Showing posts with label African Business. Show all posts
Showing posts with label African Business. Show all posts

Wednesday, 1 February 2017

Afriqiyah's flight to safety

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When Afriqiyah Airways Flight 209 touched down at Malta International Airport on 23 December 2016, its arrival was anything but the illustrious new beginning management had envisioned at the gateway. For more than a year, the state-owned Libyan airline has been laying the foundations for a new subsidiary, PanAfriqiyah, on the Mediterranean island – one that can bypass the lawlessness of its home nation and restore the company’s battered fortunes. Instead, Flight 209 was a product of that very lawlessness, targeted by hijackers with fake weapons and a promise to kill all aboard if the domestic Libyan flight was not diverted to Malta...

Tuesday, 1 November 2016

Somalia's image problem

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News that Somalia’s presidential and legislative elections have been postponed until November came as no surprise to critics of the country’s fledgling government. Twenty five years after the outbreak of civil war, Somalia remains one of the most lawless and unregulated places on the planet. Holding elections in the fractured country was always going to be a messy affair, even with clan elders casting votes on behalf of their communities.

The shaky progress so far made towards normalisation of the political and economic landscape was underscored in a recent article by The Economist, entitled “Most-failed state”, which painted a depressing picture of a nation unable to find its feet and succumbing to an ever-deteriorating security climate.

Yet while the shadow cast by Al Shabaab, the Al Qaeda-linked terrorist group, looms large over daily life in the country, Somalis at home and abroad are beginning to challenge the nihilistic narrative that dominates media coverage of their struggle. Angered by what they saw as one-sided, sensationalist reporting in The Economist, Twitter users jumped on the hashtag #CorrectingTheEconomist to highlight Somalia’s slow but steady progress in recent years...

Friday, 1 January 2016

Open skies still up in the air

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"The African Union is as old as the European Union. The European Union has achieved a lot, and the African Union has not achieved as much." So said Tewolde GebreMariam, chief executive of Ethiopian Airlines, during the annual meeting of the African Airlines Association (AFRAA) in Congo Brazzaville in November.

GebreMariam has earned the right to pass judgement. Since taking the reins at Ethiopia's flag-carrier in 2011, he has continued and expanded the ambitious growth strategy designed by Girma Wake, his illustrious predecessor, who laid the groundwork for Addis Ababa to become the continent's pre-eminent aviation hub. Today, the only thing growing faster than Ethiopian Airlines' fleet is its bottom line – net profits have quadrupled over the past four years.

Elsewhere on the continent, however, aviation success stories are few and far between. The African Union must accept some of the blame...

Tuesday, 1 December 2015

Interview: Edgardo Badiali, Libyan Wings CEO

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Libya witnessed a surge in commercial flights two years ago as expatriates and oil workers flocked to Tripoli, eager to contribute to – and profit from – the post-revolution recovery. With Muammar Gaddafi out of the way, hopes were high that the country would transition to a prosperous, peaceful democracy. Flag-carriers Libyan Airlines and Afriqiyah Airways picked up most of the surging traffic, competing with foreign airlines such as British Airways, Lufthansa, Alitalia, Emirates Airline and Etihad Airways.

Passenger demand was so buoyant that, in November 2013, a group of local investors unveiled Libyan Wings, a start-up airline that planned to launch domestic, regional and intercontinental flights. The company paid deposits for three widebody Airbus A350s and four smaller A320neos...

Sunday, 1 November 2015

Kenya Airways in freefall?

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Kenya Airways posted the worst financial result in the corporate history of its home nation this summer, when it announced a full-year loss of 25.7 billion shillings ($254 million). Management at the flag-carrier, which was privatised in 1996 but is still 29.8% owned by the government, now face an uphill struggle in convincing politicians and the public that they deserve another shot at commercial viability.

The sheer scale of the losses – eight times deeper than the previous year – has prompted soul-searching in a country where 46% of the population lives below the poverty line. A Senate Select Committee is now pouring over the disastrous result, with some MPs openly calling for criminal proceedings against airline bosses.

