Posts tagged as: boeing

Kenya: Deal That Earned New Kenya Airways Boss His Job

Photo: Nation Media Group

Kenya Airways’ Boeing 777-300ER aircraft at JKIA, Nairobi.

By Allan Olingo

Kenya Airways’ new chief executive Sebastian Mikosz is expected to increase its passenger numbers, further cut its operational costs, optimise its assets, review its networks, and reduce its dependency on shareholder bailouts.

The Polish national and aviation turnaround specialist is expected to push the national carrier towards self-sustenance in the short term, The EastAfrican has learnt.

Transport Cabinet Secretary James Macharia told The EastAfrican that the incoming chief executive got the job because of his strong aviation experience, reputation and record, which saw him turn around LOT Polish Airlines to profitability after years of government bailouts.

“Our airline is facing the same issues his previous airline did. We were impressed with his strategy, as KQ shares a similar challenge. He is up to the task,” Mr Macharia said.

“It’s his credentials that got him the job. We will be banking on them to make a success out of our airline. In him, we got the best candidate and his credentials will be a plus to our national carrier. We believe he has what it takes to navigate us back to profitability in the short term,” Mr Macharia said.

Mr Mikosz is expected in Nairobi mid this month. He is reputed to be a cost management sleuth, a factor that KQ badly needs to come out of the red. It also needs $600 million to stay on a straight course.

Mr Mikosz was tapped twice, in 2009 and later again in 2013, by the Polish government to head the LOT Polish Airlines, in which the state has a 69.97 per cent stake.

LOT, like KQ today, was in the middle of a financial crisis, had lost its market share, faced a labour crisis and consistently posted losses, which threatened to send it into bankruptcy. Within six years, in his two stints as the chief executive, he reduce the headcount, improved liquidity and changed the operations style cutting net losses to $42 million, from a massive $187 million.

But during his first stint at LOT, he faced opposition over his proposed workforce and salary cuts, while cutting down its dependence on government aid, and eventually quit after he failed to meet the government’s timelines in the turnaround plan.

The KQ board is pushing for a quick turnaround. In a previous interview, former board chairman Dennis Awori hinted at seeing the airline back to profitability in the next year or two, with a projected profit of $20 million.

“We want him to do the turnaround in the shortest time possible as we have a great outlook for the airline,” Mr Macharia said this week.

The incoming chief executive managed to convert the regional European airline into a long range carrier, optimising the use of its Boeing 787 Dreamliner fleet to achieve success. He is now expected to replicate that with KQ, whose strength has been intra-Africa networks, where it has been pushing the long haul customers to its Sky Alliance partners, including its other shareholder KLM, through codeshare agreements.

“We hope to start flights to the United States soon, and through his strategy, we should see more of such operations across the globe, farther in the Americas and East Asia,” Mr Macharia said.

In an interview with the Financial Times, Mr Mikosz said that he wanted as little government aid as possible for the Polish Airlines.

“I am always not happy reaching out for government assistance. We want the aid to be as small as possible, so we are pushing ahead with cost cutting measures to squeeze as much savings as possible from all the aspects of our operations,” he said.

Kenya Airways board chairman Michael Joseph said that outgoing CEO Mbuvi Ngunze will stay on as an advisor till the end of July.

Nigeria: What Hope for Kaduna Airport After Abuja’s Upgrade?

On Wednesday, the Nnamdi Azikiwe International Airport resumed operation, six weeks after it was shut down for the repair of its runway. Kaduna Airport was used as alternative while the repair lasted.

Industry sources put the cost of movement of flights to Kaduna, the preparation of the airport to serve as alternative, including associated projects and security at about N3.2 billion.

The Kaduna airport witnessed flurry of activities during the given period when most of the domestic airlines and few international carriers operated at the airport. The temporary designation of the airport as alternative to Abuja galvanised economic activities, creating inevitable market around the airport, as businesses yearned to meet miscellaneous demands of passengers, from eateries to other services.

But now that huge flight traffic has returned to the airport at the Federal Capital Territory, which has become beehive of activities since Wednesday as airlines, which battled with challenging logistics and initial low load factor and passengers that have to travel three hours from Abuja to Kaduna to board their flights, heaved a long sigh of relief.

To effectively serve as alternative to Abuja, Kaduna airport was upgraded to Category 9 with improved fire cover, expanded and rehabilitated runway, improved instrument landing system and erection of the passenger terminal, which was literally abandoned when the airport remodeling progamme was terminated.

The Voice Ominidirectional Radio Range (VOR) at the airport was repaired in addition to the repair of other navigational aids, air traffic personnel were deployed and airspace services and weather reports improved. The Federal Airports Authority of Nigeria (FAAN) was toying with security and perimeter fencing at the height of the period the airport served its purpose.

