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SUPPORTING THE AFRICAN AVIATION INDUSTRY FOR 27 YEARS ®
AFRICAN AVIATION
AFRICA’S AVIATION INDUSTRY JOURNAL
AfDB to expand air financing
NOVEMBER / DECEMBER, 2017
New aircraft fleet strategy Safwat Musallam, Chairman and CEO, EgyptAir Holding Company.
Tunisair Technics hosts airlines AFRICAN AVIATION’s
Returns to Cairo 18th – 20th March, 2018 SAA CEO’s top priorities
Hosted by:
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AFRICAN AVIATION SERVICES LIMITED
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DATE: SUNDAY, 18TH TO TUESDAY, 20TH MARCH, 2018 VENUE: INTERCONTINENTAL CITYSTARS HOTEL, CAIRO, EGYPT
CONFERENCE THEME
ADDRESSING AVIATION TRAINING PRIORITIES IN AFRICA E ARE delighted to announce that the 6th Annual African Aviation Training Conference & Exhibition will be co-located with AFRICAN AVIATION’s 27th Annual MRO Africa Conference & Exhibition, hosted by EGYPTAIR, which will take place from Sunday, 18th to Tuesday, 20th March, 2018, at the Intercontinental CityStars Hotel, Cairo, Egypt. This follows the successful co-location of these two events in Johannesburg, South Africa, in March, 2017, hosted by South African Airways. The 6th Annual African Aviation Training Conference & Exhibition will address critical training and capacity-building priorities facing the African aviation industry across multiple areas, including: Pilot Training; Cabin Crew Training; Maintenance .Training; Training for Aviation Management and Regulatory Authorities; Safety Training Strategies; Training for Airports and Air Traffic Controllers; Standardisation of Course Curricula, Harmonisation of Instructor Training; the Development of Centres of Excellence and International Co-operation. The role of ICAO’s Global Aviation Training (GAT) initiative in capacity building in Africa will be examined, as well as IATA’s Training Strategy on the continent. The Conference will also provide a unique opportunity for African and international aviation training organisations and suppliers to network, develop strategic partnerships, and showcase their courses, products and services. Once again, a highlight of the event will be to spotlight the valuable work and achievements of the Association of African Aviation Training Organisations (AATO). A co-operation agreement was signed between AFRICAN AVIATION and AATO in March, 2017, in South Africa, to support and promote the Association within and outside Africa.
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FOR MORE INFORMATION PLEASE CONTACT: AFRICAN AVIATION Email: conferences@africanaviation.com
Website: www.africanaviation.com
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DATE: SUNDAY, 18TH TO TUESDAY, 20TH MARCH, 2018 VENUE: INTERCONTINENTAL CITYSTARS HOTEL, CAIRO, EGYPT HOSTED BY
IRCRAFT MAINTENANCE, Repair & Overhaul (MRO) representatives from around the world will converge in Cairo, Egypt, in March, 2018, for AFRICAN AVIATION’s 27th Annual MRO Africa Conference & Exhibition which is being hosted by EgyptAir and EgyptAir Maintenance & Engineering. This growing annual event provides a valuable opportunity for African airlines and other aircraft operators, MROs, Original Equipment Manufacturers (OEMs), Government Regulators, and aviation suppliers and service providers to network and establish beneficial business relationships. To Register for MRO Africa 2018, please contact AFRICAN AVIATION at the email address below
A
INTRODUCING:
A SPECIAL SESSION ON HELICOPTER MRO
OR THE first time, MRO Africa 2018 will include a Special Session on Aircraft Interiors, an increasingly important business segment for MROs in Africa. For example, Ethiopian MRO, a business unit of Ethiopian Airlines, recently refurbished one of its Boeing 767-300ER aircraft, with others to follow. The aircraft was fitted with brand-new full flat-bed seats in Cloud Nine business class (pictured right), a modern inflight entertainment (IFE) system, and in-seat power outlets.
F
2017 SPONSORS & SUPPORTERS INCLUDED:
FOR MORE INFORMATION PLEASE CONTACT: AFRICAN AVIATION Email: conferences@africanaviation.com
Website: www.africanaviation.com
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& -400
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SUPPORTING THE AFRICAN AVIATION INDUSTRY FOR 27 YEARS
AFRICAN AVIATION AFRICA’S
AVIATION
INDUSTRY
®
AFRICAN AVIATION
JOURNAL
AFRICA’S AVIATION INDUSTRY JOURNAL
NOVEMBER / DECEMBER, 2017
www.africanaviation.com CONTENTS
New aircraft fleet strategy
AfDB to expand air financing
COMMENT The Yamoussoukro Decision 1988-2018: A 30-year milestone . . . . . . . . . . . . . . . . . . . . . .9
Safwat Musallam, Chairman and CEO, EgyptAir Holding Company.
Tunisair Technics hosts airlines AFRICAN AVIATION’s
AIRLINES
Returns to Cairo 18th – 20th March, 2018
EgyptAir’s new aircraft fleet strategy . . . . . . . . . . . . . . . . . . .10 Air Sénégal orders two Airbus A330neo aircraft . . . . . . . . . .12 New lease of life for Kenya Airways . . . . . . . . . . . . . . . . . . . .14 SAA CEO Jarana addresses priorities . . . . . . . . . . . . . . . . . .16 NAC leases Q400s to Jambojet . . . . . . . . . . . . . . . . . . . . . . .16 Air Mauritius addresses key challenges . . . . . . . . . . . . . . . . .18 Cemair expands Q400 fleet . . . . . . . . . . . . . . . . . . . . . . . . . .19 Binter CV focuses on connectivity . . . . . . . . . . . . . . . . . . . . .20
Hosted by:
SAA CEO’s top priorities
AIR FINANCE AFIC to play growing role in financing Boeing aircraft . . . . . .22 AfDB to expand aviation financing . . . . . . . . . . . . . . . . . . . . .24
MRO Tunisair Technics hosts African airlines . . . . . . . . . . . . . . . . .26 Countdown to MRO Africa 2018 in Cairo . . . . . . . . . . . . . . .28
EgyptAir’s new aircraft fleet strategy – page 10
MANUFACTURERS (OEMS) Airbus partners with Bombardier . . . . . . . . . . . . . . . . . . . . . .30 Boeing in talks with Embraer . . . . . . . . . . . . . . . . . . . . . . . . .30 EASA’s order on Rolls-Royce engines . . . . . . . . . . . . . . . . . .30
TRAINING EgyptAir Training Academy hosts female pilots . . . . . . . . . . .32 Global requirements for airline pilots . . . . . . . . . . . . . . . . . . .32
FORUM Strong profitability for airlines in 2018 – except in Africa . . . .34
AfDB to expand aviation financing – page 24
BUSINESS AVIATION AfBAA becomes member of IBAC . . . . . . . . . . . . . . . . . . . . .36 Business aircraft global accident data . . . . . . . . . . . . . . . . . .36
DRUMBEAT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
AIRPORTS NCAA certifies two airports in Nigeria . . . . . . . . . . . . . . . . . .38 Role of airports in development . . . . . . . . . . . . . . . . . . . . . . .38 O. R. Tambo International Airport climbs rankings . . . . . . . .40
AFRICAN AVIATION DATA
. . . . . . . . . . . . . . . .42
Tunisair Technics hosts African airlines – page 26
CHIEF EXECUTIVE OFFICER & EDITOR-IN-CHIEF NICK FADUGBA.
BUSINESS DIRECTOR JEFF LING.
AFRICAN AVIATION, Africa’s Aviation Industry Journal, was established in 1990. It is published bimonthly by African Aviation Publications, part of African Aviation Services Limited, 2 Kings Court, Newcomen Way, Severalls Business Park, Colchester, Essex CO4 9RA, UK. ENQUIRIES:
EDITORIAL: editorial@africanaviation.com
ADVERTISING: advertising@africanaviation.com
EVENTS: conferences@africanaviation.com
Complimentary on-line subscriptions are provided to signed-up African aviation officials and at the reduced annual subscription rate of UK£95 by post. Annual subscription rate within the UK: UK£145. Outside the UK: US$265. NB: Only paid-up subscribers are guaranteed regular copies of AFRICAN AVIATION. © COPYRIGHT African Aviation Services Limited 2017. All rights reserved.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
7
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SUPPORTING THE AFRICAN AVIATION INDUSTRY FOR 27 YEARS ®
AFRICAN AVIATION
®
The Yamoussoukro Decision 1988-2018: A 30-year milestone HE ADVENT of the year 2018 will mark an important milestone in the history of the African aviation industry – namely, the 30th Anniversary of the Yamoussoukro Decision, originally called the Yamoussoukro Declaration. In 1988, when African Ministers of Transport gathered in Yamoussoukro, the birthplace of former President Félix Houphouët Boigny of Côte d’Ivoire, they wisely, solemnly and optimistically declared the commitment of their countries to supporting the introduction of an air transport liberalisation policy which would vastly improve air transport connectivity in Africa, as well as unleash across the continent the powerful economic multiplier effect of aviation.
