar has seen the Naira drop 30% in value against it. At the same time the fall in oil prices has reduced government’s revenue. The two combined have caused a shortage of hard currency. Foreign airlines are unable to remit local sales revenues and local airlines, never cash rich, are being squeezed by local suppliers of credit.  US$ 600m is said to be the current tally awaiting clearance with no short term likelihood of being released. Domestic carriers are pushing for fare rises of up to 50% to compensate. That won’t stimulate growth though. Emirates has removed one of its two daily services and Delta upped sticks and gone, deciding that continuing business in Nigeria, as well as losing money, is too much hassle and just not worth the candle. There isn’t a lot you can do with blocked funds and there’s a limit to how much an airline can spend locally by doing things like running its corporate conferences there to burn off money. Apart from anything else that’s going to be a hard sell back home.

But good news is there too. In West Africa, the Asky business model is maturing. A B787 in Asky colours is now flying across the Atlantic to Newark on shareholder Ethiopian’s Addis-Lome- Newark routing. Angola’s TAAG, now operating with some management assistance from Emirates including CEO Peter Hill has been removed from the EU black list and with the arrival of its 3^rd new B777-300ER is planning network expansion despite new challenges from the fallen oil prices. Zambia and Mozambique have also been removed from the list following challenging internal reorganisations. The Kenya Government has appointed a new Head of the Kenya Airports Authority, a Norwegian, who will bring welcome international experience. He has to force through further development of Nairobi’s main airport if it is to offer a simple, easy and attractive proposition to transfer passengers upon which it and Kenya Airways depend for a powerful route network to rival Addis Ababa or Johannesburg. He will also need to persuade all the relevant facilitation authorities operating at the airport to ensure a complete climate change so that it becomes a destination and transfer hub of choice to all passengers. It needs to look and feel like a Changi, a Dubai.... He won’t find life easy.

A bit to the north Ethiopian is to set up a local aerospace manufacturing facility in a joint venture with a South African company.

1.   EAST  AFRICA

Air Tanzania The Government has ordered 2 new Q400s from Bombardier probably for delivery to Air Tanzania, which it sees as its insurance against Fastjet’s withdrawal. The airline currently operates a sole Dash8-300.

Ethiopian Airlines’ upwards trajectory continues and Cairo is replaced by Malta on westbound Madrid B737-700 flights, the east bound returns being nonstop.

 The wide body fleet is expanded and diversified the delivery of the first two of 14 A350-900s. These are expected to appear on the London route in August.

A possible new investment is one in Kinshasa-based Congo Airlines to finalise its long search for a West Central African strategic partner.

A fourth weekly flight to New York Newark via Lome, Togo is slated for August 5^th.

On the engineering side a MOU has been signed with AeroSud, South Africa, to form a joint aerospace manufacturing company, to be based in Ethiopia, to provide parts for Boeing, Airbus and others. This would be a genuine expansion of Ethiopia’s manufacturing base and just the sort of high value business any developing country wants.

Fastjet PLC. Talks are underway with China’s HNA exploring a possible strategic investment. Depending on how you see it to some that would mean a stranglehold but it has obvious short term attractions, namely money. It is certainly in line with Chinese Government thinking about expanding its influence in Africa across as many spheres as possible. That’s fine but however cuddly the inaugural banquet and hospitality it’s all about business, not love. Even the UK is finding that with threats of repercussions on relations if they back off the proposed very expensive Hinkley Point nuclear power station deal with China (and France).

Jambojet (Kenya Airways’ LCC subsidiary) will take over parent Kenya Airways’ twice daily Nairobi-Malindi services on 1^st August. KQ will codeshare. That makes a lot more sense than the early 2000’s operation of Malindi and domestic services other than to Mombasa by its first Low Cost subsidiary venture, Flamingo. Amongst other things, that involved a standalone reservations system which didn’t talk to Kenya Airways main reservations one so didn’t permit codeshare or interlining. The use of a pair of Saab turboprops a long way from any others didn’t help either. This looks like another step in the the original 2014 strategy for Jambojet to gradually assume responsibility for all domestic and nearby cross-border operations. 

