Monday, 1 February 2016

Interview: Abdul Mohsen Junaid, Saudia CEO

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When the Kingdom of Saudi Arabia began the privatisation of its flag-carrier in 2006, everyone understood that the mainline airline would be the last of the group's six business units to be sold off.

One decade on, the passenger division remains firmly under the wing of its well-endowed government owner. That is no surprise given the company's ongoing financial troubles: chief executive Abdul Mohsen Junaid freely admits that Saudia is "nowhere close to break-even on domestic routes" – a segment that accounts for two-thirds of its seating capacity.

But while Saudia-the-airline is not yet ready to leave the nest, Saudia-the-group has made impressive strides towards privatisation...

Interview: Abdullah Al Sharhan, Kuwait Airways CEO

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In 2014, the average age of an aircraft in Kuwait Airways' fleet was a whopping 20 years.

Today that figure has nearly halved thanks to the induction of a dozen new Airbus jets. Next year it will plummet close to zero as the last ageing units are replaced, completing the flag-carrier's re-birth after decades of political indecision and commercial stagnation.

"By mid-2017 we will go to a completely new fleet, and we will be youngest in the region," beamed new chief executive Abdullah Al Sharhan. "That is after being almost the oldest...

Interview: Sherif Fathy, EgyptAir Chairman

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Egypt's all-important tourism sector has been dealt successive blows since the 2011 Arab Spring uprisings, with repeated waves of political unrest warding off foreign visitors.

The country's tourism revenue is expected to have fallen below $7 billion in 2015 – a far cry from the $12.5 billion raked in the year before the revolution.

Flag-carrier EgyptAir has been front and centre of the downturn, sinking about $1.5 billion into the red since 2011 as holidaymakers turned to perceived safe-havens elsewhere in the region. The airline's fortunes had seemed to be rising in 2014/15, but were derailed again in October when a charter flight operated by Russia's Metrojet crashed in the Sinai Peninsula...

Interview: Samer Majali, SaudiGulf Airlines President

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Anyone who has been following the liberalisation of Saudi Arabia's aviation sector will be aware of one thing above all else: it moves at a glacial pace.

The kingdom's civil aviation authority, GACA, awarded economic licences to two start-up carriers back in December 2012, promising to inject much-needed competition in the local market. Al Qahtani Group-owned SaudiGulf Airlines and Qatar Airways-owned Al Maha Airways were selected from a shortlist of seven bidders.

There followed a woefully predictable succession of missed deadlines, with 2015 marking the third year in a row that both SaudiGulf and Al Maha have failed to get off the ground...

Thursday, 21 January 2016

Why you can safely ignore airline safety rankings

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Travel websites were abuzz this month with the latest safety ranking from Airline Ratings, an industry data provider. Australian flag-carrier Qantas was crowned the safest airline in the world for the third year in a row, while other big names like American Airlines, Cathay Pacific and Emirates also made it into the top ten. At the bottom of the list were some rather more obscure carriers like Batik Air and Kalstar Aviation.

Airline Ratings came up with its ranking by looking at a range of factors perceived to reflect safety performance – prior accident history, current fleet type, recognized industry certifications and so forth. At least two other websites also claim to rank airlines by safety: the Air Transport Rating Agency; and the Jet Airliner Crash Data Evaluation Center.

Each of these reports, though, comes up with wildly different rankings. And that is not surprising, given that their authors are engaged in PR exercises bereft of any statistical validity...

Friday, 15 January 2016

Interview: Mbuvi Ngunze, Kenya Airways CEO

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After several months in the doghouse, management at Kenya Airways (KQ) have bounced back from their worst ever financial performance by announcing an urgent restructuring plan. The ailing flag-carrier now aims to restore profitability under an 18-month turnaround strategy developed by consultants McKinsey & Company.

Many analysts are reserving judgement on the plan until further details are disclosed, but chief executive Mbuvi Ngunze promises that a slew of measures will help reverse last year's devastating 25.7 billion shilling ($254 million) loss.

Ostensibly turning his back on Project Mawingu, the ten-year growth strategy launched in 2011, Ngunze is pursuing an urgent overhaul of KQ's finances in a bid to raise up to $346 million. Some $200 million of that will be generated from unspecified cost-cutting measures – job losses are widely expected – with the remainder coming from the sale of four Boeing 777-200ERs and other assets...

Thursday, 14 January 2016

Arab-Jewish tensions spill over on Aegean flight

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It started with a flickering of paranoia in the mind of one Jewish passenger; perhaps justifiable, given the recent surge of terrorist attacks in Israel; perhaps prejudicial, emblematic of the deep distrust between Arabs and Jews, who both see a homeland in the Holy Land. It ended with two entirely innocent customers being hauled off a commercial flight, and with senior Palestinian officials accusing their Greek counterparts of reviving "the worst years of the South African apartheid". The debacle unfolded on a routine Aegean Airlines flight from Athens to Tel Aviv...

Wednesday, 13 January 2016

Etihad's backdoor access to Europe slammed shut

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It is a strategy that has won James Hogan, the chief executive of Etihad Airways, plaudits from the across the airline industry.

Shackled by restrictive traffic-rights agreements, Abu Dhabi’s Etihad has in recent years gone on a shopping spree across Europe. Equity stakes in Alitalia (49%), Air Serbia (49%), Switzerland’s Darwin Airline (33%) and Germany’s Air Berlin (29%) have allowed the Gulf carrier to pursue backdoor expansion across the continent, swapping traffic with local partners and restructuring their networks to feed Abu Dhabi.

The investment model has narrowed the gap between Etihad and its two older, larger Gulf rivals – Dubai’s Emirates Airline and Qatar Airways – contributing an estimated $1.1 billion to the newcomer’s top line in 2014...

Friday, 1 January 2016

Winds of change at Saudia

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Discussions about Gulf aviation invariably focus on the so-called 'big three' carriers in the region: Dubai's Emirates Airline, Abu Dhabi's Etihad Airways, and Qatar Airways. Saudia, the flag-carrier of the Kingdom of Saudi Arabia, rarely gets a mention – despite deploying more aircraft than Etihad, and boasting a history that stretches back decades before the launch of the new breed of Gulf super-connectors.

Saudia's absence from the global limelight is partly down to its focus on domestic flying, with two-thirds of the airline's seating capacity deployed inside the kingdom. It is also a reflection of the conservative values of its government owner. The big three Gulf carriers, by contrast, have designed their businesses around intercontinental transfer traffic, forcing them to invest heavily in global marketing campaigns and high-profile sponsorship deals. Saudia neither wants nor needs to make as much noise...

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...