Before it served as alternative to Abuja, Kaduna airport was receiving about two commercial flights a day, so it was never a busy airport and that explained why there was no hurry to rebuild its terminal as the hajj terminal was put in use for the lean number of passengers that travel through the airport.

However, now that the airport facilities have been upgraded, THISDAY learnt that Arik Air, Medview and Air Peace may operate to the airport. Arik had been operating to the airport in the past.

Industry observers while acknowledging the upgrade of facilities at the airport lamented that they would become underutilised now that traffic has moved back to Abuja.

“From the road reconstruction to the deployment of security operatives, the Kaduna airport projects must have cost over N3.2 billion. They spent billion because all the vehicles from Abuja to Kaduna and vice versa were escorted by security operatives in their pick-up vans. So you can estimate how much that cost the federal government. When I travelled from Abuja to Kaduna to board flight to Lagos we were escorted by two policemen in Hilux van until we arrived. All the vehicles that left were escorted. They would put road safety (Federal Road Safety Corp) at the back; they would put police escort in front. The money spent on these activities is crazy,” an inside source told THISDAY.

THISDAY learnt that beyond serving as alternative to Abuja airport, there had been plans to upgrade the airport and make it a very active airport, operating international flights and also given it a prime place by government. To this end, there are indications that government will ensure that an international flight operates to the airport beyond Hajj flights, which operates at least twice every year.

THISDAY authoritatively learnt that the Governor of Kaduna state, Mallam Nasir El-Rufai had written to the management of Ethiopia Airlines to continue its operation to Kaduna after it served as alternative to Abuja, promising to give it all the support it needs. Although Ethiopia Airlines has not replied the state government but it may give that request a serious consideration because of the good relationship between Nigeria and the airline. Indications show that although the state government made that request to the airline, it is tacitly supported by the federal government and the aviation agencies.

“It has been part of the whole scheme when government announced that Kaduna would serve as alternative airport to Abuja while the runway in the later undergoes repairs. It was a scheme orchestrated to upgrade facilities at the airport, but what was done is not bad. We hope that government should show similar commitment to the upgrade of other airports. In case of emergency, Kaduna is the closest airport to Abuja, so a flight under distress after taking from Abuja has an alternative airport to land in. This is why we advised to ensure that all busy airports have airfield lighting and can operate in the night in case of emergency,” a source remarked to THISDAY.

But this is the reality check. Ethiopia Airlines said that it would designate the latest aircraft to come out of Airbus, Airbus A350 to Abuja airport. It landed at Abuja airport with 265 passengers onboard on Tuesday afternoon, a day before the reopening of the airport. The aircraft has about 343 passenger capacity. Ethiopia Airlines operates Boeing B777 to Lagos with about 350-400 passenger capacity; it also operates to Kano with Boeing B737-800 with about 140 passenger capacity; it operates to Enugu with Boeing 737-800 with similar 140 passenger capacity, so where will the passenger for Kaduna airport come from, considering the airports proximity to Kano and Abuja?

But besides this reality, which seems to stymie the plan to have Ethiopia Airlines or any international operation beyond Hajj services in Kaduna, the Kaduna airport has all the necessary facilities to function as international airport. It has the largest remote parking space among the Nigerian airports. Now it has the most upgraded landing aids and runway. Government should not allow these facilities to be idle, so it should tinker ways to make the airport more functional. Allowing it to be underutilised will not justify the huge resources spent on its upgrade.

Zimbabwe: State-Owned Airline’s Planes Grounded

Photo: Flickr

(File photo).

By Bernard Mpofu

STRUGGLING national flag carrier Air Zimbabwe (AirZim) has lurched into a new crisis after all of its five aircraft were grounded on Tuesday due to technical problems, forcing the airline to hire a plane from neighbouring South Africa in a desperate effort to fulfill some of its flight schedules, it has been established.

AirZim, which at Independence in 1980 boasted a fleet of 18 planes, is technically insolvent and operating at less than a third of that capacity.

The airline is reeling under a debt in excess of US$330 million that has hampered efforts to engage strategic partners in a bid to retain and grow market share.

Foreign currency shortages that have seen the nostro accounts of local banks depleted have ground AirZim’s operations to a halt as the company struggles to procure crucial spare parts.

Sources said this week the airline’s woes worsened last month after it failed to service most of its routes, leaving passengers stranded. AirZim executives blamed the Reserve Bank of Zimbabwe for delaying the release of foreign currency to buy spare parts needed for maintenance work.

The sources said one of AirZim’s Modern Ark (MA) 60 planes, which was servicing domestic routes, is awaiting spare parts bought from China while Boeing planes are also awaiting spares from suppliers.