T
Thirty years later, for a variety of reasons, some genuine, the vision of these founding fathers has still to be fully implemented. But all hope is not lost, yet. As the African Civil Aviation Commission (AFCAC) rightly points out, “The Yamoussoukro Decision remains the single most important air transport reform policy initiative by African Governments to date.” In 1999, through the African Union (AU), the ‘Declaration’ became the ‘Decision’ and it entered into force, legally, in the year 2000. “In essence,” says AFCAC, “The YD is a multilateral agreement among the 44 African signatory states which allows the multilateral exchange of up to fifth freedom air traffic rights between party states using a simple notification procedure.” To its credit, the AU has adopted the Single African Air Transport Market (SAATM) as one of the 12 flagship projects of its ‘Agenda 2063.’ This is to “ensure aviation plays a major role in connecting Africa in order to achieve social, economic and political integration and boost intra-Africa trade.” SAATM was due to be launched in 2017 but was postponed to January, 2018, when 23 states are expected to do so during the 30th Ordinary Session of the AU Assembly, taking place in Addis Ababa, Ethiopia. Having given their ‘Solemn Commitment’ to establish SAATM it would be a significant achievement for Africa if these states were to actually launch and implement the policy as solemnly agreed. According to the AU, these countries have a combined population of over 670 million - more than half the population of Africa in 2015, and a combined Gross Domestic Product (GDP) exceeding US$1,500 billion (in 2015). They also accounted for over 50% of international visitors to Africa that year. In addition, the airlines in these countries carry more than 80% of intra-Africa traffic and over 50% of all passengers in Africa pass through their airports. Clearly, the economic and social benefits of SAATM – when implemented - will be significant.
Nick Fadugba FRAeS President & CEO AFRICAN AVIATION Email: nickfadugba@africanaviation.com Follow us on:
@AfricanAviation
Websites: www.africanaviation.com
@MROAfrica
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
African Aviation
www.mroafrica.com
MRO Africa
Nick Fadugba
9
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A Bombardier CS300 in EgyptAir livery and, far right, Safwat Musallam, head of EgyptAir, with Fred Cromer, President, Bombardier Commercial Aircraft.
EgyptAir’s new aircraft fleet strategy
E
Safwat Musallam, Chairman and CEO, EgyptAir Holding Company.
10
GYPTAIR has embarked upon a major aircraft fleet modernisation programme aimed at further strengthening Cairo as a leading international gateway and returning the carrier to profitability. The plan entails leveraging the airline’s strategic geographic location, straddling Africa and the Middle East, with right-sized aircraft that enable it to build a more powerful hub-and-spoke operation and boost intercontinental air transport connectivity through Cairo. If successful, the ambitious strategy could see international transfer passengers opting for Cairo rather than Addis Ababa, Casablanca, Dubai, Istanbul and Nairobi as their transit airport of choice. Furthermore, in a bold and perceptive move, EgyptAir has become the first airline in Africa to place a firm order for up to 24 new Bombardier CS300 aircraft, which will replace the Embraer 170s operated by EgyptAir Express. Until recently, the C-Series programme was struggling for orders, but now it is in increasing demand among the world’s airlines, as witnessed by US carrier Delta Air Lines order for up to 125 aircraft and EgyptAir’s order, among others. Reasons for this include more competitive pricing of the aircraft by Bombardier, better marketing, and the CS300’s range and capacity advantages. Also, the new joint venture between Airbus and Bombardier (see page 30) provides significant comfort to C-Series operators of enhanced product support, a vital requirement. The fleet renewal programme is an integral part of EgyptAir’s recovery and growth strategy being spearheaded by Safwat Musallam, Chairman and CEO of EgyptAir Holding Company, and fully backed by the airline’s Board of Directors and by Egypt’s Minister of Civil Aviation,
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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Sherief Fathi Ali Atiya. Minister of Civil Aviation, Egypt. Sherief Fathi Ali Atiya. The political upheaval in Egypt took its toll on the national flag-carrier in terms of tourist and business traffic, and even aircraft maintenance, repair and overhaul (MRO) business from some international airline clients. Today, EgyptAir Holding Company and its nine subsidiaries, including EgyptAir Maintenance and Engineering, are re-energised and poised for growth. EgyptAir Holding Company and Bombardier Commercial Aircraft executed a firm agreement in December for the sale and purchase of 12 CS300 aircraft, powered by Pratt & Whitney PurePower Geared Turbofan (GTF) engines, along with purchase rights for an additional 12 CS300s. This followed the Letter of Intent announced a month earlier during the 2017 Dubai Air Show. They say this order will enable EgyptAir to “better serve” domestic and regional destinations, as well as several European and African destinations. The CS300 has a range of 3,300 nautical miles and seats 130 passengers in a two-class configuration, compared to the E170’s range of 2,150nm and 70 seats. “The CS300’s unique profitability profile will allow us to open up new opportunities and fits perfectly into our growth strategy,” says Safwat Musallam. “Our passengers will experience modern and best-in-class comfort and we look forward to integrate this innovative and efficient aircraft into our fleet.” At list prices the 24 CS300’s cost US$2.2 billion, although the airline is believed to have obtained much more attractive terms. Financing details have not yet been disclosed. Meanwhile, EgyptAir has reached agreement with AerCap, the international aircraft lessor, for the long-term operating lease of 15 new Airbus A320neos powered by CFM International LEAP-1A engines. Deliveries will commence in 2020. The A320neos will replace A320-200s and (Continued on page 12)
Smiles all around, as the Bombardier and EgyptAir team mark a milestone deal.
CAIRO INTERNATIONAL AIRPORT (CAI) AS A HUB AND GATEWAY TO AFRICAN AND MIDDLE EASTERN DESTINATIONS (A Comparative Analysis)
DESTINATION COVERAGE FROM SELECTED HUBS HUBS 2017 2007
Destination Counts Destinations coverage (1) Destination counts
CAI
ADD
NBO
JNB
54
78
58
71
CMN 55
29%
42%
32%
39%
30%
43
47
52
73
43
27%
29%
32%
45%
27%
Destinations added (2)
19
10
7
10
10
Destinations dropped (2)
11
3
5
8
3
Destinations coverage (1)
(1): Destination Coverage (in %): percentage of total destinations in Africa and the Middle East served from each of the five selected airports. (2): Number of destinations added or dropped between the 2007–2017 period.
DESTINATIONS BY REGION HUB
Africa
Middle East
Total
2017
CAI ADD NBO JNB CMN
24 66 50 65 46
30 12 8 6 9
54 78 58 71 55
2007
CAI ADD NBO JNB CMN
20 39 46 68 33
23 8 6 5 10
43 47 52 73 43
DESTINATIONS DATA
2017 2007
CAI
ADD
NBO
JNB
CMN
Africa
24/112/352
66/146/659
50/87/842
65/125/1756
46/152/372
Middle East
30/201/876
12/212/128
8/212/88
6/339/63
9/282/76
Africa
20/124/311
39/119/275
46/99/523
68/112/1737
33/127/351
23/230/428
8/178/58
6/211/42
5/310/34
100/224/48
Middle East
(Number of destinations / Average Capacity / Frequency) Notes: Periods of reference: Week 35 in 2017 and Week 35 in 2007. Other airports of comparison: ADD, NBO, JNB, CMN. From hub to destinations in Africa and the Middle East only. ADD: Addis Ababa, Ethiopia; NBO: Nairobi, Kenya; JNB: Johannesburg, South Africa; CMN: Casablanca, Morocco.
Source: Milanamos.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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From left to right: Philippe Bohn, CEO, Air Sénégal, Maimouna Ndoye Seck, Minister of Air Transport and Development of Airport Infrastructure, Senegal, and Fouad Attar, Head of Airbus Commercial Aircraft, Africa and Middle East.
