African Roundup   August - September 2018

Nigeria Airways has been stopped in its tracks.   The project to launch a new national carrier, announced in July and scheduled for launch this December, has been ‘suspended’ by Government.  No reason or qualification has been given. It seems reasonable to interpret ‘suspended’ as ‘cancelled’.   Why?  With much fanfare and supporting PR activity the project was announced at this year’s Farnborough Air Show with negotiations for an initial 5 aircraft fleet of B737Max and A330s.     Start-up capital needs were estimated to be USD300m, spread over 3 years.   USD300m, if an accurate amount, becomes even more substantial when early years’ operating losses are added plus other ‘contingencies’.  Could it be that, for perhaps the first time, a government faced with such a decision has decided the costs are too high and the benefits too questionable.  If so, it just might prompt other governments to review their plans for new national carriers.  In April next year a reborn Uganda Airlines is to take to the skies.  Each month the date slips a little but 4 new CRJs have been ordered for 1Q2019 delivery even though discussion continues within Government on the source of the finance and the scale of benefits.  Likewise, a reborn Zambia Airways is scheduled for launch in January next year in a joint venture with Ethiopian Airlines.  As a first step the Zambian Government must fund its 55% shareholding in the USD30m venture.  And this at a time when Zambian indebtedness to foreign countries is ballooning and the recent cancellation of all aid by the UK and others might suggest that a new national carrier is not a priority……

Ethiopian Airlines’ expansion continues apace – revenue growth, fleet expansion, aircraft maintenance facilities and the imminent opening of much improved passenger facilities at Addis Ababa, is an impressive achievement.  The CEO has described 2017-8 as ‘a notable year’ with 46% revenue growth and fleet expansion passing the 100 aircraft total.  He forecasts continued ‘fast growth’ for this year.  Support for new carriers across the continent will continue, for example, the recent agreement for joint development of new Tchadia Airlines to be based in N’Djamena.  Investment in Djibouti Airlines is also under discussion.  CEO Gebremariam explains this expansion of links with other local carriers as ‘acting in line with the AU’s goals for greater economic integration’.

The merging of Kenya Airways and Nairobi’s Jomo Kenyatta Airport (JKIA), already approved by Government, continues under discussion. The current proposal is for the creation of a Holding Company, to be managed by Kenya Airways, being granted a 30 year concession to run the airport.  All current JKIA staff will transfer to the new company.  The stated objective of the move is to improve the airline’s competitive position in relation to the Gulf and other foreign carriers. The degree of influence Kenya Airways might have over the granting of traffic rights to it’s competitors could be contentious.  Fastjet’s recent experience has been salutary.

Government has moved against Air Zimbabwe.  Current debt is estimated at US$320m.  The Board has been sacked and a caretaker administrator appointed; Chartered Accountants, Grant Thornton. CEO Joseph Makonise remains in place in addition to his existing management team.

And back to Nigeria…  just days before Government pulled the plug on Nigeria Air, Air Peace placed an order with Boeing for 10 new B737-Max8s.  They have also recently received 2, currently unutilised B777s.   An expanded regional and international operation seems likely.

EAST AFRICA

Air Tanzania anticipates delivery of its second B787-8 in 2020 followed by the launch of London services shortly thereafter.  (Aug 2018)

Air Tanzania at the end ofAugust launched Dar-Kilimanjaro-Entebbe 4pw Q400 operations plus 3 weekly on a Dar-Kigoma-Bujumbura route. (Aug2018)

Eritrean Airlines follows Ethiopian Airlines and launches 3 weekly Asmara-Addis flights while  Ethiopian has rapidly increased from once to twice to daily.  Govt-owned Eritrean has struggled over the past 15 years flying an ever-changing single aircraft fleet.  A single leased B737-300 currently operates to Cairo, Khartoum and Addis. The EU ‘Black List’ applies. Talks are underway on the possibility of Ethiopian taking a stake. (Aug2018)

Ethiopian Airlines reports 2017-18 as a ‘notable year’ with operating revenue up 46% and the fleet passing the 100 aircraft mark.  Continued ‘fast growth’ is forecast for 2018-19 boosted by the opening of ‘newly expanded and significantly upgraded’ Addis Ababa passenger terminals at the end of this year. (Aug2018)

Ethiopian Airlines eff Oct is to switch from Barcelona to Lisbon as the beyond point for 4pw Madrid services.  (Aug 2018)

Ethiopian Airlines is planning increased ops to China including additional Guangzhou frequencies.  Shenzen is a likely new destination.  (Sep 2018)

Kenya Airways is in talks to enter a 30yr concession contract with Kenya Airports Authority (KAA).  A new holding company, to be 100% owned by Kenya Airways, will own and manage Nairobi Airport.  The rationale is to ‘enable the airline and the airport to better compete with Gulf carriers and Ethiopian Airlines’.  (Aug 2018) 

Kenya Airways CEO talks of flight crew shortages resulting in part from the imminent return of the 5 777s sub-leased to Oman Air and Turkish Airlines plus annual growth of routes and fleet. Contracted foreign crew already licensed on the 777 are possibilities are being considered but likely to be opposed by the pilots ' union.