Pilots at the airline, sources said, are also up in arms with management amid concerns the problems dogging AirZim could complicate renewal of their licences, an international requirement dependent on their flying hours.

“The situation at AirZim really got bad on Tuesday. No past chief executive has ever experienced what happened when five planes were grounded for being un-airworthy. By late Tuesday frantic efforts were being made to bring back one bird to the sky. As of Wednesday the Airbus was operational and it was servicing the Victoria Falls route,” said an aviation industry source.

Questions sent to AirZim chief executive Ripton Muzenda were not responded to while his phone went unanswered. Transport minister Jorum Gumbo’s phone was not reachable.

Insiders say Zimbabwe’s cash situation worsened last year on the back of dwindling exports, externalisation and government’s growing dependence on Treasury Bills which has crowded out private sector lending.

The deteriorating economic situation has seen international airlines like Qantas ordering travel agents in Zimbabwe to stop selling tickets for its flights after the International Air Transport Association (Iata) warned it is getting harder to move funds out of the country due to foreign currency shortages.

This comes as government decided to go it alone in turning around the airline, abandoning previous considerations to get a technical partner.

Late last year government engaged five international carriers from Kenya, Ethiopia, Singapore, Turkey and Malaysia to partner the troubled Air Zimbabwe with hopes of turning around the fortunes of the ailing and debt-ridden national airline.

Ethiopian Airlines, Africa’s largest carrier, recently told the Zimbabwe Independent that it is ready to rescue AirZim, but this depends on the will of the government.

Last year, cabinet gave Gumbo the nod to seek private partnerships for the debt-ridden flag carrier.

The national airline has continued to struggle, incurring cumulative losses and relying on Treasury for survival.

In 2011, Air Zimbabwe’s Boeing 737-500 was impounded in South Africa after failing to settle a US$500 000 debt owed to Bid Air Services for ground handling services.

Its largest aircraft, a Boeing 767-200, was seized by American General Supplies in London over a US$1,2 million debt in the same year. The plane was later released after the airline paid the debt, but Air Zimbabwe immediately stopped flying to London, one of its most lucrative routes.

The debt-ridden airline was kicked out of Iata’s flight reservation services in 2012 after failing to honour its obligations — which then stood at US$3,4 million — a development which resulted in limited business.

In 2013 cabinet approved a proposal by the AirZim board to raise US$15 million through 180-day commercial paper.

The airline also proposed the issuance of ordinary shares to raise US$30 million through private placement to local investors and the issuance of ordinary shares and preference shares to international investors and partners.

To clean up its balance sheet and shake off legacy issues, the AirZim board proposed the restructuring of the current debt through the issuance of money market instruments to current creditors.

The company also planned to issue 10-year corporate bonds to current creditors and third-party investors up to US$200 million to reduce the debt overhang affecting the entity.

Officials have been on roadshows canvassing for investors.

During that same year, the Transport ministry commissioned audit firm Ernst & Young to develop a business plan for AirZim which was approved by cabinet.

Government has agreed to take over the debts, through the Air Zimbabwe Debt Assumption Bill, to allow the airline and its technical partner to start on a clean slate.

Kenya: TUK Welcomes Joint Plan to Boost Aviation Studies

By Pauline Kairu

Aviation students at Technical University of Kenya will now receive training on Airbus and Boeing aircraft engine.

The students will train on an engine manufactured by General Electric.

The engine, books, training aids, used aircraft parts and manuals were donated Monday by Kenya Airways, General Electric and Boeing as part of a joint plan to improve aviation studies in the region.

Regional sales director for General Electric Aviation in Africa, Dr Rajiv Bissessur, said the need for skilled aviation professionals in the region was on the rise as the industry continued to grow.

“The donated CF6 engine will enable aeronautical engineering students to experience hands-on learning with one of the most popular wide body aircraft engine in service today and increase the pool of talented aviation experts that will be needed to service the needs of the airlines in Africa and around the world,” Dr Bissessur said during the handover ceremony at the institute.

KQ’s strategy and performance management director Thomas Omondi said the donation will ensure a stronger foundation of aeronautical skills.

Vice-chancellor Francis Aduol praised the partnership and said the donation will provide practical and research skills needed by students and, therefore, increase the university’s competitiveness.


Man Dies As He Attempts to Retrieve Thousands From Pit Latrine

A man suffocated to death while trying to retrieve money from a pit latrine in Ngiriambu village, Kirinyaga County. Read more »

Zimbabwe: We’re Ready to Rescue Airzim, Says Ethiopian Airlines Boss

Ethiopian Airlines, Africa’s largest cargo and passenger carrier, is dreaming big. After generating revenue of US$2,43 billion in the 2016 financial year, which saw a 70% jump in net profit and an 18% increase in passenger numbers to 7,6 million, the airline says it is buying an additional 55 aircraft, expanding its fleet to 142 planes. Zimbabwe Independent’s assistant editor Brezhnev Malaba (BM) interviewed the Ethiopian Airlines managing director (international services), Esayas Woldemariam (EW), in Victoria Falls at the launch of a direct flight from Addis Ababa. He also spoke about the revival of Air Zimbabwe.

