A cameo,- Cathay Pacific's London Route,competition and the A 380.

Cathay Pacific's move up from 4 to 5 daily flights on the Hong Kong-London route further increases its dominance of this once hotly contested city pair from which they were excluded until the 1970s since  when it has built  a solid base culminating in market dominance. Qantas and Air New Zealand have both withdrawn their daily 747s , BA has slimmed down from 3 to 2 services and Virgin Atlantic jogs along with a single daily A340-600 calling in on its Australian route.

The traditional pattern of operation and , because of it demand ,on this 12/13 hour nonstop sector has been overnight in each direction, leaving a long layover at both ends. Brought up on that and reinforced by "mustn't waste a minute of the day" cultures,  the market has shown a reluctance to spread across into daylight flights  although once they are launched and persisted with they do take root. A number of airlines including BA, Lufthansa and SAS have dabbled at various times since the 1970s with westbound daylights but have none now. On European routes ,other than Cathay only Air France now offers a  5 days a week daylight westbound  in addition to its daily overnight schedules.

In recent years Cathay Pacific has been the most adventurous on the London route, giving the widest spread of departures in both directions. It has  moved up to from  2 to 3 to 4 and now 5 daily frequencies. By not throwing all its capacity into the proven overnight market it will have lost a few percentage points of pure profitability and started to spill overnight business onto its competitors, notably One-World  "partner" and historical enemy number 1,-BA. Despite that however it has relentlessly expanded its market dominance in terms of sheer numbers carried . It has also increased its appeal to the thriving high yield business market by being able to offer the traveller the ability to be on an aircraft  home at the earliest possible moment after meetings have ended rather than waiting for the next evening. Being able to save another "red eye" flight and its resultant under par following day in the office (whatever the ads say about perfect nights sleep in First and Business flat beds) can be very valuable to savvy frequent flyers. Whose ticket would you rather have in your pocket if your time of return was uncertain?

Aquistion of Heathrow slots for the 5th service now enables Cathay to tighten the garotte on its competitors and regain from them any business it has had to let spill. That will put more pressure on BA who are responding not by increasing frequencies or widening their very tight time span but by introducing the A380 on one of their two departures from 15th November. Regardless of that and the small increase of capacity it brings, Cathay's overall dominance on the route will increase. The 5th service is a clever and well thought out move.

Cathay's next steps to maintain and profitably increase that dominance has to lie in a bigger aircraft, a decision that seem to be getting nowhere at Chep Lap Kok at the moment. There have long been talks around the 787-8i and the A380 but no decisions. Neither is perfect. The 747-8i , the ultimate stretch for the 1960s 747 design, is at the end of its development life and looks like a blind alley. It has very few customers and the passenger version is unlikely to see more than 100 orders at best. That means any purchaser will be faced with having to operate it for most of its useful life (which actually is Cathay's policy for most of its aircraft) as its residual value will be low. That leaves the A380 ,like it or not, as the only real game in town.

What then is the problem with the A380, not just for Cathay but for others?

The answer is simply that the only model currently on offer, the -800 is too small for many. It is the SP of the A380 series, with the wing and basic structure for the bigger -900 and -1000.  The need to maximise the number of seats per slot at the world's most constrained airports and to extract the lowest seat mile costs from the design point to the need for Airbus to dust off the plans, spend the money and offer these two stretches as soon as possible. Cathay and Emirates have been telling them that for some time but preoccupations with production problems and fixing the wings once and for all have mopped up all the available 380 brains and funds. As result the -800, broadly offering 460-550 seats in most configurations currently remains the only model available to order.

That may soon change. Airbus look faced with a double or quits option. If they stick with just the -800 there are probably about 70-90 more orders to trickle in, maybe less. That way the line, which is now producing faster than new orders are coming in, will close towards the end of the decade. The prospect of that will simply hasten the process as, apart from topping up existing fleets, airlines don't like being end of the line buyers. It's not good for further expansion or residual values in particular. By offering the -900 and -1000 Airbus would be likely to sell more -800s as well , thereby ensuring that the long term value of the 380 project is maximised. There is no alternative very large airliner in sight and once the A380 is deeply entrenched the barriers to the launch of a competitor become very high indeed.

All this ties back into the cameo of Cathay Pacific and the Hong Kong-London route. If you have the most frequencies with the widest spread of departure and arrival times and aircraft large enough to ensure that even at the strongest time of day you are not spilling passengers over to your competitors (regardless of whether they are in the same alliance group or not) you are king of the castle and can call the shots on everything else including pricing. Having a service advantage, or at least no disadvantage , helps too. That's Cathay Pacific. All to play for with a bigger aircraft.

 For Airbus, the opportunities are staring them in the face too. All to play for with a bigger aircraft.

American Airlines (re) paint their wagon,- but that won't be enough.

American Airlines' full page ads in the UK  launching their new livery and exciting innovations such as personal in-seat entertainment ( ever heard of that before?) and raid the larder snack stalls in First and Business (ever hear of those before?) proclaim "We're putting the wonder back into air travel, one innovation at a time." and "The new American is arriving".

If  new American is indeed arriving that's very good news and not before time. It looks though as if much of the newness isn't very novel to many, especially to anyone who has travelled east of the UK and Europe these last ten or twenty years. (Singapore might say forty).