Kenya Airways stops ticket issues in Zimbabwe due to remittance problems arising from Zimbabwe foreign currency shortages.   (Sep2018)

National Airways (Ethiopia) launched 3 weekly, ERJ145s on  Addis Ababa – Mogadishu plus services to Puntland capital, Garoowe.  (Aug 2018)

Uganda Airlines Government has officially launched the new airline. The Minister of Works and Transport says that US$1.2m cash deposits have been made to purchase 4 CRJ900s (delivery 1Q 2019) and 2 A330-800neo (delivery 4Q 2020).  An Interim Board and management team have been appointed and Cabinet has approved a business plan.  Launch of operations meanwhile has slipped to Mar/April 2019.  (Aug2018)

SOUTH / CENTRAL AFRICA

Air Zimbabwe Government sacks the Board and appoints Grant Thornton, Chartered Accountants, as caretaker administrator. The existing management team under CEO Joseph Makonise remains in place. The estimated debt is USD320m. (Aug2018)

Fastjet Zimbabwe adds a 4^th Embraer ERJ145 to the fleet, leased from shareholder Solenta. (Sep2018)

Proflight (Zambia) wet leases a B737-500 primarily to meet Lusaka-Ndola demand levels.  Acquisition of a Dash 8-300 is also confirmed. Present fleet; 3x Jetstream J41 plus a CRJ100. (Aug 2018)

SAA plans launch of  a Jo’burg – Maldives route in December  (Aug 2018)

SA Airlink plans to open Jo’burg – Libreville .  (Jul2018)

SA Express Siza Mzimela, one time SAA CEO (2010-12) and founder of domestic carrier Blue Crane Aviation, is appointed as Acting CEO.  (Aug 2018)

SA Express as operations resume after the May cancellation of its AOC the carrier again seeks a capital injection from Govt, this time US$123m.  (Aug  2018)

TAAG (Angola) Has increased Luanda-Maputo frequencies mfrom 3 to 5 weekly, B737-700 (Aug 2018)

Zambia Airways re-launch is delayed to Jan 2019.  Ethiopian has signed the US$30m joint venture agreement. Ethiopian with 45% and the Zambian Govt 55%. Launch fleet will be 3 leased aircraft from Ethiopian Airlines rising to 12 aircraft by 2028. An initial regional network will be followed by international routes.   (Aug2018)

WEST AFRICA

Africa World Airlines (Ghana) might see Chinese ARJ21s enter the fleet with parent company, Hainan Airlines Group, leading the discussions.  he current fleet is

6 ERJ145s  (Sep 2018)

Air Peace (Nigeria) added daily Lagos-Kaduna ERJ145 flights to its Air Peace Hopper network. An eventual fleet of 6 ERJ145sis planned.  (Aug2018)

Air Peace (Nigeria) has ordered10 B737-Max 8s.  (Sep2018)

Air Senegal plans launch of Dakar-Paris services from Feb 2019 following delivery of the first of 2 A330-900s ordered in Jan this year.  (Sep 2018).

Dana Air Nigeria adds a B737-700 on wet-lease from Asky under an aircraft partnership agreement.  (Sep 2018)

Dana Air (Nigeria) The Nigerian CAA, eff 2 Sep, suspended the AOC ‘to carry out investigations’.  24hrs earlier an MD83 had left the runway on landing at Lagos. There were no survivors from the 153 souls on board.  (Sep 2018)

Nigeria Air  Govt stops development work on the proposed start-up. Aviation Minister, Hadi Sirika, has announced that “the Federal Executive Council has taken the tough decision to suspend the National Carrier project”.  No reasons have been given.  The launch announcement was made 2 months ago, in July with the date set for December this year.   (Sep2018)

PassionAir (Ghana) Start-up has taken delivery of the first of 3 Q400s. Accra-Kumasi flights are imminent as is the delivery of the second and third aircraft.  The domestic network will be expanded progressively to include Tamale and Takoradi.  (Aug 2018)

Senegal Airlines Government has appointed ex-Airbus executive Philip Bohn as Director General to head-up the launch the new company.  Start-up is scheduled for 9 Dec to coincide with the opening of Dakar’s new airport.  2x ATR72-600s will operate a domestic schedule. The later delivery of 2x new A330neo ordered in 2017 will enable regional ops plus Paris.   (Aug2018)

Tchadia Airlines (Chad) new national carrier to be launched in October with Ethiopian Airlines holding 49% and the Chad Govt 51%.  Initially 2x Q400, from Ethiopian, will link 4 domestic points plus nearby regional links. Toumai Air Chad operated domestic and regional flights from 2004 until its grounding in 2012.  (Aug 2018)

NORTH AFRICA

Air Algerie eff October is to launch Brussels ops plus, in December, both Algiers-Libreville and Doual, all with B737s. (Aug 2018)

Royal Air Maroc anticipates delivery of the first of 4 B787-9s in December plus the first of 4 B737-8s before year end.  Casablanca - New York, in December, is to be the first B787-9 route followed by Miami in April 2019. Montreal and Sao Paulo are also mentioned.  (Aug 2018)

Tunisair The signing of an EU ’Open Skies’ Agreement is anticipated before the end of this year.  The heavily protected, over-staffed, state-owned carrier complete with militant trade unions, is ill-prepared to compete with European LCC operators. As a result the reduction of 1200 staff is being discussed.  Expansion of intra-African routes is being pursued with Khartoum and Douala to come on-line before year-end.  6 additional aircraft are planned to be leased during 2019. (Aug2018)