Esayas Woldemariam chats to Transport minister Joram Gumbo in Victoria Falls at the launch of direct flights from Addis Ababa. Pics: Winstone Antonio.

BM: You have been involved in discussions to explore the possibility of reviving Air Zimbabwe. Any progress on that front?

EW: The talks still continue and we are very much focussed on helping in that initiative.

BM: How do you envisage to structure this Air Zimbabwe deal if it were to materialise? We are talking of an airline saddled with debts exceeding US$300 million.

EW: It all depends on the political will of the government of Zimbabwe, and on how they want to put it, whether it is going to be a joint-venture or management consultancy. Ethiopian Airlines is ready for all that.

We have all the human resources, the material resources and the financial resources.

We are looking forward to co-operating with Zimbabwe in a very big way so that we can be able to revamp the whole thing so that Zimbabwe and the rest of Africa are capable of combating the other airlines so that we can defend Africa’s resources and defend the traffic of African airlines.

BM: After studying Air Zimbabwe, what weaknesses have you identified in that struggling airline?

EW: It is just focus which is lacking, otherwise I have been able to learn that Zimbabwe is the most literate African nation, the people in Zimbabwe are very intelligent.

What needs to be done is to tweak that potential and direct it to the right channel so that we can channel it in the right direction. Instead of building 30 000 kilometres of railway from here to Cairo, we build just three to four kilometres of runway and connect people and goods and culture and services. It is cheaper to build and it’s faster to connect. Right now Africa is transacting only 10% internally and 90% with the rest of the world; we want Africans to transact with each other so that employment creation and capital benefit this continent.

BM: It must be a wonderful feeling to know that you are now flying to one of the top tourist destinations in Africa, Victoria Falls, one of the Seven Natural Wonders of the World. How do you feel?

EW: It really feels great because Ethiopian Airlines has always been inspired by the continent and the airline is very African, right down to the bone marrow. Our commercial tagline is “The New Spirit of Africa” and it’s our civic duty to our home continent to promote Africa’s nature, culture, history and wildlife. That’s why we succeeded in building the largest African network in the history of aviation. Ethiopian has been flying in the African skies since 1945.

BM: That’s a long time. What has changed since the old days?

EW: At that time, Ethiopian Airlines was inspired to bring Africa together. At that time, our commercial motto was ‘Bringing Africa Together”. The only way to travel from one part of Africa to another was via Europe, but Ethiopian Airlines came to connect the continent and now we fulfil our civic duty to our home continent. We connect Africa more than any other airline, be it African, American or European. We fly in Africa to 56 destinations. We are operating 87 aircraft.

BM: When are you getting these new planes?

EW: The 55 aircraft have been ordered. Many of them are already getting phased into the fleet. In fact, last month we received additional Airbus A350s, so these will come successively in the next five to seven years.

The 87 aircraft we are operating range from the largest Boeing 777-300, which is a 400 seater and the Dreamliner Boeing 787 and the Airbus A350, the most modern one and the Boeing 737-800, the Sky Interior with next-generation engines.

Our network spans from Tokyo to Los Angeles and just about anywhere in between. The only inhabited continent we do not fly to currently is Australia, but in the next couple of years we are planning to go to Melbourne.

BM: In recent years, we have seen an increase in budget airlines, particularly in Africa, small carriers that charge very low fares. Are they a threat to large airlines like yours?

EW: We are not competing with them; we’re co-operating with them. We want to see more budget airlines and more national carriers in Africa. The more the merrier.

We want to keep the traffic from the Middle East big three (Emirates, Qatar and Etihad) and from the Europeans and from the others, to boast African airlines, because Africans have more to benefit from co-operating than from competing. If tourists from Zimbabwe come to Ethiopia and Ethiopian tourists come to Zimbabwe, job creation, hotels and other related businesses will thrive and capital will remain in Africa and not leave the continent.

BM: You speak of the big three Middle Eastern airlines. How have you remained afloat in the face of such stiff competition?

EW: Number one, we’re African to the core, to the bone marrow. We know Africa better than anyone else. We know what the African customer wants by way of customer service, in-flight and on the ground.

The others cannot compete, this is number one. Number two, what we do is that, with African people going everywhere, we try to conduct good market research on the primary and secondary destinations in Africa. We have a very good vision, a very good strategy about where to go and when to go. We have good corporate governance. All these factors combined enable us to beat the competition.