The new paint job looks good and is fresh and smart but despite the belief of some marketeers that it's not what in the tin but what's on it that counts, paint certainly isn't enough. Following the USA's recent mergers, American is one of just three major US airlines. Under the skin and despite some changes, all are essentially heavily unionised and  predominantly domestic legacy carriers with uninspiring service styles and standards. Head to head with many Oriental and Gulf competitors they would not be in the running. Within the USA the battle between the big three is predominantly between  the market-distorting frequent flyer programmes rather than innovation and real service.

Launching a "new" American is an excellent idea. The self service snack areas are welcome especially as service on board from any other quarter has not been one of the airline's key selling points. The wifi and entertainment systems enhancements are good but are generally now taken for granted amongst global travellers. There's a lot more needed  to really be a new,reborn, rejuvenated or even re-invented airline. A lot more rethinking and real delivery is essential before "new" is really new.

Footnote: American's cancellation yesterday of over 800 flights due to a reservations computer outage reminds us that fewer and fewer airlines now have the skills and ability to revert to manual for even a core of key flights on such occasions. Many no longer have a simple process to check in and dispatch a flight or people with the ability to do a simple manual one sector load sheet or flight plan. Just as calculators have replaced mental arithmetic in schools, most newcomers to the airline industry are no longer taught the basic essentials of the job and can be forgiven for not even understanding them.

IAG/BA's new 787 order,- "Oh, the disappointment" ?

Remember the short series of BA ads way back in the first days of the Marshall/King era which ran "Oh the disappointment" ...of finding you were not booked on a BA flight? It looks as if this may well be the shape of the future too.

IAG's announcement today that it is exercising the BA option on 18 787s-presumably -9s unless hidden here is the emergence of a further stretch to take the aircraft to a-10 version,- is timely for Boeing in the midst of its lithium battery woes .One would hope that as a mark of appreciation a few points have come off the contract price. If  these aircraft are only -9s and intended to replace the last of the larger 747-400s in 2017-2021 on a one for one basis, the order is not a cause for celebration by those who want to fly BA in the future,-particularly in the back end,-or for Heathrow Airport Plc. The opponents of new Heathrow runways might also raise gleeful eyebrows and claim that the capacity of the two existing ones is not being exploited to the full.

The 787-8 is broadly seen as a replacement for the 767-200 while the 787-9 is the same for the 767-300, with a smidgen of growth depending on configuration. The 777-300 and the A350-900 and -1000, fall into the no growth end of the 747 replacement slot and the A380, particularly the likely eventual stretched versions, fill the growth end.

The choice of the 787 is therefore a surprising choice for a business which, with its heavily slot constrained base and relatively low overall, high yield-orientated, configurations, is already spilling large amounts of  particularly lower yielding business to competing European and Middle Eastern hubs and to other airlines. It is even more surprising when you consider that in purchasing new aircraft airlines tend to go for something that will match demand around the midpoint in its front line life. That would have pointed to upgraded 777-300s or A350-9s or -10s for part of the BA task and A380s for the rest. Heathrow Airport which depends a lot on the sheer numbers passing through its terminals would have hoped that its predominant base carrier would have opted for as big as they could get.

Maybe we will see some explanation of IAG's logic later. Pending  that  this new order does look disappointing for anyone hoping to see a vigorously resurgent revitalised BA fighting its corner against all comers. It seems to be an updating of what the airline does now, along with the uninspiring acceptance of a longhaul future of little or no passenger growth and an ongoing steady decline in overall market share on many routes other than the Atlantic. It doesn't give the airline's staff much to go for either.

African Roundup- February and March 2013.

A big talking point around Africa and elsewhere is whether the explosive growth of the Gulf (and Turkish) airlines , including on sixth freedom sectors within Africa, is a good thing or not. Is their dominance and massive investment good business or is there a real danger that they could weaken African airlines to such an extent that if they were to leave or pull off sectors there would be no homegrown substitute to fill the gap? The free market lobby would say that something will always fill the gap if there is money to be made and if there isn't there is no need for the thing in the first place. The defenders of the old fully regulated, restriction loaded industry which saw frequencies and capacity low,  fares sky high and any sixth freedom sectors flown blind (ie without uplift rights) would point to concerns about city pairs (eg Lusaka-Harare) being left un or under served.

Erik Ventor of South Africa's Comair , a mould breaker themselves in that they do much of their business as a fully fleged franchisee of BA, comments “Africa is looking a bit shaky at the moment.  With Emirates flying directly to Harare, Lusaka and Luanda and going through its hub in Dubai we have seen our Jo’burg routes take quite a knock”.  It’s easy to think that the wave of Gulf carriers’ expansion into Africa affects only national carrier uplifts, for example Kenya Airways out of Nairobi.  But the ripple effects go wider as Erik Ventor’s comment highlights.  Intra-regional carriers are also feeling the effects on their feeds into the main hubs.  And there is a yet further ripple; the entry or expansion of smaller carriers is being inhibited.  For example Emirates 5^th Freedom rights between Lusaka and Harare has forced Proflight of Zambia, a small J41 operator, to substitute Lilongwe and Lubumbashi for its natural major route choice. 