NON-AFRICAN AIRLINES

KLM eff Dec is to drop recently added Freetown and Monrovia from the network in December.  (Sep2018)

Qatar Airways plans a December launch of 4 weekly, A320 ops, Doha-Mombasa. It should have immediate appeal to anyone who has had the hassle of transferring from international to domestic or vice versa flights.  (Sep 2018)

Turkish Airlines plans December launch of 2 weekly Lusaka frequencies via Dar es Salaam (without local traffic rights).  Also to come on line is Marrakech (Aug2018)

MISCELLANEOUS

Ghana the process of establishing a new national carrier is “far advanced” with Ethiopian, Air Mauritius and Abu Dhabi Aviation and local African World Airlines each bidding to be the strategic partner. Securing FAA Cat1 status enabling direct Ghana-USA flights is a priority.   (Aug2018)

IATA states that since January it has successfully released more than US$500m of airline funds trapped in Africa.  (Aug 2018)

Kenya congestion at Jomo Kenyatta and Wilson, the 2 Nairobi airports, has prompted the KCAA to consider a freeze on new carriers.  This is the price of several large developments at Jomo Kenyatta having been announced but not moved into a construction stage over the last twenty years. Wilson has never had a coherent plan, each operator being left to build its own terminal facilities. Immigration remains in the confined space where it has been since at least the 1950s. (Aug 2018)

Kenya Govt plans discussions with low-cost airlines such as Ryanair (Ireland) and EasyJet (UK) to begin flying to the country. How that chimes with its apparent lack of enthusiasm for Fastjet isn't clear.

Zambia has signed a sales agreement for a single VIP configured SSJ100.  Talks for a further 4 passenger configured SSJ100s continue.  (Sep2018)

JOHN WILLIAMS- SEPTEMBER 2018

African Roundup    June - July 2018

Air Tanzania’s fleet upgrading continues.  The last of 3 new Q400s arrived in March followed by the sole B787-8 early in July.   Within days the B787 was operating Dar-Kilimanjaro-Mwanza-Dar triangles to build crew hours and landings and to delight passengers. Its full capability will be exploited with Mumbai services planned for a September start.  The arrival of 2 new CS300s later this year – the first for Africa - will complete the upgrade. Profitability is now expected by 2023.

The next few months will see several longhaul network expansions by African carriers.  In addition to Air Tanzania’s Mumbai opening, Kenya Airways is to start their long-awaited venture to New York. Rwandair plans also to add New York, plus Guangzhou.  Slightly less visible will be Ethiopian’s introduction of a Moscow routing via Istanbul.  Meanwhile non-African carrier Etihad has announced its imminent withdrawal from Dar es Salaam. The welcome result: African carriers, plus 4; Others, minus 1.

The rebirth of several dormant carriers is close.  Also the re-creation of carriers in some of the continent’s smaller countries.  The 2002 collapse of Air Afrique created many ripples throughout the Francophone area, likewise the post-independence troubled childhood of new national carriers in Anglophone countries.  Ethiopian Airlines has stepped in to fill voids on maps. Its Vision 2025 ‘Multiple Hubs in Africa’ strategy already has several visible successes, eg, ASky in Togo, Malawi Airlines and Ethiopian Mozambique Airlines.  To these will shortly be added a new Zambia Airways for launch in October.  Plus, agreements have been signed with Guinee, Chad and Djibouti for help in forming new airlines.  Uganda Government has established a new Uganda Airlines and signed for CRJ900s and A330-800s for delivery in 2019 onwards.   Lastly the Nigerian saga following Arik Air’s problems has reached a conclusion with Government announcing the creation of a new national carrier, Nigeria Air, in which it will hold just 5%.

Problems in South Africa continue, this time with state-owned SA Express. As with SAA, its financial problems are profound resulting in a capital injection being sought in early May.  But within days the problems escalated. The SCAA, following an audit, identified ‘serious safety concerns’ and withdrew the carrier’s AOC and other approvals, effectively grounding it.  Revenue dried up.  SAA, Mango and Airlink cobbled together replacement schedules and Government met outstanding salaries.  By end July, a new AOC had been granted and several aircraft had passed inspections allowing limited ops to be resumed.  Others, presumably, will follow.  Any effect on passenger confidence will then be visible.   Government has initiated the merger of SAA and SA Express. Bringing them both within the remit of the Public Enterprise Department - for now SAA reports to the Treasury – is the first task.

Fastjet too continues to suffer financial difficulties.   The relocation from Gatwick to South Africa plus restructuring is reported as proceeding well but at a cost.  The June available cash balance was revealed as being just USD1.55m.  Shareholders responded with an additional USD10m, sufficient for operations to continue to year-end.  A revenue boost from the imminent launch of domestic South African operations was pledged in return.

And … IATA statistics show that for the 3 months to Mar 2018 African passenger traffic rose at a world leading 12.7% year on year.