However, while the prima facie evidence points to a series of strategic blunders, parliament's investigation has yet to uphold any of the allegations of corruption that have been bandied around by the press. In truth, Kenya Airways' predicament is far from unique in African aviation, and its commercial fortunes are at least partly influenced by external factors beyond the control of management...

Saturday, 1 August 2015

Old rivals become brothers in arms

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Airspace over Somalia has been considered a no-go area by most foreign airlines for two decades, but progress on the security and political fronts is now prompting a surge in commercial flights.

Flydubai, the short-haul affiliate of Emirates Airline, became the latest international carrier to add Somalia to its network in March, when it launched a four-times weekly service to Hargeisa, the capital of the semi-autonomous republic of Somaliland. Ethiopian Airlines and Turkish Airlines launched services to Somaliland and Mogadishu respectively in 2012, gradually upping capacity with higher frequencies and larger planes as demand snowballed. Qatar Airways is among the major carriers now evaluating a route launch.

As a litmus test for Somalia’s economic prospects, improved connectivity can only be good news for the country and its citizens. Yet it could be a double-edged sword for local airlines that flourished by braving the skies when foreign operators were nowhere to be seen...

Wednesday, 1 July 2015

Last chance saloon for SAA

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Since the turn of the century, beleaguered South African Airways (SAA) has embarked on no fewer than eight failed turnaround strategies. Having now completed an emergency “90-day action plan” to restore near-term solvency, it is resuming the ninth such attempt.

The heavily loss-making airline has in many ways come to embody everything that is wrong with state-owned flag-carriers: commercially profligate, lumbering companies whose cost structures hark back to a bygone era of luxury flying. While its European and North America competitors were long ago jolted into reality by a wave of deregulation and privatisation, SAA continues to live in its government’s pocket, hiding behind a wall of protectionism that props up the parastatal while holding down the private sector...

Wednesday, 1 April 2015

Floriculture keeps its cool

Full article in JPG format: page 36/37 & page 38/39

On an average day at the Aalsmeer flower auction in the Netherlands – long considered the flower capital of the world – some 20 million stems will change hands. During peak holiday periods trading in the country, which handles around 52% of global volume, is even more frantic.

The week running up to Valentine’s Day 2015 saw an estimated 200m red roses and tulips, 100m assorted other varieties and 20m pot plants exported by truck and air from Amsterdam. Many of those flowers had just arrived from Nairobi, which despatched 45 aircraft freighters to the Dutch capital that week alone.

It wasn’t always this way. While few exporters emerged from the global economic downturn unscathed, shippers of price-elastic, discretionary goods bound for Europe were particularly hard hit...

Thursday, 1 January 2015

Interview: Olgan Bekar, Turkish Ambassador to Somalia

Full article in JPG format: page 56/57 & page 58

Anyone who doubts Turkey’s long-term commitment to Africa need only look at the growing number of star-and-crescent flags fluttering outside diplomatic missions across the continent. The distinctive red motif now adorns 36 embassies in Africa, three times as many as in 2009.

Each new mission speaks to the growing inertia of commercial and political ties between Ankara and its partners on the continent. Bilateral trade with sub-Saharan Africa is up tenfold since the turn of the century, totalling $7.5 billion in 2013. Among Turkish contractors, Africa now accounts for 19% of international business volumes. Turkey’s heavy-duty exports – notably iron, steel, machinery and vehicles – are helping the continent down the laborious path of industrialisation.

One embassy, though, stands out less for its economic providence than the simple audacity of being opened in the first place...

Wednesday, 1 October 2014

Interview: Yissehak Zewoldi, ASKY Airlines CEO

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On 20th July, as the full scale of West Africa’s Ebola crisis was slowly becoming apparent, a 40-year-old Liberian man took a routine ASKY Airlines flight from Lomé, Togo to Lagos, Nigeria.

