Thursday, 29 October 2015

Qatar Airways begrudgingly moves with the times

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Given that trade unions are banned in Qatar, it should come as no surprise that the International Transport Workers' Federation (ITF) has never been the strongest supporter of Qatar Airways. The two sides have been at loggerheads since 2013, when the ITF obtained copies of an employment contract for the airline's cabin crew. It was not impressed. Clauses prohibiting staff from getting married or falling pregnant proved particularly irksome, as did wider reports of overbearing treatment. Two years on, the global union federation is stepping up its campaign by calling on Barcelona Football Club not to renew its €150m ($165m) sponsorship deal with Qatar Airways...

Monday, 26 October 2015

Out of the ashes, a new Libyan airline takes flight

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Risk-averse entrepreneurs look away now.

In the notoriously volatile airline industry, even well-established operators are never more than a few months from bankruptcy. The threat is compounded tenfold for start-ups – and is incalculably higher in a warzone.

Small wonder that Libyan Wings, the full-service airline unveiled after the overthrow of Muammar Qaddafi, missed several planned launch dates.

Last year's near-total destruction of Tripoli International Airport, its planned home base, certainly didn't help matters. Nor did the wider unravelling of Libya's fractured political climate, with two rival governments claiming sovereignty in the country and an ugly franchise of Islamic State rampaging over contested territory.

But the airline's private investors have persevered, and under the stewardship of chief executive Edgardo Badiali Libyan Wings finally took to the skies in September...

Friday, 9 October 2015

Transaero pushed out into the cold

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Things don't look good for Transaero, Russia's second largest airline. Weighed down by estimated debts of 250 billion roubles ($4 billion), the privately-owned carrier had been pinning its hopes for survival on a reluctant takeover by Aeroflot, Russia's flag-carrier, which is majority owned by the government. That mega-merger, announced in September, seemed to offer a last-ditch alternative to insolvency. But Aeroflot has since walked away from the deal and two major lenders have now started bankruptcy proceedings. Winding the company up is considered "the only possible option", according to Alexey Ulyukaev, Russia’s economy minister. He blames "ineffective management" for its demise...

Thursday, 8 October 2015

Emboldened Flynas returns to growth

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Saudi Arabia’s Flynas is drafting a five-year expansion plan as the airline nears its first ever annual profit, gaining momentum from a strong Hajj season and the simplification of its business model.

Chief executive Paul Byrne – who was appointed last year after the failure of an ambitious long-haul expansion program – says he expects September to be the ninth consecutive month of profitability.

That marks a dramatic turnaround for a company that has been consistently loss-making since launching nearly a decade ago.

“We took care of what was losing money, and we just kept doing what was making money,” Byrne tells Al Arabiya. “The difficulty in our business is not being tempted to do something strange and wonderful. It does take a lot of discipline internally – to keep people focused on saving costs, getting the flight out on-time, getting the pricing right...

Thursday, 1 October 2015

Interview: Phee Teik Yeoh, Vistara CEO

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Having been flying for less than a year, Vistara, the full-service carrier jointly owned by Singapore Airlines (SIA) and Mumbai-based TATA Group, is a veritable minnow in the fiercely competitive Indian aviation market.

Despite ramping up operations quickly since its inaugural flight on 9 January, Vistara provides a mere 1.5% of seats in the vast domestic sector.

Its international market share currently stands at zero, much to the annoyance of chief executive Phee Teik Yeoh, and will likely remain there for some time owing to India's controversial 5/20 rule – a regulation that blocks local carriers from overseas routes until they complete five years of operations and deploy at least 20 aircraft...

Interview: René Décurey, Air Côte d'Ivoire CEO

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West African aviation was dealt a heavy blow in 2002, when Air Afrique ceased operations and the sub-region lost its only transnational carrier.

Based in Ivory Coast's economic capital Abidjan, the pan-African airline had been launched in 1961 as a joint venture between two French airlines: flag-carrier Air France and the now-defunct Union Aeromaritime de Transport (UAT). Two-thirds of Air Afrique's capital was held by an alliance of West African states, ensuring strong political support across the sub-region.

Following its demise, regional powerbrokers came together again in 2004 under the auspices of the Economic Community of West African States (ECOWAS) to establish a successor. Their efforts delivered ASKY Airlines, the Togo-based carrier part-owned by Ethiopian Airlines.

Air France and Abidjan may, perhaps, have felt sidelined by the move, but they would not be out of the picture for long...

Interview: Frank Legré, Air France SVP Africa

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As one of the largest and best-known airlines in the world, it was no surprise that Air France pulled out all the stops when unveiling its cabin upgrades last year.

The French flag-carrier introduced its new First, Business and Economy class products at four stations across the global network: Paris, of course, was a no-brainer; so too was America's financial hub, New York; likewise, perhaps, for the Chinese metropolis of Shanghai – but the fourth destination left many observers scratching their heads.

Libreville, the capital of the West African nation of Gabon, rarely finds itself bunched together with the New Yorks and Parises of the world. Yet it was this city of less than 800,000 people that rounded off the quartet...

Interview: Muneer Bankole, Med-View Airline CEO

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Less than a decade after starting life as a charter operator for the Hajj pilgrimage, Nigeria's Med-View Airline is building up its scheduled network across West Africa while looking for expansion opportunities beyond the sub-region.