Kenya Airways The retrenchment of 600 employees has started with the first 80. This is despite fierce opposition from some politicians, seeking to fight various corners, and the unions fighting the usual ones.

Flights to Juba, South Sudan were temporarily suspended due to an outbreak of political unrest and violence but have now resumed and three new weekly services have been started on the Nairobi-Entebbe-Bangui route.

Precision Air is to launch 3 weekly ATR services to Hahaya (Comores) on 16^th August.  The route was dropped in 2014. Dar es Salaam has had historic air links with the islands originally with a weekly Air Comores Nord 262 turboprop in the 1960s. In the 1990s a F27 did the honours.    

Rwandair takes delivery of its second new A330-200 in September. It plans to use the pair firstly to replace 737-800s on its four weekly non-stop Kigali-Dubai nonstops and three via Mombasa, the latter utilizing existing 5^th Freedom rights. The Mombasa call is aimed much needed expat tourists from the Gulf and for Kenyan coastal traders who dislike the hassle of the domestic/ international/ domestic transfer at Nairobi. A Kigali-Mumbai-Guangzhou route will follow. Other Nairobi-avoiding options from Mombasa which must cause frowns from Kenya Airways are provided by Turkish (6 weekly) and Ethiopian (double daily). Oman Air briefly flew a 737 link with Muscat, codeshared with Kenya Airways, between 2002 and 2004.

In common with other carriers flights to Juba, S Sudan were suspended briefly in June due to an outbreak of political unrest and violence.

2.   SOUTH / CENTRAL AFRICA

Air Zimbabwe hit back at Fastjet Tanzania’s Dar es Salaam A319 services with the 4th June launch of thrice weekly A320s. The Zimbabwe Govt acquired two of these aircraft from China Sonangol in 2012/3.

Congo Airways (DRC) has gained its AOC enabling international services to begin .Possible IATA membership could follow subject to IOSA achievement.

LAM withdrew from Luanda on 1^st July citing ‘financial and operating difficulties’. They join United and Iberia in leaving Angola due to the current hard-currency remittance problems caused primarily by the recent fall in oil prices. As noted above, airlines are less and less willing to put up with the problem of blocked funds and are prepared to flex their muscles by saying to governments “If you want the air links with the world we have to be able to make money here”.

SAA’s Merrygorounds continue. CEO Dudu Myeni suspended the Head of Human Resources, Thuli Mpshe on 5th May.  That leaves them without a substantive CEO, Chief Financial Officer, Chief Commercial Officer, Chief Strategy Officer and Head of HR. That does make for easier and shorter top team meetings and simplified decision making processes but it does have some downsides. Mango CEO, Nico Bezuidenhout, left to to join Fastjet as CEO on 1^st August.

 Pointe Noire to Johannesburg via Brazzaville services began on 31^st July.

Oh, and there went another one, Treasurer, Cynthia Stimpel, was suspended  pending a misconduct charge investigation.

Meanwhile over in the Finance Department the appointment of a ‘boutique financier’ to restructure and source funds to cover USD1.1billion of debt has been withdrawn.  Breaches of procurement procedures are being investigated. The US$18m success fee is also under question.  Government has extended its deadline for submission of the 2014-15 financial results until 5 September this year. 2016’s first quarter net loss announced as US$99.6m. 

Skywise (S Africa) LCC plans to re-launch itself before end of this year. Flying was halted in Oct 2015 due to outstanding debts.  An unidentified new investor has been found. 

TAAG (Angola) has been removed from the EU ‘black list’ and is considering adding Paris, Frankfurt and London to its existing Lisbon route.  Tight bilaterals restricting most other end carriers to 2-3 a week protect TAAG by keeping capacity tight. The third of three new B777-300ERs has arrived.

3.   WEST AFRICA

Air Côte d’Ivoire is launching services to Nouakchott ,Bangui and Bamako via Bouake in November.

Arik Air (Nigeria) has ordered eight B737Max.