This is not to argue against the undoubted social and economic benefits accruing from the arrival of big new players, nor to demonise the Gulf and Turkish relative newcomers.  It does though serve to remind that the ripples run wide.  All African carriers are, and will remain, smaller than the Gulf betheren.  Should the Lusaka market not meet Emirates' aspirations or linking it to Harare cease to produce the best result they can withdraw orn change their routings very quickly and feel no pain. Proflight, meanwhile, without critical mass to support it, might by then no longer be around to step in and provide alternative local frequencies to cover the resultant gaps

Not all problems for the African airlines come from the Gulf however. Many are home grown or simply the result of a changing  world which isn't going to go back to where it was. What's more a growing number of governments across the country would welcome more rather than less business flowing in via greater connectivity with the world offered by the foreign newcomers. Tanzania is a good example. Until recently its outlets to the world comprised services by legacy European carriers or its neighbour Kenya with whom it has always had an uneasy relationship. Now it is connected by one stop/change of aircraft to almost anywhere in the world several times a day by Ethiopian, Emirates, Qatar and Turkish as well as via its more traditional outlets via Kenya Airways and Nairobi.Is it worth protecting Air Tanzania and losing any of these?  Absolutely not.

Reverting to home grown problems for which nobody else can be blamed, Nico Bezuidenhout, SAA, a carrier which once flew high and had a highly protected position both domestically and internationally but which is now being buffeted on both fronts as well as having a good stack of other problems in adjusting to its new world, comments "In my subjective opinion, 70% of the issues [with the airline to date] have been directly related to failure to implement."  The comment was made as he introduced the latest SAA restructuring plan – the 9^th in 13 years.  Nothing is new under the sun, is a hackneyed expression but it contains a huge element of truth.  The recommendations of SAA’s latest plan will almost certainly have been made before.  The Board will have endorsed them.  And then ….nothing.  Air Namibia has been through a similar iteration in recent years but continues to generate escalating losses.  Other CEOs will recognise the syndrome.  Kenya Airways is one of the few that has bucked the trend.  The fact that  their government is not the dominant shareholder is surely not a coincidence.  Airlines in the real world do not enjoy the euphoric luxury of a fairy grandmother to sprinkle cash on demand.

Ethiopian has meanwhile been declared the preferred bidder to partner the Government of Malawi in the creation of new carrier, Air Malawi (2012) Ltd, the familiar old,chronically loss-making, Air Malawi having been liquidated.  Successful conclusion of the negotiations can only bring benefit to all involved.  Is it just possible that an Addis- Lilongwe– Buenos Aires schedule will appear in OAG in 2015? Stranger things have happened.

1.  EAST AFRICA

Air Tanzania started flying again on February 8th with 4 weekly Dash 8-300 services between Dar es Salaam and the southern port of Mtwara . (Feb 2013)

Eritrean Airlines will operate some flights into South Sudan and to the UAE on behalf of Sudan Airways which is short of serviceable aircraft due to a spares shortages. (Feb 2013)

Ethiopian Airlines despite its obvious frustration with seriously delayed and now grounded Boeing 787-8s talks of mid-2003 network growth to Seoul, Ho Chi Minh and Manila . This is despite having to put the launch of its new Addis-Lome-Rio-Sao Paulo service on hold until June. The Lome call links in with the airline's 40% holding in ASky of Togo which it is intended will feed West African traffic into the long haul South American sector. A North American link, possibly to Boston, could follow, something that looks safe from the attentions of the Gulf  people.

On the investment front, following  its deal to take a 49% share in Air Malawi (2012) Ltd.,it is looking for its new aquisition to create a near-regional hub . This, rather than any long haul dreams,should have always been Air Malawi's agenda right from the time it split from Central African Airways but it never had the money, political support or management determination to do it other than on a very limited and haphazard basis although during Rhodesia's UDI Blantyre did for a few hours around midday on Monday and Saturday  each week act as a hub for mainly foreign airlines, SAA,Air Rhodesia, East African, Zambia Airways to meet and exchange passengers flying between places which did not allow direct services between each other. Discussions are now being held with Zambia, Tanzania, DRC and Uganda to secure the necessary improved traffic rights to achieve something more substantial on behalf of the new Air Malawi itself. 

Looking further ahead and thinking of the principle of the ASky link from West Africa to South America, could Ethiopian do something similar with an Addis-Lilongwe-Buenos Aires route fed from central and eastern Africa by Air Malawi?  That would be another clever game changer .

Regionally a thrice weekly  737-800 Addis – Ndola - Blantyre  service will also start, thereby  further opening up long neglected Blantyre and hopefully also with traffic rights between Ndola and that city (Feb13)

Ethiopian's engineering division has achieved US FAA and Ethiopian CAA grant of full airframe maintenance approvals for all Bombardier Dash8/Qseries models and for CFM56 engine overhaul. (Feb13)

FastJet .This is a most interesting venture. An airline dedicated to flying within the continent but with its HQ in the UK. In other words, an airline serving Africa but , notwithstanding its susbidiaries in several countries, not actually African.
Is that a strength in not being subject to the day to day political and other complications which make can running Africa based and owned ( especially if governments are involved) airlines hard going hard going or a disaster because , not being based on the continent numerous defensive obstacles will be put in their way? It's a reasonable guess that countries with a weak or no national airline will welcome them and those with a strong one will be less enthusiastic.The jury will therefore have to remain out for a while before pronouncing whether the formula is a work of genius or doomed to have a very hard time.