"We are moving gradually in the next 12 months to make additional inroads into four new destinations: Abidjan [in Côte d’Ivoire], Conakry [in Guinea], Dakar [in Senegal] and probably Liberia," chief executive Muneer Bankole said during the IATA AGM in Miami in June.

The addition of several regional points will be a major leap for the Lagos-based carrier, which presently deploys five Boeing 737 Classics on scheduled services to four domestic cities (Abuja, Port Harcourt, Yola and Enugu) plus Accra in Ghana...

Interview: Rene Gsponer, Air Namibia Acting CEO

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"We know the low-cost carriers will come. It's just a matter of when," Rene Gsponer, Air Namibia's acting managing director, said in a stone-faced interview at the IATA AGM in Miami. "But we are ready for them – much more than we were two years ago."

A Swiss national, Gsponer landed the job of chief operating officer and accountable manager at Air Namibia in October 2013, following a lengthy stint as one of IATA's senior consultants.

His appointment came in the midst of a painful restructuring period at the Namibian carrier, whose government owner was rapidly losing patience with the parastatal for its heavy financial losses. After commissioning IATA to develop an urgent turnaround strategy, the airline's board was so impressed by Gsponer that it put him in charge of executing what had now become a do-or-die plan.

It took just one year for the consultant-turned-manager's vision to bear fruit, with Air Namibia announcing four consecutive months of profit in November 2014 for the first time in its history...

Interview: Adrian Hamilton-Manns, FlyAfrica CEO

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Just one year into operations, pan-African low-cost carrier FlyAfrica is making good on its ambitious growth plans by launching a new subsidiary in Namibia and securing political backing for a third offshoot in Gabon.

The airline group, which began flying from Zimbabwe in July 2014, is headed by chief executive Adrian Hamilton-Manns and part-owned by South African arms dealer Ivor Ichikowitz. Its business model involves setting up franchises across Africa through joint-venture agreements with local partners.

But despite spreading its wings faster than London-listed competitor FastJet – which first exported the European low-cost model to Africa in 2012 – the group has not been immune to the continent's regulatory headwinds...

Cape expectations

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Long-running management turmoil at South African Airways (SAA) took another twist in August, when human resources boss Thuli Mpshe became the latest person to head up the lossmaking flag-carrier in an acting capacity.

Mpshe took over the reins from Nico Bezuidenhout, the boss of SAA's low-cost subsidiary Mango, who has twice been called on to steady the ship after full-time appointees fell from grace.

His immediate predecessor, Monwabisi Kalawe, got the chop after apparently stepping on the wrong side of powerful chairperson Dudu Myeni.

Amid endless reports of boardroom bust-ups and personal feuds, Bezuidenhout succeeded during his brief tenure in executing SAA's emergency 90-day action plan and resurrecting the stalled long-term turnaround strategy...

A case of self-interest

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The chief executives of American Airlines and Delta Air Lines met with US Secretary of State John Kerry in September, stepping up efforts to convince Washington that the fast-expanding Gulf carriers pose an existential threat to the US airline industry.

Banding together with United Airlines and several trade unions under the so-called Partnership for Open and Fair Skies, they accuse Emirates, Etihad and Qatar Airways of receiving $42 billion in state subsidies over the past decade.

The alleged handouts – documented in a 55-page dossier released by the US lobbyists in March – may contravene the terms of the Open Skies agreements that America has signed with the UAE and Qatar. Those bilateral treaties allow the Gulf carriers to launch unlimited flights to the US mainland, but only if they operate on a commercial basis free from government support...

UAE carriers playing the field

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Even for aviation pundits well accustomed to the extravagance of the Gulf carriers, last summer's unveiling of the 'Residence' – an ultra-luxurious First Class product developed by Etihad Airways, the flag-carrier of Abu Dhabi – caught many in the industry by surprise.

Nestled in the nose of Etihad's double-decker Airbus A380s, the Residence comprises a living room, bathroom and double bedroom spread across 125 square feet of airborne real-estate. Passengers who stump up the $32,000 price tag for a one-way flight to New York are accompanied on their journey by a Savoy-trained butler and a personal chef. Nine smaller 'Apartments' fill out the remainder of the vast First Class cabin on Etihad's A380s.

While gawking at the sheer opulence of the Residence, journalists attending its May 2014 launch were quick to raise questions about the commercial viability of the product. Could Etihad really justify sacrificing so many standard seats for one single, ultra-high-yield customer? Would the super-rich clientele being targeted not simply prefer to charter a private jet?

Those questions – still unanswered today, owing to the lack of transparency in Etihad's financial reporting – lie at the heart of the seemingly endless controversy over Gulf-carrier business models...

Doha takes its own path

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In terms of overarching strategy, state-owned Qatar Airways has adopted the exact same business model as its neighbours in the UAE. Just like Dubai's Emirates Airline and Abu Dhabi's Etihad Airways, the Doha-based carrier uses a central hub as a bridging point to connect passengers between overseas destinations.

Qatar's geography at the crossroads of East and West unlocks a rising tide of intercontinental demand for the airline, while its government's deep pockets ensure that funding for infrastructure never runs dry. A nationwide ban on trade unions also helps to keep the workforce in check.

Dig a little deeper, however, and longstanding chief executive Akbar Al Baker is clearly stamping his own mark on the mega-hub model...