Air Sénégal orders two Airbus A330neo aircraft
A
IR SENEGAL, the national carrier of Senegal, has signed a Memorandum of Understanding (MoU) for two A330neo aircraft, the new re-engined version of the bestselling A330 wide-body airliner. The agreement makes Air Sénégal the first airline in Africa to select the A330neo. The agreement was announced during a signing ceremony at the Dubai Airshow in the presence of Maimouna Ndoye Seck, Minister of Air Transport and Development of Airport Infrastructure, Senegal. Air Sénégal will launch operations in 2018. The airline plans to use the A330neo to develop its medium and long-haul network with the aircraft offering cutting-edge technology along
with efficient operations. Philippe Bohn, CEO, Air Sénégal, says: “Aviation is a catalyst for economic development and this purchase demonstrates Senegal’s ambition to accelerate its economic growth. The A330neo has proven itself to be the right aircraft, combining low operating costs, long-range flying capability and high levels of comfort. We are looking forward to launching operations and to offering our customers best-in-class service.” ‘’We are very pleased to welcome Air Sénégal as an A330neo customer. The A330 is the ideal choice for Air Sénégal to build its network and become West Africa’s fastest-growing airline,’’ remarks John Leahy, Chief
Operating Officer Customers, Airbus Commercial Aircraft. The aircraft will be powered by the latest-generation Rolls-Royce Trent 7000 engines. “We look forward to supporting the smooth entry into service of these new aircraft. Air Sénégal has taken a significant step forward as the first airline in Africa to directly order the A330neo,” says Kevin Evans, Rolls-Royce Vice President for Civil Aerospace, Africa and the Middle East. Launched in July, 2014, the A330neo builds on the A330’s proven economics, versatility and reliability while reducing fuel consumption by 25% per seat, and features a new larger span wing with Sharklet wingtip devices. ●
EGYPTAIR (Continued from page 11) A321-200s which are being retired from the airline’s fleet. Operating leases will provide EgyptAir with greater fleet flexibility and will eliminate the need for the large, upfront capital outlay entailed in outright purchases. Significantly, AerCap will also provide six new Boeing 787-9 aircraft to EgyptAir on operating leases. The six 787s and 15 A320neos AerCap will lease to EgyptAir represent a huge financial commitment by the lessor to the airline and to Africa. The 787-9s are for both aircraft replacement and network expansion purposes. They will replace the airline’s 777-200s and offer long-range capability as well as optimum seat capacity, again, rightsizing. “We’re confidant the addition of these 787-9s will enhance EgyptAir’s fleet for many years,” says AerCap CEO Aengus Kelly. “Isshane Mounir, Senior Vice President of Global Sales and Marketing, Boeing Commercial Airplanes, adds: “EgyptAir will benefit 12
Fred Cromer (left), of Bombardier, and Safwat Musallam of EgyptAir sign the deal. from the 787’s market-leading efficiency, reliability and comfort.” The 787-9s will be powered by RollsRoyce Trent 1000 engines (the Trent 1000 TEN variant). EgyptAir has previously selected the Trent 700 engine and TotalCare maintenance support programme for its fleet of Airbus A330 aircraft. It will also be recalled that in 2016 EgyptAir ordered nine new Boeing 737-800s for its short-
to-medium haul destinations, with eight of the aircraft being financed by Dubai Aerospace Enterprise (DAE). Given this major programme of fleet renewal and aircraft retirements, CIAF Leasing, EgyptAir’s Cairo-based aircraft leasing affiliate company, headed by Chairman and CEO, Dr Hassan Mohamed Hassan, is likely to be very busy organising the sale or wet-leasing of the retired aircraft. ●
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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Kenya Airways’ long-haul strategy is now based on Boeing 787s, rather than bigger 777s. Top right, CEO Sebastian Mikosz.
New lease of life for Kenya Airways
K
ENYA AIRWAYS’ Polish Chief Executive Officer, Sebastian Mikosz, ran into a storm of local protest soon after his appointment in June when he hired a team of five Polish aviation consultants to assist
him in turning around the heavily indebted airline. The consultants, former staff of LOT Airlines, worked closely with Mikosz when he was CEO of the Polish national carrier. He had duly secured the prior approval of the
board of Kenya Airways to hire the consultants and his action, to all intents and purposes, seemed to be in perfectly good faith; and yet it backfired on him. Some Kenyans raised the issues of corporate
KENYA AIRWAYS – COMPETITION OVERVIEW 100% government owned Fleet size: 329 Destinations: 302 (44 in Africa)
100% government owned Fleet size: 94 Destinations: 121 (77 in Africa)
100% government owned Fleet size: 126 Destinations: 86 (2 in Africa)
100% government owned Fleet size: 50 Destinations: 73 (32 in Africa)
Public Listed Company Fleet size: 38 Destinations: 53 (40 in Africa)
100% government owned Fleet size: 200+ Destinations: 140 (20 in Africa)
100% government owned Fleet size: 55 Destinations: 50 (41 in Africa)
100% government owned Fleet size: 203 Destinations: 150+ (23 in Africa)
100% government owned Fleet size: 12 Destinations: 21 (17 in Africa)
KENYA AIRWAYS – OPERATING STATISTICS (HALF-YEAR 2017) 2017
2016
Var
Var %
RASK (US cent)
5.89
6.01
(0.12)
(2.0)
CASK (US cent)
6.40
6.66
0.26
3.9
ASK's (million)
7,132
7,237
(105)
(1.4)
RPK's (million)
5,486
5,175
311
6.0
Cabin Factor %
76.9%
71.5%
Passengers ('000s)
2,306
2,232
74
3.3
7.66
8.41
(0.75)
(8.9)
Exchange Rate (KSh/US$)
103.06
101.16
1.90
1.9
Cargo Tonnes
29,255
28,231
1,024
3.6
1.21
1.31
(0.10)
(7.6)
Yield per RPK incl YR (USc)
Cargo Yield per KG (US$)
5.4
Source: Kenya Airways. RASK: Revenue per Available Seat Kilometre; CASK: Cost per Available Seat Kilometre; YR: Yield Revenue. 14
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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AIRLINES governance and transparency. Four senior executives of Kenya Airways resigned. Ironically, immediately he assumed office, Mikosz said one of his top priorities would be to dispel the “culture of mistrust” he found at the airline. ”People do not trust one another and we have to change this.” Following his first interactions with Kenya Airways’ staff he also repudiated the notion of an “African” way of doing things. According to him, “there is nothing like an African way of doing things; there is only a good way of doing things and a bad way.” In a sense, this episode highlights the
potential cultural sensitivities when expatriate management is brought in, which doesn’t necessarily mean that it is a bad thing. The five consultants were hired on three-month renewable contracts and it is uncertain whether they will be retained. Today, Kenya Airways is a completely different entity to when it was run by former CEO Titus Naikuni just a few years ago. The mantra of ambitious growth has been replaced by the mantra of survival. Naikuni’s strategy for Kenya Airways to serve virtually all capital cities in Africa, as well as some key international destinations, including
KENYA AIRWAYS – POST RESTRUCTURING SHAREHOLDERS DISTRIBUTION Government of Kenya 48.9% KQ Lenders 38.1%
Government of Kenya
48.9%
KLM 7.8% Other Shareholders 5.2%
Other Shareholders
5.2% KQ Lenders
38.1% KLM
7.8%
KENYA AIRWAYS – OPERATING PERFORMANCE ON AN UPWARD GROWTH 4,000 2,000
(2,000)
2014
2015
2016
2017
(4,000) (6,000) (8,000) (10,000)
Operating profit/loss
(12,000)
Loss before tax
Source: Kenya Airways.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
Asia, which involved scaling up the aircraft fleet and other large costs, has now been consigned to history. The airline ran into a major liquidity problem when its reduced revenues, due to external factors, could not service its large debt obligations, mostly aircraft related. The new Kenya Airways is smaller and less ambitious, growth-wise, but it still has several things in its favour, including a very committed workforce, a supportive government, a good reputation for service, an ideallylocated hub, geographically, and the economic and tourism opportunities offered by its home country Kenya. ‘Operation Pride’, the airline’s turnaround strategy focused on three main priorities – returning to profitability through revenue enhancement and cost containment; refocusing and resizing the business and business model, and enhancing partnerships; as well as restructuring the capital of the company. The results, so far, include more competitive pricing, better rates from critical suppliers, and improved connectivity at the hub leading to an increase of 13% in intra-Africa traffic year-on-year.
Connectivity However, to achieve even more connectivity, it would seem appropriate for Kenya Airways to carefully study and learn from the skilful and successful manner in which its main rival and neighbour, Ethiopian Airlines, has leveraged its membership of a global airline alliance, Star Alliance, to build a powerful hub at Addis Ababa. Unlike Ethiopian, Kenya Airways has yet to maximise the advantages of its own membership of a global airline alliance, namely, SkyTeam. Michael Joseph, Chairman, Kenya Airways, says that the debt and equity restructuring has repositioned the airline for longer-term growth from a financial and operational perspective, reducing the company’s gross debt exposure of KES 242 billion Kenyan shillings (approximately US$2.35 billion) by about KES 50 billion (approximately US$486 million). Notably, as part of the restructuring, the shareholders agreement entered into between the Government of Kenya and KLM Royal Dutch Airlines in 1995 was terminated, although KLM remains an equity partner. KLM has committed further investment support of up to US$76.4 million, including, in kind, the lease of slots at London Heathrow Airport to Kenya Airways. ● 15
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AIRLINES
SAA, headed by new CEO Vuyani Jarana (above, left), is in urgent talks with its lenders.
SAA CEO Jarana addresses priorities UYANI JARANA, CEO, South African Airways, has spent his early days at the helm of the national carrier in urgent talks with domestic and international lenders aimed at re-negotiating large debt obligations, and with Government officials deliberating the best way to restructure SAA’s balance sheet. SAA’s long-running financial crunch and its difficulty in servicing its loans on-time have stretched the patience
V
of some banks. For example, Citigroup and Standard Chartered recently declined to extend the terms of their loans which resulted in Government intervention, via the Treasury. On the other hand, banks such as Nedbank, Investec, First Rand, Barclays and Standard Bank, have gone the extra mile and provided SAA with more breathing space by extending their loans. Ultimately, all parties agree that
SAA needs to cut its costs, increase its revenues and look for sufficient new equity in order to sustain it for the immediate future. In a sense, the Government’s posture could be seen to be both helpful and hindering; helpful through its steadfast financial support for SAA, and hindering through its resolute opposition, so far, to sell equity in the airline to external investors. With the recent appointment of airline turnaround expert, Peter Davies, as an Advisor to SAA, a solution may be found to the current impasse.