BM: Ethiopian Airlines has been heavily involved in the establishment of a regional airline for West Africa, ASKY. How has that project gone?

EW: We have been assisting to establish ASKY airline in Lome, Togo, for the West African sub-continent. And also Malawian Airline, in Malawi.

BM: Why is it still extremely difficult to travel from one African country to another without having to fly via Europe first?

EW: We are changing that. Within the continent, without having to go via Europe, you can now travel to many places.

Ethiopian Airlines is committed to the building of an alliance of African aviation so that we can work with each other to serve the African continent.

Africa: Air China’s 2017 Summer/Autumn Schedule Released – Hub-Based Network Layout Shored Up

press release

Beijing — Air China’s summer/autumn flight schedule has become effective from March 26, 2017. The new schedule features 395 passenger routes, including 102 international routes, 14 regional routes and 279 domestic routes, serving 180 cities in 39 countries (regions), including 64 international cities, 3 regional cities and 113 domestic cities. Air China offers over 8500 flights and over 1.66 million seats per week. Utilizing its extensive route network and its hub in Beijing, especially after its admission to the Star Alliance, Air China can fly passengers to 1,330 airports in 193 countries.

Newly started routes include Shanghai – Barcelona, Beijing – Astana (capital of Kazakhstan) and Beijing – Zurich. In 2017, Air China will continue to expand its global route network with its hub in Beijing, operating flights to all the six continents including Asia, Europe, North America, South America, Africa and Oceania, with emphasis placed on key cities.

During the period of the summer/autumn schedule, Air China will start Shanghai – Barcelona, Beijing – Astana and Beijing – Zurich services. On May 5, the three times weekly Shanghai – Barcelona service will be started and operated with A330-200; on June 1, the three times weekly Beijing – Astana service will be started and operated with A320; on June 7, the four times weekly Beijing – Zurich service will be started and operated with A330-200.

These new routes will be the new bridges in the air linking China to Central Asia and Europe, and will also facilitate the economic exchanges between China and the countries along the “One Belt, One Road”, promoting the development of cooperation between China and more countries in the fields of economy, trade, tourism and culture.

The frequency of flights to Americas and Europe will be increased. During the period of the summer/autumn schedule, Air China will increase the capacity on more than 10 international routes, especially on routes to America and Europe. In the period of spring and summer, Chinese travelers to the America and Europe will keep on increasing. In response, Air China will tremendously increase the frequency of flights on routes to Americas like Beijing – Houston, Beijing – New York, Beijing – Los Angeles, Beijing – Washington, Beijing – Vancouver and Beijing – Montreal, and also on routes to Europe like Beijing – Minsk- Budapest, Beijing – Warsaw, Beijing – Vienna – Barcelona, Beijing – Munich – Athens, Beijing – Moscow, Beijing – Paris, Beijing – Stockholm, Beijing – Milan, Beijing – Madrid- Sao Paulo, Shanghai Pudong – Paris, Shanghai Pudong – Frankfurt, Shanghai Pudong- Milan, Lanzhou-Chengdu – Frankfurt and Chengdu – Paris, meeting the demand of the passengers for travel.

In addition to routes to America and Europe, flight frequency will also be increased on Asia routes like Beijing – Dalian – Hiroshima, Chengdu – Lhasa – Kathmandu and Chengdu – Hong Kong

The schedule of Beijing – Taipei’s flight CA189/90 will be changed from Monday/Wednesday/Friday/Sunday to Monday/Tuesday/Thursday/Saturday.

The frequency of flights to the western regions of China is increased. While further cementing its international route network, Air China has also been improving its domestic route network on a continuous basis. In this period of the summer/autumn schedule, flight frequency will also be increased on domestic routes departing from Beijing, especially Beijing – Korla, Beijing – Urumqi, Beijing – Urumqi – Akesu, Beijing – Zunyi, Beijing – Liupanshui and Beijing – Xichang.

At the same time, flight frequency on routes to the eastern and southern regions of China will also be increased like Beijing – Xiamen, Beijing – Hangzhou, Beijing – Shiyan and Beijing – Zhangjiajie as well as to the northern regions of China like Beijing – Linfen, Beijing – Tonghua, Beijing – Wulanchabu, Beijing – Jiamusi and Beijing – Qingdao.

The 787-9 Dreamliner aircraft will be operated on Beijing – Madrid – Sao Paulo route. In this period of the summer/autumn schedule, Air China will use Boeing 787-9 Dreamliner aircraft on its Beijing – Madrid – Sao Paulo route and Beijing – Shenzhen route, bringing a more comfortable travel experience for passengers. Air China is also using the Boeing 787-9 aircraft on its Beijing – Shanghai, Beijing – Guangzhou, Beijing – Chengdu, Beijing – Rome, Beijing – Los Angeles and Beijing – Auckland routes.