ASKY (Togo) has declared a 2015 US$4m ‘net profit’. This is the first since operations were launched in January 2014. Ethiopian Airlines is 40% shareholder and holds a management contract. Can Ethiopian pull of the same sort of result on the other side of the continent for its other but seemingly inert investment, Malawian?

Camair-Co faces re-possession of its 2 leased B737-700s due to outstanding payments. In March one aircraft was impounded at Paris for ‘contravention of lease payment terms’. 

Possibly to avoid similar embarrassments, the Cameroon CAA has restricted its AOC by excluding the European zone

As a further cushion A ‘capital injection’ of US$10m has been made by Government, the sole shareholder, to facilitate fleet and network expansion.  Boeing Consulting has prepared a 2016-2019 Turnround Plan.  The current fleet is 2 B737-700s, 2 MA60-600s and a single B767-300ER. 2 B787s are on order.

Dana Air (Nigeria) Pilots have been on strike over a pay and allowances dispute. Another sign of discomfort has been the dropping of what should be the successful Lagos-Accra route just nine months after launch. This takes the carrier back to being a domestic operator only. 

Med-View Airlines (Nigeria) a Kano-based carrier has taken delivery of a B737-500 with another 2 to follow in July. No doubt encouraged by Emirates dropping its second daily Lagos service, the delayed launch of its Dubai route is imminent.

Overland Airways (Nigeria) a Lagos-based domestic carrier has secured its IOSA certification. The fleet largely consists of ATR42/72s.

4.   NORTH AFRICA

Air Algerie has added Porto as the end point to current Algiers-Lisbon flights.

EgyptAir has ordered 8 B737-80s from Boeing.

Nile Air (Egypt) planned to start Cairo – Istanbul, Sabiha Gokcen, A320 services on 8^th July.

Nouvelair (Tunisia) launched A320 Tunis-Algiers flights in July.  Primarily the privately owned carrier, founded in 1989, is a charter operator with a current fleet of 9 A320-200s. Several are leased out.

 5.   NON-AFRICAN AIRLINES

Emirates added a third Dubai-Cape Town frequency, all with B777-300ERs in July. This adds to its 4 daily services to Johannesburg and once daily to Durban.

Iberia withdrew from Luanda on 1^st June.

Lufthansa will upgrade its current its Nairobi thrice weekly 3 class  B737-700 operated by Privat Air, Switzerland to 4 weekly with A340-300s on 3rd September. The route, was once flown with classic 747s en route from Frankfurt to Johannesburg until the arrival of the 747-400 in the early 1990s eliminated the need for a Nairobi stop. Terminating A 300s then took over until the route was closed. It was relaunched in October 2015. Historically most of the bulk demand on routes between Kenya and Germany has been by tourists primarily headed for Mombasa.

 Qatar Airways is launching its Qatar-Windhoek route in September.

TAM (Brazil) plans to start Sao Paulo-Johannesburg services in October.  South American carriers have been absent on the continent since the demise of Varig in 2006. At various times Varig operated to Dakar, Abidjan, Luanda, Maputo, Johannesburg and Cape Town and was highly regarded for its on board service.

Turkish Airlines will establish another African tentacle in September with a Istanbul-Conakry-Ouagadougou route.

MISCELLANEOUS

AFRAA Sec. Gen., Elijah Chingosho, says Nigeria, Egypt, Morocco, South Africa, Rwanda and Zimbabwe have targeted the creation of a single air transport market by the end of 2017.

Ghana is inviting prospective airlines strategic to submit an expression of interest the creation of a new joint venture national airline. Submissions have to be in by the end of the year.

IATA and African Union have signed a MoU to expand strategic cooperation to further the continent’s economic and social development with the benefits of safe, efficient and sustainable air transport in Africa. That’s the declaration of intent and as it stands nothing new. The proof of the pudding would be cohesive action to run with it and implement the philosophy.

