Interview: Nico Bezuidenhout, South African Airways Acting CEO

Full article in PDF format

When Nico Bezuidenhout stepped down as interim CEO at South African Airways (SAA) on 1 June, he handed successor Monwabisi Kalawe the daunting task of executing a 20-year turnaround strategy at the troubled flag carrier. Martin Rivers investigates whether SAA is at long last embarking on the path to profitability.

Public Enterprises Minister Malusi Gigaba, SAA's shareholder, has voiced strong optimism that Kalawe will "hit the ground running" in his new role, despite lacking any experience in the airline industry.

The new man takes over the helm from Bezuidenhout, an experienced industry executive who co-hosted the IATA AGM in Cape Town this June and now returns to his role as CEO of Mango, SAA's low-cost subsidiary. Kalawe's immediate priority will be implementing the turnaround plan – drafted collaboratively by Bezuidenhout and Gigaba – which aims to lessen the carrier's reliance on state support...

Interview: Theo Namases, Air Namibia CEO

Full article in PDF format

In late 2012, Air Namibia's very existence was brought into question by a wave of industrial action, leasing disputes and an increasingly impatient shareholder. Having successfully weathered the storm, chief executive Theo Namases is now plotting a course for calmer waters. Martin Rivers reports.

News that Air Namibia was trying to back out of a 12-year leasing agreement for two Airbus A330s sent shockwaves through the southern African nation last year, coming alongside repeated warnings from the government that its losses had become unsustainable. The wide-body jets had been billed as a key step towards turning around the airline's loss-making Frankfurt route, which is currently served by two fuel-inefficient A340s...

FastJet's turbulent winter

Full article in PDF format

Shares in FastJet halved in value over the course of two days in June, when auditor KPMG warned of "material uncertainty" about its ability to continue operating amid deepening losses. The Stelios Haji-Ioannou-backed carrier posted a net loss of $56 million across its FastJet and Fly540 brands during the 18 months to December 2012, prompting KPMG to warn that continued fundraising would almost certainly be required if the airline is to stay afloat.

But strong sales figures later that week coupled with continued progress in entering the South African market saw its share price immediately bounce back. Though the volatile stock was still 75% down on its January peak at the time of going to press, chief executive Ed Winter is confident the tide has begun to turn in Africa's fledgling low-cost carrier market...

Interview: François Bouteiller, Nas Air CEO

Full article in JPG format: page 22/23 & page 24

François Bouteiller, the chief executive of Saudi Arabia's Nas Air, announced his resignation last month after just 17 months in the job. He follows in the footsteps of predecessor Simon Stewart – whose tenure lasted barely a few months longer – and will now be succeeded by Raja Azmi, the former chief financial officer of Air Asia.

Although Azmi doubtless hopes to retain the top job for a lengthier period, he can expect to face the same challenges which confounded his forbearers at the low-cost carrier. Saudi Arabia's duopolistic air transport market continues to be characterised by excessive fuel charges, a commercially disruptive domestic fare cap, and a cultural landscape that does little to advance much-needed reform...

Southern Africa's local issues

Full article in PDF format

While financial turmoil at South African Airways often makes headlines in the sub-region, the Johannesburg-based flag carrier is far from the only troubled aviation asset in southern Africa. Botswana, Zimbabwe, Namibia and others are also struggling to develop suitable air infrastructure to match their relatively niche economies.

“Most governments in southern Africa face a quandary. On the one hand their national carrier plays a vital role in boosting trade and tourism, and on the other the airlines constitute a drain on the national treasury,” explains Nick Fadugba, chief executive of African Aviation Services and a former secretary general of AFRAA...

Fastjet's South African adventure

Full article in PDF format

Fastjet, the pan-African low-cost carrier backed by Stelios Haji-Ioannou, will begin South African services in July with a Boeing 737-300 wet-leased from local operator Star Air Cargo. Division chief executive Kyle Haywood believes that the launch will restore price competition in a market dominated by two low-cost players – Comair’s Kulula brand, and South African Airways’ Mango subsidiary.

But the myriad legal difficulties Fastjet has endured since its November 2012 launch show no sign of abating, with Comair chief executive Erik Venter already hinting that his new rival’s corporate structure may fall foul of South African law...

SAA's state shackles

Full article in PDF format

State-owned South African Airways surprised no-one in May when it said it was borrowing 1.5 billion rand ($167 million) to cover its near-term operating costs. The loan, secured against last year's 5 billion rand government guarantee, will be used as working capital while the flag carrier implements its latest turnaround plan – the ninth such strategy put before its shareholder.

Scepticism about SAA's ability to turn the corner has been fuelled by a spate of management resignations and dismissals, with Monwabisi Kalawe due to become its fourth chief executive in less than a year. Although his interim predecessor, Nico Bezuidenhout, insists that "green shoots" are emerging following last year's 1.3 billion rand loss, the airline's chequered history and its status as an end-of-line carrier has left analysts reserving judgment...

Iraqi Airways back into the fold

Full article in JPG format: page 24/25 & page 26/27

News that April was the bloodiest month in Iraq for almost five years has lent credibility to recent warnings that the country may be slipping back into civil war, fuelled by the Sunni Islamist insurgency across its north-western border with Syria. Some 595 civilians were killed violently in Iraq this April, the UN says, doubling the previous month's figure.

But that statistic, grim as it is, remains a world away from the nightmarish scenes at the height of the war in July 2006, when more than 3,200 deaths were recorded in a single month. The deterioration also comes as Iraq pushes through its 2013 budget, earmarking 138 trillion Iraqi dinar ($118.5 billion) of public spending. Though Kurdish lawmakers boycotted the session, Iraq's immense oil wealth is beginning to trickle down to ordinary citizens.

Amid the dichotomy of growing prosperity and deepening violence, flag carrier Iraqi Airways – which was grounded by sanctions throughout the 1990s – is doing its bit to bring Iraq back to the international fold...

The UAE and Canada re-engage

Full article in JPG format

Abu Dhabi-based Etihad Airways and Air Canada recently signed a Memorandum of Understanding to begin selling tickets on each other's flights from the third quarter of this year. Etihad has more than 40 such codeshare agreements in place around the world, but its latest partnership – which follows a thawing of relations between the United Arab Emirates (UAE) and Canada – could be a milestone in the long-running battle between the Gulf carriers and their legacy counterparts, particularly those in the Star Alliance grouping of airlines.

Under the terms of the agreement, Etihad will place its code on Air Canada-operated flights between Toronto and unspecified destinations in North America. In return, Air Canada will put its code on Etihad's bilaterally constrained Abu Dhabi-Toronto trunk route, as well as its Abu Dhabi-London Heathrow service...

Life after Malev

Full article on economist.com

The collapse of Malev, Hungary's flag carrier, in February 2012 could have triggered a crisis at Budapest Ferenc Liszt International airport (pictured). The capital's main gateway lost 40% of its revenue and, without Malev's feeder network to bring them passengers, its two extant long-haul operators—American Airlines and Hainan Airlines—withdrew their respective services to New York and Beijing. As its connections disintegrated, Budapest started to look like a bellwether for the decline of European aviation. Yet it seems Hungary may actually have done well to lose Malev and set off down a new, less vainglorious, path...