Logo –

KQ Flies More Passengers on Fewer Planes in Q3

By Kennedy Kangethe

Nairobi — Kenya Airways has continued to improve its passenger numbers despite operating a smaller fleet.

The airline has recorded a 4.8 percent growth in total passengers uplifted that stood at 1.12 million in the third quarter that ended December 31, 2016.

Passengers to Europe stood at 102,749, a growth of 2.8 percent, despite a 0.7 percent capacity decline while uplifted passenger traffic in the Middle East and Far East stood at 138,700 a 6.8 percent decline owing to a capacity reduction of 15.6 percent.

In 2016, the national carrier announced the sale of two aircrafts to a US-based carrier Omni Air International and signed a lease agreement with Turkish Airlines for one of its three Boeing 777-300 aircraft, reducing its carrying capacity.

Passenger numbers in Africa, excluding Kenya, continued to grow with uplifted standing at 530,842, a 5.2 percent growth, during the quarter compared to same period the prior year.

In Kenya, passenger uplift grew to 347,136, a 10.3 percent increase.

During the period the airline continued to invest in Africa, its mainstay. Capacity offered to Northern Africa region grew by 9.6 percent compared to prior year driven by increased frequencies to Addis Ababa and Juba.

In the East African region capacity grew by 7.1 percent driven by more operations on the Boeing 737-800, which has a higher capacity, and additional frequencies.

Capacity offered into West, South and Central African regions grew by 2.5 percent compared

to same period in the prior year with the introduction of the Nairobi-Entebbe-Bangui route, as well as the Nairobi-Doula-Bangui flight.

The airline, however, suspended Gaborone and Abuja operations in November in an effort to optimise operations in Africa during the quarter.

Additional frequencies offered by Jambojet into Ukunda, Malindi and Lamu saw capacity on the domestic front grow by 1.5 percent during this quarter compared to the same period the prior year.

The reduced capacity in the network impacted cargo.


‘Past Decade Saw Increased Products From Kenya’

Goods and services imported from Kenya to Tanzania between 2005 and 2015 increased from 64.8bn/- to 270bn/-, the… Read more »

Air Tanzania Bullish On 2017 Growth Prospects Despite Challenges

By Henry Lyimo

Air Tanzania Company Limited (ATCL) is relishing 2017 challenges in the aviation sector as it focuses to enhance domestic routes and venture into international market to regain market shares lost to rivals.

ATCL, Chief Executive Officer (CEO), Ladislaus Matide said he was optimistic about growth prospects in 2017 as the national carrier is preparing to launch more domestic flights and venture into Asian and European markets to boost tourist arrivals with new long-haul aircraft expected in June.

“We hope 2017 to be the best and challenging and we’re determined to compete,” he told the Business Standard in an interview adding the national carrier would soon become a force to reckon with after staff overhauling, restructuring of operations and fleet increase which have given it what it takes to compete with strong rivals in the market.

The government has revamped national carrier by buying new planes as part of plans to boost tourism and transport sectors. It bought two new Q400 turboprop aircraft from the Canada’s Bombardier Inc. which arrived in September and signed another deal with the Canadian maker for two CS300 jetliners and one Q400 turboprop aircraft at a cost of $200 million.

President John Magufuli announced on the 5th of December that the government has made initial payment for the purchase of a Boeing 787 Dreamliner, which is expected to be delivered on June 18 to boost Air Tanzania’s fleet to seven planes. Boeing confirmed that the government has ordered a single 787-8 Dreamliner for Air Tanzania on statement posted on its website.

The order was previously attributed to an unidentified customer on Boeing’s Orders & Deliveries website.

The US company on 13 December said the aircraft is valued at $224.6 million at listed prices. “The 787 Dreamliner will be the flagship aircraft as we renew and grow the Air Tanzania fleet. We aim to establish our long-haul capability by starting flights to Europe, Asia and the USA over the coming years and the 787 is the perfect aircraft to achieve this ambition,” an unnamed ATCL official is quoted in the statement by Boeing.

“Our hub airport at Dar es Salaam is well located to provide connections onwards across east Africa, capitalizing on the growing demand for tourism in Tanzania and throughout the region from intercontinental markets.

” The new fleet of the national carrier will be a springboard to growth, Mr Matide reckons. New and rehabilitated airports in various regions such as Dodoma, Mtwara, Mpanda, Tabora and Songea presents huge opportunities for growth as well as challenges, he said.

The national carrier preparations were being finalized for the national carrier to fly to Dodoma, Mtwara, Mpanda, Tabora and Songea as they seek to compete on domestic routes currently being served by rival airlines and venture into new regions with no air transport services.