Route network
NAC leases Q400s to Jambojet
J
AMBOJET, the low-cost airline subsidiary of Kenya Airways, is acquiring two new Q400s on operating leases from Nordic Aviation Capital (NAC) which is purchasing the turboprop aircraft from Bombardier, Canada. Jambojet was established in 2014 and operates domestic routes from Nairobi to Mombasa, Eldoret, Kisimu, Lamu, Malindi and Ukunda (Diani). It carried over one million passengers in less than two years of operation. “We are looking at retiring our narrow-body fleet and transitioning to an all-Q400 fleet by 16
the end of 2017,” says CEO Willem Hondius. “We warmly welcome Jambojet as a new client and the opportunity to increase our global footprint on the African continent,” says NAC Chairman, Martin Møller. Jean-Paul Boutibou, Vice President, Sales, Bombardier Commercial Aircraft, adds: “We are proud that the Q400 is the leading turboprop in Africa. The aircraft is exceptionally versatile and can be adapted to a variety of business models, which makes it ideally suited for operators such as Jambojet.” ●
Meanwhile, in a strategy aimed at strengthening their position in South Africa’s bustling, but fiercely competitive domestic market, SAA and its low-cost subsidiary, Mango Airlines, are rationalising their route network to improve efficiencies and optimise aircraft utilisation. This will see Mango operating additional domestic flights. Both SAA and Mango currently offer 200 return flights per week between Johannesburg and Durban and 278 return flights per week between Johannesburg and Cape Town. “We are satisfied that the changes we introduce will be of mutual benefit to our customers and to the SAA Group. A commercially-strong SAA Group offers customers improved efficiencies and schedule integrity,” says Jarana. Nik Vlok, Mango’s Acting CEO, adds: “These changes are a Group effort and demonstrate our commitment to strengthen the Group commercially.” Mango flights will be operated with Boeing 737-800s, while SAA will discontinue operating Airbus A340-600s on the Johannesburg-Cape Town route. ●
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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AIRLINES
Air Mauritius became the first Airbus A350 operator based in the Indian Ocean with the delivery of a leased AerCap aircraft.
Air Mauritius addresses key challenges GUY ZUNINO analyses the challenges facing Air Mauritius
T
HE RECENT delivery to Air Mauritius of its first Airbus A350-900 was neatly timed to coincide with the airline’s 50th Anniversary. The A350 is the first of six to be delivered to Air Mauritius. Four will be purchased directly from Airbus and two leased from Aercap, the international aircraft lessor. The six A350-900s and two A330-900neos already ordered will gradually replace the current long-haul fleet composed of six A340-300s and two A330-200s. Air Mauritius also operates two A319100s and three ATR72-500s on its regional network.
2016/17, compared with losses of €24 million in fiscal 2014/15. The number of passengers carried grew to a new record of 1.6 million, up 7% from 1.5 in the previous year; while the passenger load factor increased to 79.6% in 2016/17. In addition, the airline now carries more than 32,000 tonnes of frieght annually. The positive outcome is that during the past two years the airline succeeded in building its reserves and restoring shareholder value, thus enhancing its future prospects and competitiveness.
Competition The commencement of this aircraft modernisation programme opens a new chapter for the airline which, like others, has faced numerous challenges in recent years, including instability in the global economy, foreign competition, financial losses and unscheduled management changes. Due to the financial losses, Air Mauritius, after 2012, introduced a major restructuring programme which included a review of its business model and a reconfiguration of its route network. Increased competition from foreign carriers has constituted a major challenge. Unlike before when it was virtually protected by the government, Air Mauritius now faces strong competition following the opening of the Mauritian skies to numerous airlines, including Emirates which operates two daily flights with very large A380 aircraft. The ultimate aims of the restructuring programme were to achieve realistic cost savings and to boost revenues. In June, the airline group announced profits of €26.9 million (Euros) for the financial year 18
Somaskaran Appavou, CEO, Air Mauritius. Air Mauritius flies to 23 destinations in Europe, Africa, Asia, Australia and the southwest Indian Ocean region. It serves around 100 more destinations through some of the connecting hub airports on its network, namely Paris, Kuala Lumpur, Singapore, Mumbai, Johannesburg, Mumbai, Nairobi and Perth. Somaskaran Appavou was appointed as the airline’s new Chief Executive Officer in July this year, replacing Megh Pillay whose position was suddenly terminated in October, 2016. Appavou is the fifth CEO within 10
years, which says a lot. A graduate of the French National School of Civil Aviation in Toulouse, he was the Manager of Air Mauritius’s Planning Department between 1997 and 2001, before leaving to join Airbus in France where his functions involved aircraft marketing to airlines in Africa, the Middle East and Asia. According to Appavou: “The air transport industry remains strongly exposed to external events, such as the price of fuel, foreign exchange rate fluctuations, global economic crises and more and more complex statutory requirements. In spite of all this, our key objective is to assure the durability of Air Mauritius. Our business plan will be based on financial discipline and the ability to adapt quickly to changing market conditions. We will also explore new partnership opportunities in order to widen our services, connections and destinations.” Tactfully handling the recent industrial dispute by some pilots will be a test of Appavou’s management skills. During the A350-900 arrival ceremony, the Mauritian Prime Minister, Pravind Jugnauth, reiterated his support for the management and entire staff of Air Mauritius. The national airline is expected to play an important role in the government’s Vision 2030, which is intended to leverage the strategic position of Mauritius between Africa and Asia. The airline has already launched an ‘air corridor’ between the Indian Ocean island state and Singapore, a key global aviation hub, and increased connectivity with the rest of Africa is regarded as a major goal. “We operate a daily service to Johannesburg, South Africa, and would like to increase our flights to Nairobi, Kenya, to a daily service,” says Appavou. “But we must build a solid business case for any expansion.” ●
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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AIRLINES
Cemair expands Q400 fleet
C
EMAIR, SOUTH AFRICA, has concluded a firm purchase agreement with Bombardier, Canada, for two new Q400 turboprops valued at US$66 million based on the list price. It has also taken delivery of a used Q400 under an operating lease agreement. With these Q400s, CemAir will increase its fleet of Bombardier aircraft to 17, including five Q Series turboprops and 12 CRJ Series aircraft. It recently added a used CRJ900 to its fleet, the first in South Africa. “We are delighted that CemAir has selected the Q400 to expand its fleet,” says Jean-Paul Boutibou, Vice President, Sales, Middle East and Africa, at Bombardier Commercial Aircraft.
Significant growth “CemAir has enjoyed significant growth in the last few years and we are working to expand our scheduled operations beyond South Africa and to support new opportunities across Africa,” says Founder and CEO, Miles van der Molen. Low-profile CemAir was thrust into the limelight by its successful hosting of the Annual General Assembly of the Airlines Association of Southern Africa (AASA) in Eastern Cape, South Africa, in October this year. Pictured, left, at the signing ceremony, are (from left): Laura and Miles van der Molen of CemAir, and Fred Cromer and Sameer Adams of Bombardier Commercial Aircraft. ●
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p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 03/01/2018 21:21 Page 20
Binter CV is providing more inter-island connectivity, says Pablo Landrau Villalobos (right) of Binter Group.
Binter CV focuses on connectivity BERNIE BALDWIN reports on the progress of Cape Verde-based Binter CV.
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HERE ARE many examples where those with a specialist skill – developed in one discipline, area or location – realise that the skill can be transferred and put to good use in other areas. In 2016, Binter Canarias, the airline of the Canary Islands just off the coast of Morocco, decided it would make just such a move and bring its inter-island expertise to Cape Verde, the group of islands around 1,500 km (930 miles) southwest of the Canaries and directly west of Senegal. Having flown connecting services between the two island groups, Binter Canarias decided it was time to create a Cape Verde subsidiary to operate around the islands there. And so, Binter CV was launched in the final quarter of 2016, initially to develop an inter-island network, but with an eye on flights between Cape Verde and mainland North Africa. “We saw that the market was in need of having an alternative service to improve connectivity between the islands,” recalls Pablo Landrau Villalobos, International Market Development Manager, Binter Group. “The incumbents were having some problems in terms of punctuality, so we started thinking about this possibility. We have the know-how of connecting between islands because this is the business we have been doing in the Canary Islands for more than 35 years. That was the main reason why, when the opportunity appeared, we showed interest.” The other main Cape Verde operators are TACV Cabo Verde Airlines and Cabo Verde Express. The former dropped its inter-island services some time ago. In August, 2017, the management of the operation was signed over to Loftleidir Icelandic, a subsidiary of Icelandair Group, and TACV is now undergoing restructuring to develop a hub-and-spoke system from its base on the island of Sal. Cabo Verde Express, with which TACV has 20
a codeshare deal, flies inter-island services on a non-scheduled basis. Landrau explains that although Binter CV is part of the Binter Group, it is going to be managed as an independent operator. “It has a General Manager and a whole team of directors who will manage the day-today operations,” he confirms, adding: “We’ve had Binter CV for a year and help is still needed from HQ. We sent some of our executives, but have also been hiring local people and have to show them our know-how. So far, there are 116 staff members. “We assisted in launching the airline, but everything will be normalised and they are going to be totally independent as an operator that belongs to the group,” Landrau remarks. To begin its operations, Binter CV received three ATR 72-500s from its parent’s fleet (replaced at Binter Canarias with ATR 72-600s). These aircraft will be the fleet for the foreseeable future. “We want to consolidate every step that we make,” Landrau elaborates. “The plans are to grow in line with demand. We do not have a medium-term or long-term strategy regarding increasing the fleet, just the intention to grow if there is a need to do so. This could mean leasing in another aircraft at short notice, either on ACMI terms or as an operating lease. If we need to add another ATR permanently it will probably be a purchase as our ATR fleet is not leased.” With Binter CV now past its first anniversary of operations, Landrau reflects on the responses the carrier has received from both the customers and the competition. “We are having a very good response from the market. Every time that competition appears, it is well-received by the customers,” he observes, noting that the load factors are good on services between the Cabo Verde islands. “We are trying to replicate the model that we
have in the Canary Islands by taking care of the passenger, really trying to give a good service, being very strict with some of the points that are very important for us, including security and punctuality.” At present, Binter Group’s project to connect the Cabo Verde islands with international destinations is done by Binter Canarias, meaning passengers have to connect through the Canary Islands, but the development of direct, nonstop routes to the North African mainland is a goal for Binter CV. “We are always looking for opportunities and when the moment comes to connect Cabo Verde with mainland Africa, we will do that,” Landrau comments. “We are doing our analysis and I’m sure that we will eventually connect Cape Verde to Dakar, and maybe from there to Guinea-Bissau and other destinations. But we do not have a start date.” As for the competition, Landrau’s view is that the situation is not clear, especially with the recent major upheaval at TACV. Moreover, a look at Cabo Verde Express’s online presence via its website and Facebook page shows an emphasis on ground handling and cargo operations, although on the Cabo Verde government website, charter flights and air taxi services around the islands are still available using the carrier’s Let 410 aircraft. “Inter-island traffic is very particular,” Landrau notes, homing in on the need for reliability. “People need to go from one island to the other for basic reasons – visiting family, day-to-day work, or maybe for a weekend to spend time on another island. Some people say that the service is like a bus, an air bus. Binter Group, including Binter CV, operates around 180 flights per day. This shows the need to have many frequencies between the islands. The more options that the market has, the better for passengers,” Landrau concludes. ●
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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Almost everything about the A330neo is new new A350 generation engines new wings with A350 sharklets new A350 cabin Flying further with less fuel
The Airbus Widebody Family featuring the new Airspace cabin
p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 01/01/2018 14:35 Page 22
AIR FINANCE
Ethiopian Airlines could be a leading candidate in Africa for AFIC funding. Right: Well-known Robert Morin has joined AFIC.