EAST AFRICA

Air Tanzania Eff 29 July B787-8 ops were launched.   Training and familiarization will be completed on Mwanza and Kilimanjaro routes with Mumbai ops planned for Sep. Discussions with Boeing on the possible delivery of a second aircraft are underway.  Arrival of the 2x new CS300 is anticipated before year-end.  (Jul 2018)

Ethiopian Airlines eff Nov plans launch of Addis-Istanbul-Moscow ops (Jun2018)

Ethiopian Airlines sole shareholder, the Ethiopian Government, signals it is prepared to sell a minority shareholding in various sections of the Ethiopian Airlines Holding Group.  Share sales in the airline itself are unlikely. Its profitabilty makes it source of capital for growth, says the CEO.   (Jun2018)

Ethiopian Airlines eff 17 July and after a gap of 20 years restarts ops to Eritrea, daily to Asmara, increasing to double-daily eff 28 July,  B737-800.  (Jul2018)

Ethiopian Airlines drops the idea of a new 100-seat fleet.  Rapid regional market growth will instead lead to increases in the B737 fleet.  (Jul 2018)

Kenya Airways looks to expand African regional ops including the possibility of closer relationships with SAA and Ethiopian.  (May 2018)

Kenya Airways increases Cape Town capacity to 10pw with 3pw non-stop ops.  The daily ops route via either Livingstone or Victoria Falls. (Jun2018)

Kenya Airways may possibly be merged with Kenya Airports Authority.  Cabinet has approved the proposal by Kenya Airways Chairman.  Rwanda and Ethiopia are cited as successful examples of such linkages.   (Jun2018)

Kenya Airways having considered selling its 3x B777-300 on return from sub-lease to Turkish Airlines the idea has overturned the idea in favour of boosting ticket sales as the path back to profitability.  The first B777-300 will return in September. (Jun2018)

Kenya Airways plans to launch New York services eff 28 October.  (Jul 2018)

Kenya Airways is to drop Jeddah from the network eff September. (July2018)

Rwandair will add 2x A330neo plus 2x B737Max8 during 2019.  New York and Guangzhou ops are being planned for the first half of the year. The 2x CRJ900 will leave the fleet. (Jun2018)

Uganda Airlines Government has officially launched the new airline.  The Minister of Works and Transport says that USD1.2m cash deposits have been made to purchase 4x CRJ900 (delivery 1Q2019) and 2x A330-800neo (delivery 4Q2020).  An Interim Board and management team have been appointed and Cabinet has approved a business plan.  Launch of ops meanwhile has slipped to Mar/April 2019.  (Jul2018)

SOUTH / CENTRAL AFRICA

Air Botswana places firm orders for 2x ATR72-600 for delivery later this year.  Other fleet renewal steps, eg replacement of the 3x ATR42-500 in service for more than 20years, remain unclear.  Earlier this year the acquisition of an Emb170 was mentioned as was the pending launch of yet another attempt to privatize or find a strategic partner, also remain unclear.  (Jul2018)

Air Namibia again looks to West Africa for revenue growth and plans 29 June launch of Windhoek-Lagos-Accra, 4pw, A319 ops.  (Jun  2018)

Angola Express The State President vetoes the formation of the putative new carrier announced in February planned to serve a domestic network with a Bombardier turbo-prop fleet with mixed public and private financing. (Jun2018)

Fastjet sought shareholder support for additional funding revealing a current cash balance of USD3.3m of which USD1.75m is trapped in Zimbabwe. USD10m was provided enabling operations to continue to year-end. In return the company offered the prospect of domestic South African ops starting in ‘first quarter 2019’.  These will be covered by a licensing agreement with FedAir of Durban who operate domestic routes to 10 destinations. (Jun 2018)

Fastjet (Zimbabwe) eff 20 July launched daily Emb145 ops Harare-Bulawayo with additional frequencies being planned.  Other Zimbabwe routes link Harare-Jo’burg 4 per day, Harare Vic Falls 2 per day and Vic Falls-Jo’burg 3 per week. (Jul2018)

flyafrica.com Zimbabwe AOC withdrawn by the ZCAA. Ops ceased in Dec2015. (Jun2018)

LAM A lack of cash for the purchase of fuel caused flight cancellations including one on which the President of the nation was to travel.  He promptly sacked the Board. The company is in financial distress with reports not filed since 2010.  (Jul2018)

Malawi Airlines eff 15 July launched daily B737-700 ops Blantyre-Lilongwe-Dar es Salaam. (Jul2018)

SAA  Musa Zwane, acting CEO for two years until being placed on leave in November 2017 has been fired for financial dishonesty. So too, CFO, Phumeza Nhantsi. (Jun 2018)

SAA is ‘working closely’ with Ghana in evaluating potential traffic rights for Accra-London adding to the current Accra-Washington ops.  (Jun2018)

SA Airlink is to add a second weekly service to St Helena for the Dec to Apr 2019 period.  An extra service will be added to the once every 2 weeks extension to Ascension Island over Christmas/New Year.  The ETOPS E190 ops route Jo’burg-St Helena outbound with a Windhoek tech stop but non-stop inbound.  (Jul2019)

SA Airlink is evaluating possible Jo’burg – Libreville ops.  (Jul2018)

SA Express Govt provides funds for staff salaries as a new AOC is sought to enable ops to restart. The SACAA withdrew the AOC on 24 May citing ‘serious safety concerns’ thus grounding the carrier. (Jun 2018)

SA Express is to be merged with SAA, says Public Enterprise Minister Pravin Gordhan, with both to be under the authority of the Dept of Public Enterprises.  Currently SAA falls under the Treasury and Public Finance.  (Jul 2018)