“We are proceeding with preparations and once we’re through we will launch flights to the routes,” he said in an interview and explained that they were also evaluating business prospects, assessing conditions of the airports and availability of jet fuel. ATCL is currently flying to Kilimanjaro, Mwanza, Bukoba, Zanzibar and Mbeya.

It had also began flying to Arusha but the route was suspended due to operational issues, he said. The CEO said they had finalized preparations for Dodoma and the national carrier was expected to fly to the designated capital soon.

The government is revamping the national carrier by buying new planes as part of plans to boost tourism and transport sectors. Aviation industry in Africa is facing strong headwinds with airlines continuing to struggle and collectively remain in the red with the exception to Ethiopian Airlines and Air Mauritius.

The International Air Transport Association (IATA) announced early December that carriers in Africa are expected to deliver the weakest financial performance with a net loss of $800 million (broadly unchanged from 2016).

‘Cooperation, Not Rivalry, Is the Solution for Airlines’

Photo: Boeing

An ultra-long-range Boeing 777-200LR has been delivered to Ethiopian Airlines.

interviewBy Jonathan Adengo

A national carrier is home-grown. It serves the interest of the people at all times. Having a national carrier would create employment opportunities and African countries should have their own carriers

What does it take to run a national airline?

Running a national carrier like Ethiopian Airlines is a rewarding but demanding task particularly this time where there is unfair market share and severe competition on the continent, from the Gulf carriers. Knowing the domination of the non-African carriers over the indigenous African carriers in our continent is painful; it also depicts the toughness of the industry. Therefore, one can easily understand how demanding running such an industry is. So, managing the aviation industry takes a lot, including but not limited to, long-term planning, dedication, energy, skills, team work, innovation, being proactive and decision taking among others.

What advice would you give Uganda on plans to revive a national airline?

A national carrier is home-grown. It serves the interest of the people at all times. Having a national carrier would create employment opportunities and African countries should have their own carriers, which will employ Africans in maintenance, catering, cargo, airports, and the academy, among others.

So, we have to make sure Africans get the benefit of the fruit of African development. For that reason, I would advise Uganda to cooperate with existing national careers to make sure the jobs remain in Africa.

We believe in partnerships to create multiple national carriers in Africa. Our main target is to succeed and grow along with our African counterparts by playing our part in transfering knowledge, sharing experiences and training.

If Uganda Airlines is revived, how will this affect your operations?

The air transportation market in Africa is untapped and has vast space to play fairly, especially for domestic carriers. Our successful collaboration with our two partner airlines in Africa – ASKY and Malawian Airline is a vivid testimony that cooperation, not rivalry, is a solution to serve Africa, in the air transportation sector that has been dominated by the non-African carriers. According to AFRAA (African Airlines Association), currently more than 82 per cent of the African travel market is dominated by non-African carriers, leaving less than 20 per cent for home-grown indigenous African airlines.

What are the challenges facing the aviation industry in Africa? How have you mitigated them?

The African aviation industry is generally characterised by lack of well-developed airports and ICT infrastructure. African countries have a low stock of infrastructure, particularly in transportation and the potential for information and communication technologies (ICTs) has not been fully harnessed. These deficiencies have constrained gains in domestic productivity and present a critical bottleneck towards the growth of regional integration.

Another challenge is the slow pace of African Open Sky Agreement. The liberalisation of African skies is also a huge challenge for the growth of the aviation industry in Africa. It demands for a renewed political commitment from the continent’s leaders to realise liberalised African skies in accordance with the African Union Agenda 2063. Continuous lobbying is required for the creation of a single African air space and for aviation to be treated as a strategic public asset by mobilising the African Union Commission, industry actors and governments.

High charges associated with aviation are another challenge. Aviation in Africa is being taxed like tobacco and alcohol. The price of jet fuel is twice the global average and other fees for overflying, aircraft landing and parking are exorbitant. This makes African airline face unfair competition from Gulf-based airlines, which have access to government subsidies and cheap fuel. Lastly, the failure to cooperate is the major obstacle for the growth of the African aviation industry.

Gaining market access within Africa can be more difficult for African airlines than foreign carriers.

What solutions should African national carriers adopt to solve these challenges?

Ethiopian Airlines along with African Union, AFCAC, AFRAA and all African carriers are pushing for the implementation of the Yamoussoukro Declaration (YD). It is geared towards a comprehensive reform of the air transport industry and the unification of the fragmented African air transport market. With this open sky agreement, it is believed it will allow more African carriers to serve their own land than the non-Africans. In addition, Ethiopian Airlines has invited African carriers to use its modern and expanded aviation academy to train their personnel in all areas of aviation professions.