Meanwhile the company appears undaunted by legal writs flying about and manages to keep its focus on aircraft as well . The new airline reports  almost 30,000 passengers and a 79% load factor in first month of  thrice daily A319 services between Dar es Salaam and both Mwanza and Kilimanjaro. January figures totalled 26,400 , giving an 81% load factor albeit probably largely at low yields. 


Routewise next to come are infill services linking already served Kilimanjaro to Zanzibar and Mwanza. Those will add utilisation and revenue while keeping the network compact and easily manageable and well within the capabilities and time available from the three initial A320s.

 In what looks like a a way of getting around problems in getting started in Kenya, the airline is exploring a possible acquisition of Nairobi-based Jetlink Express . A Memorandum of Understanding has been signed and Jetlink declared to now be Fastjet's preferred Kenyan partner. IOSA certified Jetlink suspended services in Nov 2012 with cash-flow difficulties but presumably retains the all-important operating certificate upon which Fastjet Kenya could be built. (Feb2013)

Further south, predictably enough SAA, Mango and Comair have objected to Fastjet's application for transfer to itself of 1Time’s Operating Licence.  Fastjet is seeking exemption from the requirement that 75% of the shareholding of the licence holder must be South African. Meanwhile, helpfully, 1Time's  liquidation  has been deferred to Ocober 2013 2013 (Feb13)

Back in the courts , Fastjet appears to be facing more litigation over liability for Fly540 debts and at least one looks to be heading for the UK High Court. 

To support all the activity, Fastjet has secured USD23.5m of new funding from US-based Bergen Asset Management (Mar 2013)

Kenya Airways meanwhile has not, despite its 49% share in Fastjets's well established Tanzanian rival Precisionair, been over focused on the new intruder although it is reasonable to expect that it has not let its defences down either. The airline has signed up a new "strategic agreement" with Etihad involving codeshares and unspecified joint procurement of some ground handling, line and heavy maintainence and cooperation on cargo and training. Hopefully the latter includes cabin crew which, along with catering according to some local reports, are becoming  the airline's achilles heel . This can not be afforded when competing with the new Gulf carriers in particular. It is difficult to see what the Kenya Airways problem is as the airline is a good and much sought after employer in Kenya. It would be surprising if the 26% shareholder,KLM, were not concerned.

The Eitihad arrangement needs a KQ operation to Abu Dhabi so the beginning of three weekly flights over the sector in summer 2013 is a natural development.

Another network addition will be the extension of 3 weekly Nairobi-Harare services to Livingstone. The last, albeit blinded,-ie without traffic rights,- flights between East Africa and Livingstone were by BOACs Comet 1s on the Entebbe_Longstone-Johannesburg part of their London-Johannesburg services between February 1952 and April 1954. Presumably Kenya Airways will under the Yamasoukrho Agreement be seeking the useful incremental revenue of local traffic rights between Harare and Livingstone, a sector currently devoid of air services. Harare needs all the links it can get. 

Kenya Airways recent story has not all been about expansion though. Surprisingly, despite the withdrawal of Virgin Atlantic's daily Nairobi services, the airline has for summer 2013,- and slotwise therefore for evermore unless it  has obtained a slot-sitter or it expensively buys new ones in the future,-dropped its 8th, 9th and 10th London frequencies. These gave KQ the competitve advantage of offering the customers, and the tour companies especially, the option of overnight and daylight flights in each direction on the three days around the weekends. BA has  tentatively put a toe in the breach by introducing an 8th frequency, leaving all other unmet nostop demand to find its way via 6th freedom carriers including KQ's 26% shareholder KLM.

Other problems for the airline appear to include the limited baggage capacity of the new Embraer fleet which gives difficulties on routes with heavy traders traffic in particular . Another frustration must be the glacial progress on the completion of its planned additional terminal space at the western end of Nairobi's three terminal units. Despite the need for the building being more than urgent there does not seem to be a sense of urgency in the Kenya Airports Authority about fitting it out and getting it operational.

PrecisonAir's CEO Alphonse Kioko, formerly Kenya Airways' GM for the Gulf and points east is retiring from the airline at the end of March. Kenya Airway's GM Sales, Ms. Sauda Rajab has as result been appointed the new MD & CEO.  (Feb 2013).

Rwandair is stretching its wings and plans to further exploit its geographical position as an alternative hub or at least routing point to Nairobi. From May new services are programmed to Juba, Zanzibar and Accra. Profitability in 2015 remains their target. (Feb 2013) 

Sun Air (Sudan) has disposed of its Boeing 737-400 in favour of a wet-leased A320. It also has 2 of those stalwarts of the African aviation scene,- Boeing 737-200s (Feb 2013)

2.  SOUTH / CENTRAL AFRICA

Air Cemac (Congo Brazaville) has delayed its launch until the end of 2013.  Air France-KLM holds 34% (Mar 2013)

Air Malawi . On February 13 the the existing company was finally liquidated and all operations ceased. The accumulated debt, stretching right back to the 1970s and the expensive long haul VC 10 operation, has finally been buried. The company had 243 staff , some of whom , especially crews, look likely to be taken on by its successor company (See below)(Feb 2013).