SA Express  The SCAA reinstates the carrier’s AOC and AMO withdrawn in May.  Following inspections two of the nine non-compliant aircraft precipitating the grounding have received new CoAs. Aircraft inspections continue. (Jul 2018)

Zambia Airways is on schedule for re-launch on 24 October in a USD30m joint venture with Ethiopian Airlines, Ethiopian Airlines (45%) and the Zambian Govt (55%). Launch flee will be 3x leased aircraft from Ethiopian Airlines.  (Jul 2018)

WEST AFRICA

Africa World Airlines (Ghana) talks of adding an EMB190 to the fleet to meet Accra-Lagos demand.  The current frequency is 5 p/day with ERJ145s. (Jun2018)

Air Burkina (Burkina Faso) has taken delivery of the first of 2 wet-leased CRJ900s with the second to follow later this year.  Government is now the sole shareholder The Aga Khan foundation sold its 88% shareholding last year.(Jun2018)

Air Côte d’Ivoire eff 2 Aug plans launch of Abidjan-Bouake-Bamako ops providing the first cross-border flights from the central Ivorian region city.  (Jun 2018)

Air Peace (Nigeria) eff 6 Aug is to launch 4 p/w ops to both Abuja-Accra and Abuja-Freetown.  Current operational fleet is 13x B737-300/500.  (Jul2018)

Cabo-Verde Airlines Government targets end-2018 for successful privatisation.  The current management contract with Icelandair is not to be renewed.  (Jul 2018)

Camair-Co Has extended Abidjan ops to Dakar and plans imminent launch of ops to Lagos and Bamako (Jun2018)

Ceiba International (Equatorial Guinea) eff 26Jun extended Malabo-Abidjan ops to Dakar  (Jun 2018)

Max Air (Nigeria) eff 12 July commenced daily ops from Kano to Abuja and Lagos with a fleet of 3x B737-300.  A wider domestic network is planned.   Charter ops continue with its fleet of 4x B747.   (Jul2018)

Nigeria Air  The new national carrier, as announced by Government, to be owned and managed by the private sector.  Government will hold 5%. Target launch date is December this year with an initial 5 aircraft fleet of B737Max and A330s. The finance partner has yet to be secured as have the AOC and other regulatory approvals.   Start-up capital needs are estimated to be USD300, spread over 3 years.   The original Nigeria Airways collapsed in 2003.  Virgin Nigeria survived from 2004 to 2009.  (Jul 2018)

Overland Airways (Nigeria) Lagos-based domestic carrier plans imminent entry of regional ops to Lome, Niamey, Cotonou with 9 strong fleet of ATR42/72 and Beech 1900Ds. (Jul 2018)

NORTH AFRICA

Royal Air Maroc anticipates delivery of the first of 4x B787-9 in December plus the first of 4x B737-8 before year end.  Casablanca - New York, in December, is to be the first B787-9 route followed by Miami, Montreal and Sao Paulo.  (Jul 2018)

NON-AFRICAN AIRLINES

Etihad eff 30 Sep will drop Dar es Salaam from the network echoing the withdrawal from Entebbe 3 months ago.  (June 2018)

Oman Air eff Jul 2019 plans launch of 4pw Muscat-Casablanca B787-8 ops (Jun2018)

Turkish Airlines plans end-2018 launch of Marrakech ops. (Jun2108)

MISCELLANEOUS

Gabon Govt discusses with Saudi-based Nexus Aero the completion of a feasibility study for a new national airline. The original Air Gabon collapsed in 2005.  (Jul2018)

Libya  Work continues on the rebuilding of badly damaged Tripoli Airport, closed in 2015. Italian companies have been contracted for the USD93m project. (Jul2018)

Zimbabwe Govt is to merge Air Zimbabwe and putative Zimbabwe Airlines with its ex-Malaysian 4x B777s.  Details vague. (July 2018)

Zimbabwe Govt commissions a USD154m, 3 year, project to upgrade Harare’s Robert Mugabe International Airport.  A Chinese concessionary loan will finance.  (Jul 2018)

JOHN WILLIAMS  August 2018

Emirates gives Stansted a real long haul network.

Emirates' addition of Stansted to its London portfolio from summer 2018 comes as no surprise. The arrival of a major Gulf hubber is overdue and brings to the airport the powerful proposition it has to airports all over the world, often to the chagrin of an incumbent national carrier. Very simply it's one stop daily to almost anywhere in the southern or eastern hemisphere. That's powerful enough and if it becomes twice daily or even more it can be overwhelming. Hence protectionist mutterings in some corners , including currently the USA, but a great reluctance by many governments to do much about it..The benefits /revenue from inbound tourism and business travel are increasingly understood to be worth way more than keeping a creaking legacy carrier alive.

Stansted itself will be delighted. Its longer haul routes so far have been tentative single spokes into the USA usually with secondary fleets . They were never going to be game changers. Emirates is exactly that. It offers half the world to a substantial market located within an arc sweeping from central London , including the Canary Wharf financial centre, through Essex, East Anglia including Cambridge, and anywhere east of the A1 and East Coast Main Line.That's a lot of people and a lot of money.