The passenger, a government official named Patrick Sawyer, had started his journey in Liberia’s capital Monrovia. He was en route to attend a meeting organised by the Economic Community of West African States (ECOWAS) in Calabar, southern Nigeria, but never reached his final destination. By the time his plane landed in Lagos, Sawyer was violently ill and required urgent medical attention.

Nigeria’s health minister, Onyebuchi Chukwu, later confirmed that this unfortunate individual had become the country’s first Ebola fatality – just one of the more than 2,000 confirmed deaths across the sub-region...

Interview: Willem Hondius, Jambojet CEO

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Media reports about Africa’s fledgling low-cost carrier (LCC) market tend to be dominated by the trials and tribulations of fastjet, the Tanzanian airline that began operations in November 2012 with the backing of EasyJet’s founder Stelios Haji-Ioannou.

After promising nothing short of a European-style low-cost revolution in Africa, fastjet’s slow progress has disappointed many. The London-headquartered company still deploys just three aircraft – one fifth of the fleet size it planned for 2014 – and cross-border expansion is proving troublesome.

Though international routes are finally being added, its share price has tanked 96% since launch as the business comes under intense regulatory pressure.

Yet across Tanzania’s northern border with Kenya, another African LCC is quietly gaining traction. Jambojet, a wholly-owned subsidiary of flag carrier Kenya Airways, began flying from Nairobi’s Jomo Kenyatta International Airport in April. The venture is headed by former KLM executive Willem Hondius, who, mindful of the problems that fastjet has encountered, is decidedly cautious when assessing progress to date...

Saturday, 1 March 2014

Air cargo feels the heat

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For an industry that is often described as a bellwether of global economic health, any under-performance in the air cargo market rightly rattles nerves across all sectors and regions. African airlines fared worse than most in 2013, growing freight volumes by just 1% compared with 7.1% the previous year.

Tony Tyler, chief executive of IATA, the industry body representing most of the world’s large carriers, describes air cargo as the “biggest worry for the airline industry right now”. About $6.4 trillion of goods are transported by air each year, and although world trade is growing roughly in-line with economic expansion, exports have historically expanded at twice the rate of global GDP growth. As well as hurting airline’s bottom lines, analysts fear that this sluggishness could point to a slowdown in the global economic recovery...

Thursday, 1 August 2013

South Africa's crash landing

Full article in JPG format: page 68/69 & page 70

Constant bickering between incumbent and future operators in South Africa underscores how its aviation sector – though by far the most developed on the continent – remains beset by problems. Ten of the 11 independent airlines created since market deregulation in 1991 have collapsed, most recently including 1time and Velvet Sky.

The tense atmosphere has begun spilling over into the country's courts. Private operator Comair is now challenging the 5 billion rand ($490 million) government guarantee afforded to flag carrier South African Airways (SAA). "We just have to wait for a court date," chief executive Erik Venter says when asked about his next move. He believes that state support enables SAA to under-cut fair market ticket prices, driving private carriers out of business...

Friday, 1 March 2013

West Africa via Banjul

Full article in JPG format: page 41 & page 42

Air connectivity in West Africa has been in dire straits ever since Air Afrique, the transnational carrier part-owned by Air France, filed for bankruptcy in 2002. While numerous small airlines have sprung up across the sub-region, their modest fleets have only succeeded in creating a patchwork of overlapping services – lacking the scale and cohesiveness needed to bind together West Africa's economic hubs. On routes such as Conakry, Guinea to Accra, Ghana (1,000 miles), detours of 6,000 miles via Paris are commonplace.

For travellers in the sub-region, the root causes are depressingly familiar. Weak infrastructure, high airport taxes and dubious management strategies have all played a part in slowing progress in the aviation sector. Nor are foreign airlines in any rush to change the status quo. The four main European carriers serving Africa – Brussels Airlines, British Airways, Air France and KLM – all enjoy high demand among West Africans due to limited competition from regional players...