Air Malawi(2012) Ltd . Here it is at last! The Malawi government has named Ethiopian Airlines as its preferred strategic investor to hold 49% of the new airline. This is logical as apart from other considerations both South Africa and Kenya, the homes of likely alternative contenders ,have other history and involvement in this part of central Africa whereas more distant Ethiopia has very little. Nor is Ethiopian considered as a direct competitor for what is likely to be a regional Air Malawi. Flying will  start within 2 months.  The Malawi government will hold a minority 20% of the shares and the remaining 31% will be held by Malawi nationals. (Feb 2013) 

Air Namibia has further reduced its frequencies to Johannesburg and down the coast to Capetown from 3 to 2 daily from February. Accra has been dropped and the key long haul route to Frankfurt has temporarily gone down to 4 flights per week. Fuel supplier Engen Namibia  halted Windhoek fuel uplifts for a while, forcing the airline to tanker to maintain services. That is not a great problem on short haul flights but as incoming long haul aircraft can not carry anything like enough fuel to do another long haul sector,  northbound Windhoek -Frankfurt flights have had to make a refuellling stop  in Luanda. 

In order to return the Frankfurt frequency to daily, the A340 leases have now been extended to the end of this year. The Namibian  Government has also injected  US$ 200m into the company enabling it to settle with the Windhoek fuel supplier, Engen.  That should see the end of the fuel tankering and the Luanda call,- at least for a while .(Mar 2013)

Air Zimbabwe 2 ERJ135s are expected to arrive from  Brazil  to boost domestic/regional services .Once again  IOSA certification is being sought .
 A Sonangol leased A320  has been introduced on a daily Harare-Johannesburg service and  least one of the 3 grounded MA60s is to re-enter service to replace B737-200s. While the passengers will welcome the A320 , they are as before unlikely to say the same of the MA60s. (Mar 2013)

Comair is planning a further breakout from its south of the Limpopo homeland by launching 6 flights a week between Johannesburg and Lumumbashi. 

Camarinou Airlines (Central African Republic) is to add a B737-300 to its B737-200 and to launch regional scheduled ops from Bangui toDouala, Cotonou, Pointe Noire and Kinshasa, though political developments in the country may mean that these are shelved for the time being. (Feb2013)

Kaya Airlines (Mozambique). Indicative of the continuing economic growth in the country, is planning  to grow its fleet fleet by 4 small regional jets. (Feb 2013)

LAM planning to add 2 EMB145 to its fleet and to increase its flights at Tete and Nampula in response to a big expansion of the coal mining industry in northern  Mozambique.  It would be interesting if the regional airlines started knitting together the fragmented countries of south-central Africa. For example, including Blantyre and/or Lilongwe on Mozambique-operated services and reintroducing the one time Lusaka-Chipatata- Blantyre route. Government financial support would be required in the early days but they could be powerful in improving the economic performance of the area which has been fragmented since the collapse of the Central African Federation. Right across Africa flights across former colonial boundaries are largely lacking (Accra-Abijan is an exception) and the polarisation of English, French and Portugese speaking divisions inhibits business and the development of trade links  across the old pre-1960s borders.(Mar 2013)

Proflight (Zambia) was awarded its Air Operators Certificate in November and  now plans to start Lusaka –Lilongwe and Lubumbashi services with a J41 later upgrading to a B737.  (Feb 2013)

SAA's Board has suspended Acting CEO Vuisilye Kona over ‘certain allegations’. Mango’s CEO Bezuidenhout fills the gap.  A new search is underway for another CEO with at least a little longer lifespan. SAA's  next Restructuring Plan is to be presented to the government on 2 April. At least it isn't 1st April.  As we note above, Acting  CEO, Nico Bezuidenhout, says the underlying problem is that 70% of previous recommendations were never implemented. Maybe most recent senior managers simply haven't lasted long enough?(Feb 2013)

The company is seeking to boost cash through refund of pre-payments by restructuring its outstanding  order for 20 A320s . (Feb 2013)

SkyWise's Air Service Licence has been granted and AOC application is to follow. The plan is to launch services on the already well supplied Capetown- Johannesburg route and the  end of the year with leased B737-300.  Pricing is intended to be 20% lower than current low cost carriers. Nothing like telling hem in advance. (Feb 2013)

3.  WEST AFRICA

Aero has added a Dash 8-400 to its fleet and may replace all B737-500s with Dash 8-400s .

The company experienced strike action by two Unions caused indefinite suspension of all services for a brief spell .‘Unpaid salaries/poor conditions’ were cited as the cause of the strike. Have we heard that anywhere before? (Mar2013)

Air Cote d’Ivoire from 1st February added new routes to  Ouagadougou, Yaounde and Pointe Noire to its network. (Feb 2013)

Arik Air is to sign an agreement with Lufthhansa Technic to build  a new MRO in Lagos.  Bombardier and Boeing will also have undisclosed interest. (Mar 13)

ASKY Codeshare with Ethiopian has been extended to include most Ethiopian Addis Ababa routes (Feb 2013)

Camair-Co new CEO Matthijs Boertien announces expansion of its domestic network to use 3 MA60 turbo-props ordered in Nov 2012. They should talk to Air Zimbabwe, or at least their customers about MA 60s. Their current fleet is 2 B737-700s and a  B767-300ER  .(Feb 2013)