AFIC to play growing role in financing Boeing aircraft
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HE RECENT closing of the first Aircraft Finance Insurance Consortium (AFIC)-backed financing arranged and underwritten by ING Capital and Apple Bank was note-worthy as it served as further evidence of the effectiveness of the new funding structure launched by insurance industry giant, Marsh, in June this year. The transaction, involving the financing of a new Boeing 747-8 freighter owned by Intrepid Aviation and leased to AirBridge Cargo Airlines, part of the Volga-Dnepr Group, represents the first non-payment insurance-backed financing ever closed by an operating lessor. Intrepid Aviation is a privately-held commercial aircraft lessor headquartered in the US with offices in Ireland and
Singapore. Notably, it has airline lessees in Africa, including Air Namibia. According to Marsh, AFIC – the nonpayment insurance product – was designed for banks and capital market investors that are funding new aircraft purchases from Boeing, the US manufacturer. The structure has already been used by a major international airline to support its financing of new Boeing 747 and 787 aircraft.
Boeing Capital Boeing Capital Corporation (BCC) collaborated with Marsh to facilitate the creation of AFIC and expects this new funding source to grow in 2018, potentially to levels similar to the tax
ANALYSIS OF FUNDING FOR BOEING DELIVERIES 5%
INSURANCE
MANUFACTURER
CASH
26%
CAPITAL MARKETS
29%
BANK DEBT
35%
EXPORT CREDIT
2002
2003
2004
2005
2006
2007
2008
2009
Source: Boeing Capital Corporation. 22
2010
2011
2012
2013
2014
5% 2015
2016
2017
2018F
equity and export credit markets. Available exclusively through Marsh, AFIC provides an alternative aircraft finance insurance product for new aircraft deliveries and is underwritten by four global insurance companies, Allianz, AXIS Capital, Sompo International (formerly Endurance) and Fidelis. AFIC uses insurance to protect the lender’s exposure to default for the duration of the loan – much in the same way as the guarantee from the US ExportImport Bank. The terms of this insurance can be tailored according to the individual purchase agreements made between Boeing, the airline and its financiers, says Marsh. Bruce Fine, Global Leader of AFIC for Marsh, says: “We believe that AFIC is a significant development in airline financing globally and will contribute to the growth and diversification of aircraft finance. AFIC offers Boeing customers a wider range of financing options to facilitate the purchase of newer, more efficient aircraft to enhance their fleets, and lenders will be able to conduct new business transactions with greater confidence.” Leading aircraft finance specialist Robert Morin, who is well-known in Africa, has joined AFIC as Transaction and Business Development Leader, and Gabriel Okolski has been appointed as Credit and Financial Analyst. Both are based in Washington, DC. Morin joined Marsh from the US Ex-Im Bank where he was a Senior Transportation Loan Officer responsible for more than US$3 billion in large commercial aircraft and helicopter financing for airlines, aircraft leasing companies and other corporate entities. ●
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 01/01/2018 14:36 Page 24
AfDB President, Akinwumi Adesina (top left). Pictured top right (from left) are Amani Abou-Zeid, Commissioner for Infrastructure and Energy, African Union; Dr Benard Aliu, President, ICAO Council; Vice President Yemi Osinbajo of Nigeria, Minister of State, Aviation, Nigeria, Hadi Sirika, and AfDB President, Akinwumi Adesina.
AfDB to expand aviation financing development banks can play their part, and the AfDB has been working on solutions that involve innovative finance packages and public-private partnerships as ways forward.” The AfDB’s enhanced commitment to the African aviation industry was demonstrated by the significant support it gave to the third International Civil Aviation Organisation (ICAO) World Aviation Forum hosted by the Government of Nigeria in Abuja in November this year and by the Memorandum of Understanding (MoU) it signed with the International Air Transport Association (IATA) on the sidelines of the ICAO event. Appropriately, the focus of the ICAO World Forum was ‘Financing the development of aviation infrastructure.’ The key-note address was delivered by Nigeria’s Vice President, Yemi Osinbajo, on behalf of the Head of State, President
H
ELPING TO solve the problem of finance is probably the most immediate action needed to boost the fortunes of the African aviation industry, says Akinwumi Adesina, President of the African Development Bank (AfDB). “By its very nature, the aviation industry is highly capital-intensive, especially when raising finance for the acquisition of aircraft. This is a bigger problem for African airlines. The banking system in much of SubSaharan Africa is not well-placed to deal with aviation financing needs. “Even when airlines in Africa do succeed in raising finance, they face higher charges across the board, from leasing charges to fuel and insurance. They also face the burden of high levels of taxes, fees and charges. Innovative financing schemes tailored to the aviation industry can help fill the financing gap. Multilateral
REGIONAL PERFORMANCE STILL DIFFERS – ESPECIALLY IN AFRICA EBIT margin by airline region of registration
16%
2016
14%
2017
2018
% revenues
12% 10% 8% 6% 4% 2% 0% NORTH AMERICA
ASIA PACIFIC
EUROPE
LATIN AMERICA
MIDDLE EAST
AFRICA
Source: IATA Economics using data from ICAO, The Airline Analyst, IATA forecasts. EBIT: Earnings before interest and tax. 24
Muhammadu Buhari. According to Adesina, the aviation industry is a powerful force for economic development and has been a key factor in the economic transformation of developing countries such as China and India, boosting trade and industry, and creating jobs and opportunities, not just within the aviation industry itself but across the economic spectrum. He notes, however, that the aviation industry in Africa is lagging behind other parts of the world, causing the continent to lose out on major benefits due to various obstacles, such as infrastructure deficits, difficulties in raising finance, high ticket prices, and high taxes, fees and charges. Under the MoU, the AfDB and IATA will work in partnership to further Africa’s economic and social development by helping to build a safe, secure and efficient aviation industry. So far, the bank has invested close to US$1 billion over the past decade in the construction and expansion of airport terminals, as well as aviation safety and aircraft financing. It has also provided grants for capacity building and co-ordination systems in 25 countries and 69 airports that will help increase the number of ICAO safety and security compliant airports from three to 20 by 2019. “The aviation sector is especially important as it opens up doors to investors,” says Adesina, “Very few invest where it’s difficult to travel to. That’s why ease of access via air travel is strongly correlated to economic growth. We must make regional aviation markets competitive and drive down costs, raise efficiencies and improve connectivity and convenience. Africa must implement the 1999 Yamoussoukro agreement on Open Skies and improve air connectivity across the continent.” ●
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 05/01/2018 07:51 Page 26
Imed Mhiri, Director General, Tunisair Technics, Tunisia.
Radhouane Ayara, Minister of Transport, Tunisia.
Tunisair Technics hosts African airlines Tunisia’s Minister of Transport, Radhouane Ayara, officially opened AFRICAN AVIATION’s Biannual African Airlines Technical Directors Meeting hosted by Tunisair Technics.
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From left: Salem Dernawi, of AJW Aviation; Ilyes Mnakbi, Chairman & CEO, Tunisair; Minister Ayara; Imed Mhiri, Tunisair Technics; and Nick Fadugba, CEO, AFRICAN AVIATION.