Kenya The Government Transport Secretary has appointed a Norwegian, John Anderson, to head up the Kenya Airports Authority. The main task here will be to get a grip on Nairobi’s main Jomo Kenyatta Airport, sort out a real plan for it to function as the hub airport Kenya and the airlines need it to be. Some swift successes are needed to show a) He’s serious and b) He is allowed to do what needs to be done and c) to ensure that irreversible changes for the good are in place before for one reason or another he leaves the job. The last twenty years have seen aid funds come and go with little to show for it, and an entirely new, albeit badly placed and not ideal for hubbing terminal for Kenya Airways and friends designed and contracted for and then (recently) cancelled. Meanwhile facilitation, operated by the staff of all the various authorities and security contractors, needs to be sorted out from top to bottom so that the whole place becomes smilingly user friendly to everyone who passes through. Nairobi’s airport has to be a destination and transfer point of choice, not one to avoid. We wish Mr Anderson well.

Mauritania Nouakchott,-Oumtansy International Airport was opened on 29^th June in time to welcome delegates to the July Arab League summit. It is 25kms from the city centre.

South Sudan Civil unrest and fighting forced the closure of Juba Airport. Kenya Airways, Rwandair and Ethiopian Airlines scheduled services suspended and then resumed within 2 days for evacuation flights only. A subsequent ceasefire between the fighting factions allowed more regular services to be resumed. It may be a niche market but yields are good as would be expected in an area of unusual but persistent difficulties.

Somalia’s Government ordered the cessation of flights between Mogadishu and Hargeisa, capital of the autonomous Somaliland region due to increased political tension.

Uganda’s Government has again mentioned re-launching failed Uganda Airlines using government funding plus US$300m from investors though who those may be isn’t clear. The original, state-owned, debt-ridden carrier was liquidated in 2001.

Zambia has been cleared from the EU ‘banned list’ as has Madagascar. The EU now offers technical assistance to countries working to improve safety oversight.

-John Williams-

The power of a brand-1.

 Under the heading of "Late running flights delay millions of passengers" the Times yesterday quotes a "Which " report  that Vueling, Loganair and Aurigny ( the two latter operating small aircraft in bad weather prone environments and in Loganair's case often around aircraft unfriendly terrain) as having the highest percentage of delays of three hours or more to short haul flights. What rogues. Virgin had no such delays. Good for Virgin. They don't now  have any short haul flights either.

Turkish Flavours-2

The slipstream from Turkey 's attempted coup is leaving some casualties in its wake, 60,000 military, government, academic,public sector and journalistic imprisonments, sackings or suspensions are a lot especially when almost certainly only a relatively small number were really involved.

There is an inevitable suspicion that the opportunity is being taken to cleanse from all key areas those who might not care for the country's leader and/or the direction he is taking . Now the national airline ,- currently the world's fastest growing,- has been hit along with the rest. It's CFO is one of those dismissed.

The vulnerabilities of the new mega hubbers' home bases are obvious but have always looked centred on potential security rather than management issues .Late coming Turkish seemed the least likely to run into problems.

Right from the beginning of the airline business the dead hand of governments' ambitions to control every aspect of traditional legacy carriers' activity has loomed over their ability to truly fly. Conservatism and protectionism stalked the skies. Privatisation and liberalisation has solved the problem for many but those still under actual or mental state control continue to struggle to break free of former bad habits and outlooks.

.Then came the wave of national carriers owned by newly independent countries. These took wing from the late 1950s/early 1960s. Government interventions ranged from appointments to where and how they should fly and with what equipment.. At one end of the scale Malaysia Airlines was rendered hopelessly unprofitable by having to operate an extensive domestic network at uneconomic fares and at the same time provide global links for which there was little demand from Kuala Lumpur. At the other end have been some African minnows with a handful of aircraft of varying types but larger management car fleets headed by a succession by appointees favoured by Presidents or other political leaders.

 Until now Turkish has flown above any of these clouds and grown spectacularly.

Hopefully the current hiatus will be temporary and the geographically well placed airline will be left to get on with running and further developing its business with full government understanding and above all hands-off support. In a show of strength this airline has managed its recent external disruptions very well. It has flown as much of the daily plan as possible regardless of the terrorist attack at Istanbul airport and the wider ranging coup attempt .The ability to recover from setbacks swiftly is a good sign.