Cronos Airlines (Equatorial  Guinea) is adding an A320 to its MD87 plus 2  BAE146s wet leased from Fair Aviation of South Africa.  It operates a domestic network and cross borders to Douala and Cotonou.  (Feb 2013)

Punto Azul (Equatorial Guinea) is wet leasing 3 ERJ145s to expand its regional network from Malabo. (Feb 2013)

4.  NORTH AFRICA

Egyptair will resume daily Abijan services via Accra  from June.   (Feb 2013)

Tunisair is launching 3 weekly Ouagadougou/Niamey A320 flights in March. (Feb 2013)

5.  NON-AFRICAN AIRLINES

Air Mediterranée (France)  will in April launch a weekly Marseilles to Dakar A321 frequency(Feb2013)

Alitalia is increasing its Rome – Tripoli frequency to twice daily in March. (Mar2013)

Etihad has increased Khartoum frequency to daily. A320 s  (Feb 2013)

Fly Dubai adds Juba to its network in April.  In the same area Addis, Khartoum and Djibouti  are already served (Feb 2013)

KLM from18 March KLM has 5^th freedom rights on their 3 weekly Amsterdam- Harare- Lusaka- Amseterdam flights. It's not only the Gulf fraternity who look for incremental revenue from local sectors. (Mar 2013)

Lufthansa is in March shrinking its  Khartoum schedules from 6 to 4 weekly (Feb 2013)

6.  MISCELLANEOUS

Ethiopia's  Government has confirmed its policy is to "protect the country's airspace and Ethiopian Airlines" from foreign carriers, the Gulf ones in particular, whom he accused of "having an unfair competitive advantage, for example, cheaper priced Jet A1 fuel"  The accusation is often heard but has never yet been proved.  The Gulf airlines of course only do what Ethiopian has been doing very successfully for the last 50+years,- drawing 6th freedom traffic out of everyone else's home bases, so Ethiopia's defensive stand is rather inconsistent with their airline's own strategy.  If other countries followed Ethiopia's lead and clipped their wings there would no doubt be howls of anguish. The reality is that, like it or not, sixth and fifth freedom carriers everywhere have stimulated the market and bring far more to country's economies than they would gain from keeping them out. The problem is more that once they are in they need to be kept in so that city pairs sudenly have their frequencies decimated.(Feb 2013)

Ghana experienced a shortage of Jet A1 fuelin February. Domestic carriers' operations were particularly affected as result. Tankering largely dealt with the problem on other routes.(Feb 2013)

Ghana- Ever since its first days of independence in 1958 , Ghana has always wanted its very own national carrier. This hankering has over time cost it a lot of money. First came the Russians bearing  8 almost useless 4 engined medium haul Il-18s which were cheap to buy/borrow money for but had low engine lives and had to be maintained by frequent trips home for fixing. Various recipes have subsequently been tried and in one way or another failed. Staff numbers and management failures have been the biggest bugbear. Undaunted, Ghana's   President is lining up for another go and has  announced a feasibility study into a new public/private finance national carrier. Oh , and there's plenty of time. It doesn't have to be up and running until the end of the year. Place your bets now.  (Feb 2013)

Liberia Monrovia’s Roberts Field Airport is undergoing a US$10m upgrade and a new Airport also being planned (Feb 2013)

Niger.  Here comes Turkish. The government has announced the  creation of new national carrier with Turkish Airlines as a strategic partner. Domestic and regional services are envisaged.  The old Air Niger was dissolved in 1993 (Feb 2013)

Nigeria's   Senate  Committee on Aviation is to launch a review of all air services agreements that designate multiple points within Nigeria alleging they disadvantage local domestic carriers. That's a good way of discouraging travel to the capital Abuja. The British are probably in their customary position as first on the grid for a hard time.
(Mar 2013)

Nigeria The Senate Comittee on Aviation has sacked  Dr Demuren, Director General of the Nigerian Civil Avition Authority due to his “unsatisfactory response to the numerous concerns of Aviation Sector stakeholders”. Not an unfamiliar one which usually means he wouldn't do as he was told. The Director of Aerodrome Services, Joyce Nkemakolam, has been appointed as acting Director General. We wish her well. (Mar 2013).

Nigeria  A Chinese contractor is to start work on new terminals in Abuja, Lagos, Pt Harcourt, Kano in June 2013 (Mar13)

Sierra Leone has signed a US$198m contract with China for the construction of a new airport 60kms from Freetown. The distance isn't ideal but anything is better than the ferry or helicopter ride from the city to Lungi, which discouragingly involves overflying previous hardware en route.The project uses China EXIM Bank funding.which is relatively easy to obtain,-subject to some tough terms and conditions, possibly extending well into the future. (Feb 2013)

Somalia construction has begun on the new Mogadishu terminal which was promised when Turkish Airlines started services . The contractor and funding are both Turkish (Mar2013)

South Sudan's  government has signed a deal with AtlasJet (Turkey) for the creation of a new regional carrier. It may be assumed that this is on a costs plus basis (Feb2013)

Sudan's government  has, as a result of US sanctions barring almost anything else, negotiated the purchase of 5x Antonov 148/158s for Sudan Airways.  (These aircraft are rare and and look pretty much identical to how a twin engined BAe 146 would have looked if that once mooted idea had ever been proceeded with).( Feb  2013)