Tarek Elsaied Ghoneim, Maintenance Contracts & Marketing Director, EgyptAir Maintenance & Engineering, gives the vote of thanks to Minister Ayara.
Mohamed ElAwady of Air Cairo Airlines, Egypt, and Advocate Nontsasa Memela, of SAA Technical, South Africa. 26
UNISAIR TECHNICS, and its parent company, Tunisair, provided tremendous support to ensure the success of the recent Biannual African Airlines Technical Directors Meeting held in Tunis. The event is an important component of AFRICAN AVIATION’s MRO Africa initiative, launched 26 years ago. As with the annual MRO Africa Conference and Exhibition, the key objectives of the Biannual African Airlines Technical Directors Meeting include building relationships between African airlines and strengthening cooperation, especially in the technical field of aircraft maintenance, repair and overhaul (MRO). Tunisia’s Minister of Transport, Radhouane Ayara, warmly welcomed the airline participants from around Africa and emphasised the Government’s firm commitment to the continent and to the further development of the African aviation industry. Similarly, Imed Mhiri, Director General of Tunisair Technics, stressed the need for closer ties and increased technical co-operation between African airlines for mutual benefit. Nick Fadugba, CEO, AFRICAN AVIATION, praised the Government of Tunisia for its valued efforts to build bridges in Africa in key areas such as business, trade, aviation and tourism. He also applauded the plans by Tunisair to expand its route network and scheduled services within Africa. In particular, he paid tribute to the head of Tunisair Technics, Imed Mhiri, for his “vision, leadership and dedication” in fostering ties with African airlines. “This meeting in Tunis – with the presence of so many airlines from around Africa, many here for the first time, is testimony to Imed’s dedication, and we are all grateful to him and his hardworking team.” The African Airlines Technical
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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Benedict Adeyileka, Technical Director, Engineering, Air Peace Airlines, Nigeria. Directors Meeting takes place twice a year, first during the annual MRO Africa Conference held every March and then in October. South African Airways Technical hosted the previous event in Johannesburg, South Africa, which proved a tremendous success. The meeting in Tunis was in preparation for the 27th Annual MRO Africa Conference and Exhibition which will be hosted by EgyptAir and EgyptAir Maintenance and Engineering in Cairo in March, 2018. In addition to Tunisair, the Tunis meeting was supported by leading companies such as AJW Aviation, Aero Industrial Sales, Ramco, Sabena Technics and Airline Flight Academy (AFA). Important issues discussed during the two-day event included line maintenance, spares pools creation and access, supply chain management and how to achieve practical MRO cooperation among African airlines. Slim Essoussi, Sales and Customer Support Director, Tunisair Technics, delivered a comprehensive presentation on the company’s extensive capabilities; Nebil Mohammed of Ethiopian MRO gave a penetrating insight into his airline’s approach to line maintenance in Africa, and Benedict Adeyileka, Technical Director, Engineering, at Air Peace, Nigeria, delineated the MRO requirements and challenges for Nigerian airlines. The general consensus was that African airline MROs need to market themselves and their capabilities more effectively, ensure that co-operation “is a two-way street”, and, perhaps most importantly, that African airlines should trust each other more. Notably, it was agreed to set up two committees, one on Line-Maintenance Co-operation and Spares Pooling in Africa, and the other on Aviation Standards and Regulations Harmonisation in Africa. ●
Slim Essoussi, Sales & Customer Support Director, Tunisair Technics.
Nebil Mohammed, Director, MRO Sales & Marketing, Ethiopian Airlines.
Senior representatives of African airlines and select vendors take a group picture with Tunisia’s Minister of Transport, Radhouane Ayara.
Tunisia Technics organised a tour of its MRO and training centre in Tunis.
Mohammed Mahmoud (left), President of Aero Industrial Sales, and others.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
27
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EgyptAir Maintenance & Engineering’s headquarters in Cairo and one of its MRO hangers.
Countdown to MRO Africa in Cairo
T
HE CHOICE of Cairo, Egypt – the home of EgyptAir – as the venue for AFRICAN AVIATION’s 27th Annual MRO Africa Conference and Exhibition has been warmly welcomed by the African and international aircraft maintenance, repair and overhaul (MRO) community and from all indications there will be a large turnout in Cairo. The event will take place at the International CityStars Hotel, Cairo, from Sunday, 18th to Tuesday, 20th March, 2018. Returning to Cairo will be an important home-coming for MRO Africa. The first-ever event was hosted by EgyptAir Holding Company and EgyptAir Maintenance and Engineering in Cairo almost three decades ago and was chaired by Engineer Mohammed Fahim Rayan, of blessed memory, the then Chairman and CEO of EgyptAir
maintenance, and standardisation of curricula, plus cockpit and cabin crew training. Another new development will be a session on the Helicopter MRO business, focussing on maintenance support for helicopters operators involved in Police and
Security operations, Oil and Gas operations and General Aviation. As usual, a highlight of MRO Africa in Cairo will be the official tour of the impressive facilities of EgyptAir Maintenance and Engineering and EgyptAir Training Academy. ●
EgyptAir M&E has extensive MRO experience in aircraft, engines and components.
AFRICAN AVIATION’s
18th – 20th March, 2018 Holding Company. The success of that event, thanks to EgyptAir’s support, helped propel the MRO Africa conference into an annual fixture in the African aviation calendar. Since then, it has been held several times in Cairo, but not for a while. MRO Africa provides a valuable opportunity for African airlines and other aircraft operators, MROs, manufacturers, government regulators, and aviation suppliers and service providers to network and establish beneficial business relationships. Significantly, MRO Africa 2018 will include a Special Session on Aircraft Interiors, an increasingly important business segment for MROs in Africa and elsewhere. As usual, the MRO Africa Conference will be co-located with the annual African Aviation Training Conference which will address a comprehensive scope of training subjects including management, 28
EgyptAir M&E also has many approvals from CAAs and Transport Departments.
EgyptAir Training Academy provides MRO training for various aircraft types.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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MANUFACTURERS (OEMS)
Airbus partners with Bombardier
A
VIATION INDUSTRY consolidation – from airlines, to aircraft lessors and now aircraft manufacturers – is gathering pace. Airbus, Europe, and Bombardier, Canada, have agreed to form a joint venture called the C Series Aircraft Limited Partnership (CSALP) in which Airbus will have a majority stake; soon after, US-based Boeing commenced talks with Embraer of Brazil about a possible tie-up (see story below). The agreement between Airbus and Bombardier brings together Airbus’ global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family, positioning both partners to fully unlock the value of the C Series platform and create significant new value for customers, suppliers, employees and shareholders. Under the agreement, Airbus will provide procurement, sales and marketing, and customer support expertise to CSALP, the entity that manufactures and sells the C Series. At closing, Airbus will acquire a 50.01% interest in CSALP, Bombardier and Investissement Quebec (IQ) will own approximately 31% and 19% respectively.
The two manufacturers say that the single-aisle market is a key growth driver, representing 70% of the expected global future demand for aircraft. Ranging from 100 to 150 seats, the C Series is highly complementary to Airbus’ existing single-aisle aircraft portfolio, which focuses on the higher end of the singleaisle business (150-240 seats). They add that the world-class sales, marketing and support networks that Airbus brings into the venture are expected to strengthen and accelerate the C Series’ commercial momentum. In addition, Airbus’ supply chain expertise is expected to generate significant C Series production costsavings. The 100-150 seat market is expected to represent more than 6,000 new aircraft over the next 20 years. Notably, there will be no cash contribution by any of the partners, nor will CSALP assume any financial debt. The deal also contemplates that Bombardier will continue with its current funding plan of CSALP and will fund, if required, the cash shortfalls of CSALP during the first year following the closing up to a maximum amount of US$350 million. ●
Boeing in talks with Embraer
B
OEING AND Embraer have confirmed that they are engaged in discussions regarding a “potential combination”, the basis of which remains under discussion. Both aircraft manufacturers are keen to stress that there is no guarantee a transaction will result from these discussions. They also point out that any transaction would be subject to the approval of the Brazilian Government and regulators, the two companies’ boards and Embraer shareholders. These potential merger talks have taken on a sense of urgency following the joint venture agreed between Airbus and Bombardier, two fierce rivals of Boeing and Embraer, respectively. Further competition is looming on the horizon, with the new regional aircraft programmes from China and Japan taking shape and looking good, plus the existing Russian Sukhoi regional jet which can’t be dismissed. However, the Government of Brazil’s initial response is that it intends to retain its strategic equity stake in Embraer, although foreign investment from Boeing may be possible subject to terms. Rightly, Brazil is very proud of the 30
international success of Embraer’s aircraft products spread across the commercial, corporate and military spectrums. In particular, the Government does not want to relinquish controlling oversight of Embraer’s defence products. Analysing the situation, George Ferguson and Francois Duflot, two aerospace experts from Bloomberg Intelligence, say that “a BoeingEmbraer deal would focus on blunting gains from Airbus’ C Series venture with Bombardier. Boeing may see the need to have a stronger solution to airlines’ needs for a less-than-150seat aircraft, as its latest single-aisle offerings are optimised for closer to 200 seats. A purchase of Embraer, or portions thereof, would certainly cost less than developing a new airliner.” They add: “A Boeing-Embraer tieup would be complicated and likely require some way to share commercial aircraft while keeping business jets and defence separate. Embraer is the most important defence contractor to the Brazilian Government, which creates complications. Embraer is also Brazil’s national aerospace leader and a source of high-value jobs.” Airbus CEO Thomas Enders says: “This is a win-win for everybody.” ●
EASA’s order on Rolls-Royce engines
R
OLLS-ROYCE Plc, UK, is making every effort to resolve as quickly as possible an issue involving its fast-selling Trent 1000 engine. This follows an Emergency Airworthiness Directive by the European Aviation Safety Agency (EASA) to airlines to replace some Rolls-Royce Trent 1000 engines on their aircraft as some components are suspected of having corroded. EASA says that to reduce the risk of both engines shutting down in flight, a new life cycle limit number must be applied to 15 engines with specific serial numbers. In cases where a plane has two affected engines installed, the airlines must replace one of them. According to Rolls-Royce, around 400-500 Trent 1000 engines are affected by a problem in which components are wearing out earlier than expected, particularly engines installed on Boeing 787 aircraft. It confirms that several operators have encountered problems with Trent 1000s, which it is currently addressing.