This will be one to watch. Assuming Stansted launches successfully will Emirates quickly double their frequency, partly to discourage imitators, or will we see Qatar or Etihad join the fray? Our guess is that these will spectate for while and see what happens before making any move. Turkish, always an avid collector of additional spokes, might though just jump the gun with a narrowbody to Istanbul. The game is on.

African Roundup October November 2017

African Roundup   October - November 2017 

South African Airways has been handed yet another recapitalization fund the Finance Minister asserting that SAA ‘must be supported’.  The amount this time is to meet debts and operational costs.  But since then the airline has forecast a worsening outturn for 2017-18.  The operating loss will approach US$300m and the outstanding debt will rise to US$700m.  This is a baptism of fire for new Chairman, JB Magwaza, and new CEO, V Jarana. The conditions attached to the money require yet another, board-approved, 5 year turnaround plan to be submitted to Government.  This begs the question of how successful can such a plan be.  The history of the many such over the past 5 or so years suggests it to be unlikely.  The SAA problems reliably escalate faster than the solutions.  But, if the new Chairman and new CEO can strike a strong and mutually supportive working relationship the chances of success will be better.

In Kenya Airways another new Chairman and new CEO relationship is also undergoing a baptism of fire.  First target of his opponents within the airline and government are the four Polish expatriates he hired to give him a cohesive core team and effective control of the airline. The Board’s Staff Committee, which should be standing well clear, is reviewing this, the processes surrounding it etc. It’s not impossible that their educational certificates will in some way be found deficient. That would mean game over for the incomers and presumably the resignation of the CEO, something which might just make people stop and think a bit. With radical financial restructuring nearing completion and the recent disruptive General Election still nit totally resolved, some 40% of the airline’s ground engineers and technicians walked out demanding significant salary increases.  The new CEO moved swiftly and dismissed all the strikers. That’s not popular politically. Court cases loom. In common with other African carriers, Kenya Airways  has seen a steady trickle of engineers leave to join better paying Gulf carriers. That is ongoing anyway and only lifestyle issues prevent a greater flood. Qualified local replacements are rare on the streets of Nairobi; a conundrum familiar to experienced senior management but a big challenge for the new Chairman and CEO relationship to resolve.

On an entirely different front away from the big legacy strugglers is Fastjet , now emerging from a 2 year re-structuring with the launch of new routes based on Maputo and domestic sectors within South Africa still a long way about the original  pan-African vision which turned out to be so beset with obstacles. Old Africa hands were unsurprised. In the interim CEO Nico Bezuidenhout has relocated Head Office from London to Johannesburg, has replaced the A319 fleet with smaller types and brought in experienced South African senior management. New South African shareholder, Solenta Aviation, facilitates network growth through its ownership of AOCs in several neighbouring countries plus the provision of leased aircraft whose owners though are likely to protect themselves from loss by wanting the money for these up front.  The costs of effecting this restructuring have been eye-watering, measured in tens of millions of dollars, but with the opening of the new routes it is just possible that a significant step has been taken towards the original 2012 vision of creating a ‘successful Africa-wide low cost carrier’.

This ‘editorial page’ is too often depressingly dominated by airlines hard pressed seemingly endlessly, trying to recover from debilitating financial performance.  The consistent exception is Ethiopian Airlines.  They live in the same world and must experience business problems but steadily deal with them without fuss . They have in depth highly professional home grown management and long term strategies for the whole business . As result the network, fleet ad frequencies keep growing and a brand new airport designed for connecting business will soon open.  The snapshots below list them discussing with carriers and governments across the continent opportunities to launch new local carriers, to become strategic partners or to provide support; Nigeria, Ghana, Mozambique and Djibouti are but four.  Subsidiaries operate in Togo and Malawi.  Meanwhile their academies in Addis Ababa produces qualified pilots, engineers and other professional specialists.  

Also different is their freedom from political intervention, something that grows within SAA and Kenya Airways by the day. Ethiopia’s governments have always been happy to just let the airline’s management get on with the job.

Down south and off into the Atlantic SA Airlink flights to St Helena are now fully operational.  The weekly ETOPS E190 operates from Johannesburg, with a tech-stop in Windhoek.  A monthly extension to Ascension Island will follow shortly. If booked on it not a flight you want to miss then. Passenger numbers are small but the lower-priced RMS St Helena continues to operate. In February these sailings will stop and Airlink passengers are likely to increase. (Nobody explains how larger items of freight will now reach the island. The EMB might be OK for a washing machine but will struggle beyond that). A possible addition of Cape Town to the routing should also raise load factors.

EAST AFRICA

Ethiopian Airlines is discussing with the Djibouti government the possibility of creating a new joint-venture with state-owned Air Djibouti.  The original airline ceased flying in 2002 but has recently been operating a B737-400 on a limited regional network. The aircraft is supplied by Cardiff Aviation (UK) who have also provided interim technical and management support during the start-up period. Air Djibouti is now under local management.

Zanzibar frequencies are rising from thrice weekly to daily while on the long haul side the Sao Paulo flights are planned to extend to Buenos Aires twice weekly with B787-9s and Chicago is due to join the network in April.