South Sudan is preparing to establish a Civil Aviation Authority leading to full ICAO recognition (Feb 2013)

Uganda's Government has mentioned possible investment in Air Uganda before the end of the year. Why is not obvious as they have bailed out of a previous debt ridden version and until now wisely shown no enthusiasm for going back for more.(Feb 2013)

Zambia's removal from the ICAO Safety Watch List is getting closer following a positive December 2012 audit. Removal from the EU's Ban List may follow.  The recent 2012 Civil Aviation Act established an autonomous CAA, a crucial ICAO requirement (Feb 2013)

British Airways: Despite being established there since at least 1947 (with Solent flying boats) and an almost constant operator ever since,  BA abandoned Dar es Salaam at the end of March. Its three weekly nonstop flights to London were not enough to cope with daily offerings by Emirates, Qatar (twice daily),Turkish,Kenya Airways and Ethiopian. Faced with an option of double or quit and the forthcoming higher ownersip costs of 787s against the current well written down 767s, the decision was to quit .One of the results is that Dar es Salaam no longer has a daylight option to the UK/Europe.

-John Williams-

Ryanair's 737 order,- Bad news for some others?

Michael O'Leary was on good form recently when announcing his airline's order for 175 new Boeing 737-800s, of which 75 are likely to be for fleet replacement and 100 for further expansion. This comes at a time when Easyjet is yet to find the right price in talks with Boeing and Airbus and as O'Leary puts it "Europe's flag carriers are getting significantly smaller".

Both things are significant.

Firstly, with Ryanair having taken up most of the slack on the existing 737 production line pending the time in 2017 when the enhanced MAX versions replace it, Boeing is no longer under such intense pressure to do a deal simply to keep deliveries moving and the plants and people occupied. As on cruise lines and many other businesses, few customers, if any, pay the actual list prices . In this instance it will have been worth Boeing's while to have offered Ryanair a very good deal to keep the lines flowing smoothly. The costs and organisational difficulties of substantially slowing them down and then ramping them up again are enormous. Now they don't need to offer anyone else a similar one , unless the prospect of recapturing Easyjet from Airbus makes it  strategically worthwhile in the long term . In all such things , one more order for you means one less for the competition so there is always a double whammy in prospect.

Pricewise this could all leave Easyjet in a difficult and exposed position. Airbus will also know that they probably don't now have to cut a deal with them to the bone. As result neither manufacturer is likely to offer the orange people as good a deal as Ryanair obtained. That means that Easyjet's cost of ownership of its next batch of aircraft would be higher than Ryan's for each of the ten plus years that they are likely to remain in the fleet . Reaction in Easyjet's boardroom at being beaten to the draw may well be "Ouch".

Secondly the general retreat and consolidation of Europe's legacy airlines in the face of the low cost airlines on short haul and the Gulf newcomers on long haul has been conspicuous for ten years or more. BA started its retreat in 1997 with the decision to forget about volume, shrink the rear cabins concentrate on the premium classes and go for higher returns on what they do through increased average yields and return on each square inch of floorspace. This has signalled an acceptance of steadily decreasing market share on many routes  The refusal to fight back has given the Asian and Gulf airlines every encouragement to go for the jugular and pile on routes, frequencies and sheer volumes of seats. The growth of these carriers volume low yield business has provided the revenue rock on which to grow still further until now their scale of operation can be overwhelming. They are able add more frequencies which again add to their business at the expense of those who do not can not react and the downward spiral for the legacy airlines continues.

On short haul the former national carriers, notwithstanding the setting up of some secondary hubs,-eg Munich, Barcelona, -have stuck to their business models of concentrating primarily on their home base hubs or at the most flying between their home countries and others but not between two or more othes either using sixth freedom rights or by setting up local national subsidiaries. Some innovative responses such as DBA and franchises have been tried and then abandoned, not through failure and reluctance to take the next essential steps to develop them by making the necessary next steps. A sort of managerial and financial vertigo sets in , aided by old empires within the core airline seeing such things as a threat to themselves. They become terrified at the prospect of investment . Much of this comes from the definitions of accountancy . Leases and loans for new aircraft . The fact that they are self liquidating year by year as the remaining term of the lease reduces and that they are more of an operating cost than a crippling financial burden is not understood in the conventional ivory towers. Perhaps they should refer to the BOAC 1966/7 Annual Report and Accounts which explains it all in stark simplicity : "These loans will be repaid during the lifetime of the aircraft". If they were seen on this basis the nightmares would fade and the opportunities would take centre stage and the thinking would be set as free as that in Dubai, Abu Dhabi, Doha and Istanbul . The simple fact is that on the day the accountants declare "We have no debt", the operating part of the airline will be declaring "We have no aircraft".

The World's Greatest Con. Codeshares don't give you what it says on the tin. Baked Beans do.

Every so often airline X will  outrageously claim that by doing a deal with airline Y it has extended its network by 2000 flights a day,- or whatever. The truth of course is that it hasn't done anything of the sort . It may have slapped its code and thereby an override commission of around 5-10% on anything it sells on someone else's flights under its misleading code, but that's the sum total of it.