Strategy Meanwhile, Rolls-Royce says it is reaching a new milestone in the development of its next generation of civil aerospace engines with the first run of its Advance3 demonstrator. The Advance3 core features a new “work split” with a two-stage high pressure turbine and a single-stage intermediate pressure turbine. Engineers have attached the core to a Trent XWB fan system and a Trent 1000 low pressure turbine to create the completed demonstrator engine. Eric Schulz, Rolls-Royce PresidentCivil Aerospace, says: “We are about to take another step towards making our future technology strategy a reality. The new core architecture being tested in the demonstrator is a critical part of our strategy and will help us to deliver even better economic and environmental performance for our customers.” In another development, Rolls-Royce has launched what it describes as a unique new range of apps, designed specifically for customer airline pilots, to give them a better insight into their engines. The Pilot App enables pilots and their airlines to save fuel and lower emissions by helping pilots optimise the performance of their engines. ●
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 01/01/2018 14:37 Page 31
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p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 01/01/2018 14:37 Page 32
Minister Sherif Fathi and Safwat Musallam, Chairman of EgyptAir Holding Company, joined female pilots for a group photo.
EgyptAir Training Academy hosts female pilots Sherif Fathi. The Ninety-Nines is the international organization of women pilots that promotes the advancement of aviation through education, scholarships and mutual support. It was established in 1929 by 99 women pilots and is represented in all areas of aviation today. The female pilots from around the
Global requirements for airline pilots
T
32
City-pairs with direct flights
Passenger trips 4.8B 3.2B
Active commercial aircraft
25k 18k
+1,6B
37K
+7K
25K
+12K
150k Growth of active pilot pool
2017 2027
2017 2027
2017 2027
Pilot age in 2016 A maturing pilot population
105k
<35 35-49
Mandatory retirement age is 65
Pilots retiring or exiting the workforce
2017 2027
>50
255k
2017 2027
2017 2027
HE PROJECTED increase in passenger air traffic is expected to double the size of the commercial aviation industry over the next 20 years and this growth has significant implications for the professional pilot pipeline worldwide, says Nick Leontidis CAE Group President, Civil Aviation Training Solutions. “We work with over 300 airlines and train more than 120,000 pilots annually at every phase of their career. These relationships give us a privileged vantage point of both the market and industry needs. Our 10year Airline Pilot Demand Outlook builds on a detailed forecast and addresses airline pilot needs globally. “Our analysis identifies a global requirement for 255,000 new airline pilots over the next 10 years to sustain and grow the commercial air transport industry. Rapid fleet expansion and high pilot retirement rates create a further need to develop 180,000 first officers into new airline captains, more than in any previous decade. These numbers mean that over 50% of the pilots who will fly the world’s commercial aircraft in 10 years have not yet started to train. This record demand will challenge current pilot recruitment channels and development programmes. In turn, new and innovative pilot career pathways and training systems will be required to meet the industry’s crewing needs and ever-evolving safety standards.” ●
world, including the Netherlands, Jordan, Switzerland, Sudan and the USA, visited EgyptAir Training Academy, one of the largest specialised academies in the Middle East and Africa, and learned about its latest training programmes. Of particular interest were the numerous pilot training simulators. ●
AIRLINE PILOT DEMAND – 10-YEAR OUTLOOK AT A GLANCE
2017 2027
E
GYPTAIR TRAINING Academy organised a tour of its comprehensive aviation training facilities during the 5th Annual Meeting of the Arabian Section of the Ninety-Nines International Organisation of Female Pilots which was held in Cairo recently under the sponsorship of Egypt’s Minister of Civil Aviation,
AMERICAS
EUROPE
MIDDLE EAST & AFRICA
ASIA-PACIFIC
+85K
+50K
+30K
+90K
New pilots
New pilots
New pilots
New pilots
New pilots required for growth and replacement
50%
70
180k
Of pilots flying by 2027 have not started to train yet
New pilots/day
New captains
Source: CAE.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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www.turkishtechnic.com
FO
R
U
M
p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 01/01/2018 14:37 Page 34
I
Strong profitability for airlines in 2018 – except in Africa The International Air Transport Association (IATA), representing 275 airlines comprising 83% of global air traffic, forecasts continued strong profitability in 2018, although operating margins will be squeezed by rising costs. It says that Africa is the only region where airlines will continue to make losses in 2018.
ATA FORECASTS global industry net profit to rise to US$38.4 billion in 2018, an improvement from the US$34.5 billion expected net profit in 2017 (revised from a US$31.4 billion forecast in June). Highlights of expected 2018 performance include: ● A slight decline in the operating margin to 8.1% (down from 8.3% in 2017); ● An improvement in net margin to 4.7% (up from 4.6% in 2017); ● A rise in overall revenues to US$824 billion (+9.4% on 2017 revenues of US$754 billion); ● A rise in passenger numbers to 4.3 billion (+6.0% on the 4.1 billion passengers in 2017); ● A rise in cargo carried to 62.5 million tonnes (+4.5% on the 59.9 million tonnes in 2017); ● Slower growth for both passenger (+6.0% in 2018, +7.5% in 2017) and cargo (+4.5% in 2018, +9.3% in 2017) demand; ● Average net profit per departing passenger of US$8.90 (up from US$8.45 in 2017); ● Strong demand, efficiency and reduced interest payments will help airlines improve net profitability in 2018 despite rising costs. 2018 is expected to be the fourth consecutive year of sustainable profits with a return on invested capital (9.4%) exceeding the industry’s average cost of capital (7.4%), according to IATA. “These are good times for the global air transport industry,” says Alexandre de Juniac, IATA’s Director General and CEO. “Safety performance is solid. We have a clear strategy that is delivering results on environmental performance. More people than ever are traveling. The demand for air cargo is at its strongest level in over a decade. Employment is growing. More routes are being opened. Airlines are achieving sustainable levels of profitability. It’s still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses. “The industry also faces longer-term challenges. Many of them are in the hands of governments. Aviation is the business of freedom and a catalyst for growth and development. To continue to deliver on our full potential, governments need to raise their game—implementing global standards on security, finding a reasonable level of taxation, delivering smarter regulation and building the cost-efficient infrastructure to accommodate growing demand. The benefits of aviation are compelling—2.7 million direct jobs and critical support for 3.5% of global economic activity. And the industry is ready to partner with governments to reinforce the foundations for global connectivity that are vital to modern life.” Passenger: Passenger numbers are expected to increase to 4.3 billion in 2018. Passenger traffic (revenue passenger
34
kilometers or RPKs) is expected to rise 6.0% (slightly down on the 7.5% growth of 2017 but still ahead of the average of the past 10-20 years of 5.5%), which will exceed a capacity expansion (available seat kilometers or ASKs) of 5.7%.This will push up the average load factor to a record 81.4%, helping to drive a 3.0% improvement in yields. Revenues from the passenger business are expected to grow to US$581 billion (+9.2% on US$532 billion in 2017). Strong performance of the passenger business is supported by expected robust GDP growth of 3.1% (the strongest since 2010). Cargo: The cargo business continues to benefit from a strong cyclical upturn in volumes, with some recovery in yields. Volumes are expected to grow by 4.5% in 2018 (down from the 9.3% growth of 2017). The boost to cargo volumes in 2017 was a result of companies needing to restock inventories quickly to meet unexpectedly strong demand. This led cargo volumes to grow at twice the pace