Seemingly untroubled by other operators finding it difficult to make money with pure cargo operations, particularly brand new ones, the airline has signed up with Boeing for 4 B777 freighters to add to its fleet of six plus two B757 conversions. Faced with poor road and rail infrastructure much of Africa has substantial needs for reliable efficient freight operators working through hubs which are organised, really work and don’t build up horrific backlogs. As most countries have imbalances between in and outbound demand clever route planning is needed to minimise low revenue sectors. This produces some interesting regular routings zig zagging around the continent and to Europe. At hubs change of gauge from wide to narrow body presents obvious problems. From time immemorial this has sometimes necessitated the use of widebodies on sectors with low passenger loads but the financial result on every sector thus flown threatens the profitability of cargo overall.

JamboJet (Kenya Airways LCC subsidiary) .The expanded Q400 fleet is enabling a planned opening of regional routes to Tanzania and Uganda in February 2018 and the plan to lease a further two.

There is speculation that the 2 B737s are to be retired (and conveniently returned to Kenya Airways?) leaving an all turbo-prop Q400 fleet by the end of this year. 

Kenya Airways Air France is to be included in the long-established joint venture with KLM currently being re-negotiated. April 2018 is the target completion date lining up with the resumption of Air France flights to Nairobi.

As in our leading paragraphs, the airline is suffering from (another) bout of unhappiness, this time amongst the ground engineers.   

RwandAir hopes to raise the A330 fleet to 4 by taking another 2 in 2018.  The current total fleet of 13 aircraft should total 20 by 2022 with B737s and CRJs being retired. DHC Dash-8s will continue on domestic routes.

In Nigeria the Lagos route will be joined in January by a new separate service to Abuja.

Sudan Airways. The lifting of 20 years of US sanctions gives the carrier hope that scheduled services will again become possible. The long-dormant single A300-600 is being refurbished and returned to flight condition. The 2 A320 plus 14 new aircraft (to do what?) promised by China earlier this year have yet to materialize.

SOUTH / CENTRAL AFRICA

Air Namibia plans Mar2018 return to Accra with four weekly Windhoek-Lagos-Accra A319 services  complete with 5^th Freedom Nigeria-Ghana rights.

Congo Airways (DRC) has taken delivery of a wet-leased A319-100.

Fastjet PLC (S Africa) is launching new links in Mozambique and South Africa in the coming weeks.  5 domestic routes based on Maputo will use shareholder Solenta’s Mozambique AOC.  In South  Africa, Fastjet’s network will be based on that of  FedAir, serving ten domestic points.  A branding agreement has been signed.

Fleetwise the first of two E190s, leased from GECAS have arrived . They are to be based in Dar-es-Salaam.  All the A319s  have now departed.

The Mozambique arm of the company launched E145s on 3 domestic routes, Maputo-Beira, Nampula and Tete on 3^rd November. Future routes to Johannesburg, Lusaka and Harare have been mentioned. Knitting these in with trans border links to Blantyre or Lilongwe would be interesting but it may be that the different colonial heritage and languages of the two countries mean that apart from in border areas there is little commerce between the two and little inclination to develop any. Indeed such realities may be one of the rocks upon which the original everywhere to everywhere Fastjet visions foundered.

LAM is looking to a consultancy to draw up a 10 year restructuring plan. The options, opportunities and limitations should be fairly easy to identify quickly. Any consultancy agreement should recognise this and be strictly limited in time and cost. The Mozambique’s government has recently granted wide-ranging rights to 7 foreign carriers.  One, Ethiopian Airlines, is evaluating a substantial network based on Maputo.

SAA JB Magwaza, Chairman of Peoples Bank, is appointed as the carrier’s new Chairman.  Controversial previous Chair, Dudi Myeni, is to leave the company.  A new Deputy Chairman plus 4 new non-executive Board members are also appointed.  New CEO, Vuyani Jarana, an aviation outsider, assumed responsibility on 1st November.

Libreville, Cotonou and Douala routes are to drop out of the network early in 2018.

 US$ 702m ‘recapitalsation’ has ben allocated by the government for 2017-18. The amount is to enable debt servicing and operational costs only.  A government guarantee of US$ 1.34 billion has also been awarded.  To raise the necessary funds Government is likely to sell a part holding in Telkom.  A ‘strategic partner’ for the SAA is likely to be sought.

SA Airlink and Safair (South Africa) are to merge with each retaining its own trading identity.  The securing of benefits of scale, “sharing costs and removing systems duplication”, are given as the main reason.  Safair, a profitable business, will become a minority shareholder in Airlink.  Since 2014 Safair has operated a domestic LCC network.  Competition Commission approval is anticipated early next year.

Zimbabwe Airlines putative new carrier to replace Air Zimbabwe announced, and missed, a targeted 9 Nov start of operations with 5 long-haul aircraft plus 6 shorthaul. The project failed to attract financial backing so has now been shelved.

WEST AFRICA 

Aero Contractors (Nigeria) once seen as the country’s most promising domestic carrier has reduced its fleet to just 2 aircraft, the minimum necessary to maintain its AOC, whilst grappling with myriad financial and staff problems.

Africa World Airlines (Ghana) has launched thrice weekly ERJ145 services between Accra and Monrovia, adding to the Lagos and Abuja regional network. Kumasi, Tamale and Takoradi comprise the domestic network from Accra.  (Nov2017)

Air Côte d’Ivoire has received its second new A320 following the first delivered in July

Air Senegal took delivery of the first of 2x ATR72-600 ordered in June. An MoU with Airbus for the sale of 2x A330neo, plus 2x options, for delivery in January 2019 has also been signed.  Launch of the new carrier, with a small domestic network, is to coincide with the planned 7 Dec opening of Dakar’s new airport.  