The latest bit of such hype comes from the former "World's Favourite" whose divorced from its age old partner/adversary/partner Qantas on the Kangaroo route comes through this weekend. Their new best friend of necessity is age old adversary/competitor and now partner as well (Yes, - all these things simultaneously exist in Alliance relationships although some are naive enough to believe they don't and it's all love and brotherhood), Cathay Pacific. This is the same Cathay Pacific who made BA's extensions to Taipei and Manila unviable by prevailing on the Hong Kong government to pin back their permitted uplifts on the trans China Sea routes and who are about to outfly the auld enemy by 5 daily services to 2 on the key Hong Kong-London route.

The BA's  Southwest Pacific supremo proudly proclaims ""Our new codeshare with Cathay Pacific will allow British Airways to serve all major Australian cities" (like it once did). Er, no. Offering BA's code is a very different thing to offering BA's actual brand , product and people. It's literally what it says on tin that counts . That's "Cathay Pacific" on each and every one of these new codeshare flights between Hong Kong and Australia.Anyone who chose them because they like BA is therefore not going to get what they bought.

The same thing applies to any codeshare flight anywhere in the world. Other than for the actual operating carrier whose name is painted on the outside, the code on the ticket may carry none of its brand propositions or characteristics. The customer may stand before the departures board and  see that he or she has several options for travel to their desired destination. Several timings are all the same so then there is the choice of oriental, continental European, British, American and even South American brands and annd they mean in terms of  people and types and styles of service. Great, they like the South American offering but don't care much for the European so reach for the I-pad and book it. Tough luck though when it comes to actual travel. That's the European livery, aircraft, people and product out there on the ramp and that's it. No choice.OK there were things about it being a codeshare and who the actual operator was in the small print but that is not the point. Code and aeroplane do not match. Pure and simple.

It is unlikely that this sleight of hand would be allowed in any other industry. If you buy a Mercedes that's what you get. Not even a lookalike will do and certainly not a Trabant.

Alliance and codeshare addicted airlines eulogise about the huge customer benefits of booking within one of them. Easy interlining, through checked baggage, fares etc. Yes, but the customer had all of those and across  virtually every airline and hub airport in the world in the bad old days before codeshares and alliances crept in. Underpinned by the bribe of frequent flyer programmes, the balance between hub airports has been changed, some (notably Heathrow) now offer individual passengers half or less the connections they did in the days of freeflow between all carriers. Benefit or loss and to whom?

There is a lot more to come on the whole question of alliances and codeshares, whether they are really in the public interest or work in favour of the airlines fixing fares and regulating capacities and whether the large or the small airlines benefit most. The same goes for frequent flyer programmes , first introduced in their present form by Pan American  in the early 747 days, the 1970s.? Are they really a customer benefit or do they just protect the airlines from having to compete on price, frequency, network, product and style. If they do, the regulators have been negligent in not picking them up for anti-competitive behaviour?

We will come back to those questions. Meanwhile the simple fact about codesharing  is that, unlike when you buy a tin of Baked Beans, there is no commitment that you are buying what it says on the tin.

No bonus for IAG's Willie Walsh.

OK, so Willie Walsh has still enjoyed a total over over £ 1 million remuneration for 2012 and is not therefore facing destitution, but his basic pay has been frozen for a second year running and he isn't getting a bonus.

The reason is covered in our previous item but one can add to Iberia's thumping losses a couple of unfortunate things on the BA side of the balance sheets.

First there is the announcement by Brand Finance this week that the world's most valuable airline brand is now Emirates at $4.2 billion. Lufthansa is second and BA is not in the top ten. What strategic errors over the past twenty or more years and still ongoing have led to that?

Second there is the news that Easyjet has joined the FTSE 100 for the first time. That's not down to Walsh, but his predecessors in BA did give them a bit of help along the line, firstly by selling them the very promising low cost "Go" which could have become the future of BA shorthaul had the company had the courage to go for it and give it the investment it deserved and secondly by letting the orange people have its high quality Iberian peninsular focused franchise GBAir. These two moves saved Easyjet a lot of time and trouble on the way to achieving its present size and network reach. No doubt they are most grateful for the helping hand. A little more help has been given this week by Iberia and BA cancelling many of their flights to Spain due to the second of several Iberia 5 day walkouts. Easyjet have, as at the time of the winter snow disruptions, been the most reliable way to get there. Every little helps as Tesco say.

Interestingly Walsh says in defence of the merger/IAG takeover that one benefit it has had is to reduce the competition Iberia previously provided to BA. Where was that to exactly? Both seemed to do reasonably well on the routes served by both and Iberia was barely on BA's radar screen as a competitor anywhere else other than maybe to South America which has always been of relatively low importance to the British brand. In Europe Easyjet had, with its dynamic but friendly low cost approach become a far greater competitor to BA than lackluster, legacy Iberia ever was and has inevitably taken much of the growth. On long haul routes Emirates and its Gulf companions, Qatar and Etihad have been conspicuously successful and continue to grow by the day, fuelled by geography, investment and some of the best service in the industry. Iberia's significance as a European competitor was therefore small and as a worldwide one almost nil. That was therefore not a very convincing claim. Mr Walsh would have been better off  either staying positively silent or just saying that life has been tough and that cutting through Iberia's labyrinth of deeply entrenched inefficiencies is a nightmare which is impeding IAG's forward growth and ability to generate the cash it needs for investment in the future, but that he is the man to do it. Which he probably is.