What are your future plans for the market?

Pursuing Vision 2025, Ethiopian Airlines, by then, will be a world-class African airline with a fleet size of more than 140, flying 22 million passengers, uplifting 820,000 tonnes of cargo flying to more than 146 destinations, generating $10 billion in revenue and $1 billion in profit.

Through Vision 2025, Ethiopian Airlines will be transformed into an Aviation Group comprising of seven profit centres: Ethiopian International Services, Ethiopian Regional Service, Ethiopian Cargo, Ethiopian MRO, Ethiopian Aviation Academy, Ethiopian In-flight Catering and Ethiopian Ground Services.

The implementation of the YD will help the African carriers to own more traffic rights and cross-border airline cooperation that can improve the market share and future prospects.

How have you been able to expand and remain profitable?

Ethiopian Airlines has grown in leaps and bounds over the past decade, establishing itself as adept in all facets of the aviation industry, technology leadership, network expansion and aviation mentoring.

Dedicated and highly committed workforce at Ethiopian Airlines has also made it possible to grow. We also have a long standing strong corporate culture. The airline has nurtured dedicated employees and management, who do not consider their association with their airline as a simple contract of employment for a monthly paycheck; rather they consider themselves to be in a long-term mission of building a competitive global airline brand for their country.

Our Cost Leadership stance has also contributed a lot to our achievements, producing the maximum value proposition at the least possible unit cost in the industry. In this regard, we have also a continuous cost-saving programme which enables us to observe any cost reduction ways in any of our working areas.

Another reason is a clear relationship with the Ethiopian government. Ethiopian Airlines is 100 per cent government owned. But ownership and management of the airline are completely separate. Management is handled by seasoned aviation professionals who run the airline on the standards of a normal profit-making business enterprise.

How has Ethiopian Airlines performed on the Entebbe-Addis route in the last financial year?

During the fiscal period from July 1, 2015 to June 30, 2016, our passenger revenue increased by 16 per cent. 35 per cent of our passengers are on our frequent fliers programme (FFP), a record high compared to last year 18 per cent FFP membership number.



Ethiopian Airlines

Tanzania: Magufuli Holds Talks With U.S Aircraft Manufacturer Boeing

Photo: Daily News

President John Magufuli talking with Boeing’s Director of Sales Jim Deboo.

By Louis Kolumbia

Dar es Salaam — President John Magufuli yesterday held talks with a senior official of American aircraft manufacturer Boeing.

Dr Magufuli’s meeting with Boeing’s Director of Marketing, Africa, Mr Jim Deboo, centred on the government’s intention to purchase a Boeing 787-8 Dreamliner plane from the company.

The government is currently implementing a comprehensive plan to revive the national carrier, Air Tanzania Company Limited (ATCL). Reports from the Ministry of Works, Transport and Communication said last week that talks between the government and Boeing on the purchase of the 787-8 were going on and an advance payment of $10 million (Sh21 billion) had already been made. The list price of the 787-8 is $224.6 million according to various international aviation websites.

The plane, which will be able to carry 262 passengers in a three-class configuration, is expected to be delivered in June 2018.

President Magufuli said the government was committed to strengthening the country’s aviation sector.

“The Fifth Phase government plans to purchase four more planes, including three large jetliners, as part of efforts to boost economic growth by making it possible for tourists to fly directly to Tanzania from their countries,” a State House statement quoted the President saying.

Dr Magufuli said while Tanzania was struggling to attract 2 million tourists annually, 12 million tourists were visiting Morocco every year.

“It is because we don’t have an efficient national airline. Tourists need to make several connections to visit Tanzania. This puts them off despite the fact that Tanzania is among five countries with the best tourist attractions in the world,” he said. Yesterday’s talks were also attended by Mr Doto James and Dr Leonard Chamriho, the Finance and Transport permanent secretaries, respectively.

The government also plans to buy a Bombardier Q400 NextGen turboprop airliner to be delivered next June and two Bombardier CS300 jetliners capable of carrying between 137 and 150 passengers, which are scheduled to be delivered between May and June 2018.

Bombardier Commercial Aircraft announced last week that it had signed purchase agreements with the government through the Tanzania Government Flight Agency (TGFA). The government’s plan to purchase a 787 Dreamliner has been greeted with mixed views.

While some aviation experts have praised the decision, others have called for caution , saying the global aviation sector was going through turbulent times.

In another development, President Magufuli yesterday bade farewell to African Development Bank (AfDB) resident representative Tonia Kandiero and Cuban ambassador Jorge Luis Lopez Tormo.

While Dr Kandiero is moving to South Africa after being promoted to AfDB Southern Africa director, Mr Tormo is returning home following the end of his tour of duty.


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