ASKY (Togo) is to re-introduce services in November from Lome to Monrovia, Freetown and Banjul.  

Camair-Co is resuming some regional operations following receipt of US$53m Government subsidy.  Libreville was first, in October, to be followed gradually by Abidjan and Bangui in December and then Cotonou.  

 The company is discussing a possible Commercial Agreement with French carrier, Corsair International, including Corsair operating the Paris route suspended by Camair in September.

Ceiba International (Equatorial Guinea) operations are suspended by the local CAA. Madrid flights continue with a Portuguese-registered aircraft.

Goldstar Airlines (Ghana) Privately-owned start-up was awarded an Air Carrier Certificate covering 11 international routes in Dec last year but continues to await an AOC grant. Original start-up was to be June 2014.  Plans are to start flying with 5x wet-leased Boeing 737s.

Starbow Airlines (Ghana) has added a BAe RJ100 to its existing fleet of a single

BAe146-100 and a single leased ATR72-500.  A domestic network is flown linking Accra with the usual suspects ,Kumasi, Takoradi and Tamale. 

Starbow Airlines (Ghana) has taken delivery of the first, of 2, ATR72-500.  The entry into service was marred by an excursion off-runway in heavy rain. All operations were suspended.

TACV (Cabo Verde) selected Loftleider Icelandic as strategic partner to develop Cabo Verde as a hub linking Africa, Europe and the Americas. On the face of it that looks a bit of a long shot,requiring a lot of investment to be able to provide enough hub synergy to make it work .Having ended all domestic routes in favour of BinterCV the 5 September date for resumption of international operations has been delayed as the single B757-200 undergoes maintenance.

NORTH AFRICA 

Air Algerie is going through a “difficult period”, says CEO Bekhouche Alleche, as it grapples with “increased competition, overstaffing and heavy indebtedness” prompting a staff freeze. 

Air Arabia Maroc (Morocco) launched a new service Marrakech - Paris CDG on 31 October plus Marrakech - London Gatwick on 1st November. 

Egyptair Fleet upgrade plans include orders for 6 B787s and 15 A320s.

Syphax (Tunisia) has moved closer to re-launching ops as Maghreb Airlines.  Heavily debt-laden Syphax was placed in judicial administration in 2015. A reorganization plan has been court approved.  

NON-AFRICAN AIRLINES

Air France .After an 18 years absence, the French carrier is returning to Nairobi thrice weekly with a B787 in April 2018, 3pw, B787.

 

Air Malta plans to re-start Casablanca in April 2018.   

Alitalia is another former player planning to return to Kenya, this time with four weekly A330s and to South Africa with four weekly Johannesburg operations. The late March beginning of summer schedules is the likely date.

Brussels Airlines increased Abidjan frequencies to daily and Accra to five weekly on 28^th October.

Norwegian Air Argentina LCC has named Johannesburg in its long term planning for flights from Buenos Aires.  Established in Jan 2017, the Norwegian Airlines subsidiary has received Argentina NCAA approval to operate domestic and international routes.

Turkish Airlines network tentacles spread further with the February launch of a Istanbul-Ouagadougou-Freetown route.

 Ukraine Airlines:  is aiming to inaugurate Kiev–Cairo B737-900 services.

MISCELLANEOUS  

AFRAA has highlighted that US$950m of blocked funds is held by Angola, Sudan, Nigeria and Algeria.  Angola heads the list with US$ 480m blocked. 

 Abderahmane Berthe, previously CEO of Air Burkina and of Air Mali, is to be the new Secretary General succeeding Dr. Elijah Chingosho. 

Comoros Government is planning to grant domestic rights to foreign operators.  Air Tanzania has been named as a likely beneficiary.

Côte d’Ivoire Government talks to Ethiopian, SAA and Kenya Airways on the possibility of them operating Abidjan-USA services. Sensible. Why sink a large capital investment and risk when someone else will do it for you and pay a guaranteed percentage fee?  For too long-about 60 years national pride has got in the way of going for these kinds of arrangements. Countries have paid tens of millions to from time to time decorate distant airports with their national identity. At Heathrow Olympic in the 1980s scheduled a 23 hour layover at the end of a 4 hour flight from Athens  so that one of its A300s was always visible from the roadway at the western end of  Heathrow’s Terminal 2. Whether or not anybody other than spotters ever noticed it is unknown

Côte d’Ivoire . Construction has started to double capacity at Abidjan International Airport. The  obvious vision is to become a major West African hub. Currently it faces little opposition in seeking that role but it will take a long time and lot of money to build up the spokes required to create a real hub rather than place where every day there is a good collection of connecting opportunities backed by alternative routings if one should fail. Nobody wants to hang around for 24 hours or more awaiting the next flight (which may be full anyway).

IATA and African Development Bank signed an MOU “to establish a framework for collaboration to boost the aviation sector in Africa”.  IATA signed a similar document with the African Union in July last year. 

Zambia an un-named start-up carrier has ordered 5 SSJ100s.

John Williams

1 Dec 2017