Monday, 27 February 2012

Interview: Khaled Taynaz, Libyan Airlines CEO

Libyan Airlines planning CSeries order, EgyptAir wet leases

Libyan Airlines has conducted a viability study into the Bombardier CSeries and will likely order four to eight of the aircraft, chief executive officer Khaled Taynaz has said. The Libyan flag carrier is currently repairing its existing Bombardier CRJ900s, which were damaged during last year's revolt against Muammar Gaddafi, but has received a "very good offer" to upgrade the models in about four years. Taynaz is also poised to sign a short-term lease with EgyptAir for some of its Airbus A330s, though the paperwork has yet to be finalised and upcoming merger partner Afriqiyah Airlines may alternatively loan the aircraft.

Outlining Libyan's fleet renewal plans in his first interview since the civil war, the CEO said repair work on damaged aircraft had progressed well and that the carrier is now turning its attention to long-term expansion. Five of the airline's eight CRJ900s have already been restored by Lufthansa, while two more should be airworthy by April and the eighth will be decommissioned. Libyan had also signed a five-year maintenance contract with Air France-KLM, which will complete repair work on the last of four damaged Airbus A320s by the end of February.

"We had an offer from Bombardier, who said we might replace our current CRJ900s and substitute them with the new CS100 and CS300," Taynaz said in reference to the CSeries order. "The holding company [Libyan Afriqiyah Aviation] asked me to make a study, and it's a very nice aircraft. So I find this a very good offer and a good deal for us, but not before 2015. We might replace all of them or we might leave two or three for desert flying, because we are getting good business now with the oil companies for the CRJs." The airline's two ATR 42s have also resumed charter services to the desert, and Taynaz said he saw "no harm" in diversifying his fleet further potentially with new Boeing orders.

Libyan is currently due to receive three more A320s, four A330s and four Airbus A350s. The CEO admitted that, as the country slipped into civil war, he had doubts about those orders. "Airbus said we lost our [delivery] slots because we didn't make our pre-delivery payments," he recalled. "We met them at the Dubai Air Show, they checked with Toulouse, and now we have the slots back." Two of the A320s will arrive in November and December of this year, followed by two A330s in May and June 2013. But Taynaz said the A350s are being reconsidered. "We have to study the 350s," he insisted, noting that Afriqiyah also has six on order. "Do we really need them? It was a deal made by the old government, and we don't know how good it is for us."

In order to expand its route network as rapidly as possible, the flag carrier is considering a short-term wet lease for an undisclosed number of EgyptAir's A330s. "They already sent us the draft contract to sign," Taynaz confirmed. "We want to start our long-haul flights with the Egyptian planes before our aircraft arrive next May." The A330s would be re-painted in Libyan's livery, and EgyptAir has agreed to start training Libyan crew on its line operations between the countries. "But we have not finalised the contract," he noted. "There's another offer from Afriqiyah. They have 330s and ... they suggested we take their aircraft instead of leasing them from outside. So we have two good offers there."

EgyptAir is reviewing leasing proposals from a number of carriers, a spokesperson told Aviation Exchange. Tourism in Egypt slumped 32% last year as civil unrest gripped the country, and the airline is expected to cut capacity on several European and North American routes in its upcoming summer schedule.

In 2010, Libyan and fellow flag carrier Afriqiyah secured a $1.1 billion loan from seven local banks for its Airbus deliveries. Taynaz did not say when the loan would be repaid, insisting that the authorities were prioritising the merger of the two airlines first. After 41 years of sclerotic governance, he is convinced that the prospects are now bright for Libyan business. "We have the means, we have the people, and we have the money," the CEO concluded. "There are still problems here and there, but these will dissolve as soon as the country establishes its new government. We are building a new Libya."