of the expansion in world trade (4.3%). Cargo yields are expected to improve by 4.0% in 2018 (slower than the 5.0% in 2017). While restocking cycles are usually short-lived, the growth of e-commerce is expected to support continued momentum in the cargo business beyond the rate of expansion of world trade in 2018. Cargo revenues will continue to do well in 2018, reaching US$59.2 billion (up 8.6% from 2017 revenues of US$54.5 billion). Costs: The biggest challenge to profitability in 2018 is rising costs. Oil prices are expected to average US$60/barrel for Brent Crude in 2018 (up 10.7% from $54.2/barrel in 2017). Jet fuel prices are expected to rise even more quickly to US$73.8 per barrel (up 12.5% on US$65.6 in 2017). Airlines with low levels of hedging (in the US and China for example) are likely to feel the impact of this increase more immediately than those with higher average hedging ratios (Europe). The fuel bill is expected to be 20.5% of total costs in 2018 (up from 18.8% in 2017). Labour costs have been accelerating strongly and are now a larger expense item than fuel (30.9% in 2018). Overall unit costs are expected to grow by 4.3% in 2018 (a significant acceleration on the 1.7% increase in 2017). This will outpace an expected 3.5% increase in unit revenues.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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Debt: The industry has used the period of positive cash flows to pay dividends and to reduce debt. The debt to EBITDAR (earnings before interest, tax, depreciation, amortization and rentals) ratio has fallen from 3.7x in 2016 to 3.5x in 2017. It is expected to fall further to 3.4x in 2018. Lower debt means reduced interest payments. Despite the squeeze in operating margins (from 8.3% in 2017 to 8.1% in 2018), the net margin is expected to grow to 4.7% (from 4.6% in 2017) because of lower interest payments. This will see net profits rise to a record US$38.4 billion in 2018 (up from US$34.5 billion in 2017). Regional outlook: All regions are expected to report improved profitability in 2018 and all regions are expected to see demand growth outpace capacity expansion. Carriers in North America continue to lead on financial performance, accounting for nearly half of the industry’s total profits. North America: Airlines in this region are forecast to generate the strongest financial performance with net profits of US$16.4 billion in 2018 (up from US$15.6 billion in 2017). Market conditions are expected to continue to be strong, with announced capacity growth (3.4%) likely to be slightly less than our traffic forecast of 3.5%. North American airlines have generated more than half of the industry’s profits produced in the past three years, but rising cost pressures have slowed further improvements. Low hedging ratios mean rising fuel prices have hit this region first and labour cost pressures have been an issue, though the expectation is that this pressure will diminish in 2018. Asia-Pacific: Airlines in Asia Pacific are forecast to see profits of US$9 billion in 2018 (up from US$8.3 billion in 2017). The strong cyclical rise in cargo markets has been a particular support for this region, whose carriers account for 37% of global cargo capacity. Anticipated growth in demand of 7.0%, will outpace announced capacity increases of 6.8%. Passenger market conditions vary across the region. Domestic markets have strengthened in China, India and Japan. New low cost market entrants in the ASEAN (Association of Southeast Asian Nations) region are intensifying competition and contributing to keeping profitability low. But there has been a pause in competitive pressures from the “super connectors” on longhaul routes as they face various challenges in their home markets. Europe: Airlines in Europe are expected to deliver a net profit of US$11.5 billion in 2018 (up from US$9.8 billion in 2017). Announced capacity increases of 5.5% trail the expected 6.0% growth in demand in 2018 supporting a strengthening of the region’s performance. European airlines are benefiting from a strong economic recovery in home markets, including Russia, a rebound from the terrorism events of 2016, and some consolidation following the failure of several regional airlines. The results of these developments are evident in the continent achieving the highest average passenger load factor in 2017 to date - 84.3%. Strong transatlantic demand is also supporting this performance, although new market entry is intensifying already stiff competition. And an early resolution to Brexit uncertainties is needed for airlines to plan and market their flying programs. Latin America: Airlines in Latin America are forecast to generate a US$900 million net profit in 2018 (up from US$700 million in 2017). Passenger demand is expected to grow by 8.0% in 2018, outpacing announced passenger capacity growth of 7.5%. The region will approach 2018 with momentum provided by the moderate recovery in the
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
Alexandre de Juniac, Director General and CEO, International Air Transport Association (IATA). Brazilian economy, reasonable growth in Mexico and the weaker US dollar over the last year. Middle East: Middle East carriers are forecast to see net profits improve to US$600 million in 2018 (up from US$300 million in 2017). Demand in 2018 is expected to grow by 7.0%, outpacing announced capacity expansion of 4.9% (the slowest growth since 2002).The region’s carriers face challenges to their business models, and from low oil revenues, regional conflict, crowded air space, the impact of travel restrictions to the US, and competition the new “super connector” (Turkish Airlines). Despite the challenges, there is positive momentum heading into 2018. Africa: African carriers are expected to continue to make small losses of US$100 million in 2018 following a collective net loss of US$100 million in 2017. Stronger forecast economic growth in the region is expected to support demand growth of 8.0% in 2018, slightly outpacing the announced capacity expansion of 7.5%. The wider economic situation is only improving slowly in Africa, which is hampering the financial performance of its airlines. The key Nigerian economy is only just out of recession and growth in South Africa remains extremely weak. While traffic is growing, passenger load factors for African airlines are just over 70% which is over 10 percentage points lower than the industry average. With high fixed costs this low utilization makes it very difficult to make a profit. Stronger economic growth will help in 2018, but the continent’s governments need a concerted effort to further liberalize to promote growth of intraAfrica connectivity. Economic Impact of Aviation: Unique city pairs served by airlines grew to over 20,000 in 2017 (+1,351 on 2016 and double the 10,000 city pairs served in 1996). This saves time for users and opens new links for tourism, trade and investment. Since 1996 the inflation-adjusted cost of air transport to consumers has halved. International tourists travelling by air are expected to spend more than US$750 billion in 2018, a rise of 15% in just over 2 years. The value of goods carried by airlines is expected to exceed US$6.2 trillion in 2018, representing 7.4% of world GDP. Direct employment by airlines will exceed 2.7 million worldwide in 2018. On average across the world we forecast that in 2018 each airline employee will generate over US$109,000 of gross value added (the firm-level equivalent to GDP), which is considerably higher than the economy-wide average. ●
35
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AIRLINES
BUSINESS AVIATION
AfBAA becomes member of IBAC
T
HE AFRICAN Business Aviation Association (AfBAA) has been voted on to the International Business Aviation Council (IBAC), the organisation’s 15th member. IBAC, based in Montreal, Canada, is a nonprofit, international trade association which holds permanent observer status at ICAO. IBAC promotes and manages the industry-leading standards for best safety practices through its International Standard for Business Aircraft Operations (IS-BAO); International Standard for Business Aircraft Handling (IS-BAH); Safety Management Tool Kit; SMS eLearning training; and Aircrew Identification Card. “We look forward to working with AfBAA to further advance safety excellence across Africa,” says its DG, Kurt Edwards. ●
From left: Kurt Edwards, Director General, IBAC; Alcinda Pereira, Best Fly; Nuno Pereira, Vice Chairman, AfBAA; Scott Macpherson, Chairman, IBAC; and Rady Fahmy, Executive Director, AfBAA.
BUSINESS AIRCRAFT GLOBAL ACCIDENT DATA OVER A FIVE-YEAR PERIOD (2011-2015) ACCIDENTS BY OPERATOR TYPE A summary of the total accidents over five years by type of operator is as follows:
ACCIDENTS BY OPERATOR TYPE – JET AIRCRAFT Business Jet Aircraft
Total Accidents (5 years)
Fatal Accidents (5 years)
Average Total Accidents per year
Average Fatal Accidents per year
Commercial/Air Taxi
63
18
12.6
3.6
Corporate
33
10
6.6
2.0
Owner-Operated
18
7
3.6
1.4
Government
3
1
0.6
0.2
Fractional
5
0
1.0
0
Manufacturer
1
0
0.2
0
ACCIDENTS BY OPERATOR TYPE – TURBOPROP AIRCRAFT Turboprop Aircraft
Total Accidents (5 years)
Fatal Accidents (5 years)
Average Total Accidents per year
Average Fatal Accidents per year
Commercial/Air Taxi
203
69
40.6
13.8
Corporate
29
11
5.8
2.2
Owner-Operated
92
40
18.4
8.0
Government
10
4
2.0
0.5
Manufacturer
1
0
0.2
0
Analysis: The majority of business aircraft accidents occur in the commercial category, where operations are governed by commercial regulations (such as FAA Part 135 and JAR OPS 1). The next most frequent number of accidents occurs with aircraft flown by business persons. Accidents of corporate aircraft remain rare. Note: No analysis provided for Fractional operations conducted with turboprop aircraft. Source: International Business Aviation Council (IBAC). 36
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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DRUMBEAT
● MAURITANIA AIRLINES International has taken delivery of a Boeing 737MAX 8, becoming the first operator in Africa of the new and improved aircraft. “The introduction of the 737 MAX into the growing Mauritanian fleet will help to profitably grow our network as we introduce new routes to Europe and the Middle East,” says CEO, Radhi Bennahi. Founded in 2010, the airline serves more than 10 destinations across Africa and the Middle East from its base in Mauritania’s capital city of Nouakchott. Its fleet includes one 737-800, one 737-700, two 737500s and the new 737 MAX 8. ● AFRICA WORLD AIRLINES, the growing Ghanaian carrier, has commenced flights from Accra to Monrovia, Liberia, and intends to add Abidjan, Dakar, Freetown and Banjul soon. The airline plans to replace its 50-seat Embraer E-145 on regional routes with 90-seat E-190s, which will arrive shortly. AWA is a particularly interesting African airline because one of its shareholders is Hainan Airlines (HNA), China, which also holds a very small equity stake in Comair, South Africa.
ROYAL AIR MAROC (RAM), the national carrier of Morocco, has accelerated its fleet modernisation programme by ordering four new Boeing 787-9 Dreamliners worth more than US$1.1 billion at list prices. The agreement includes two 787s ordered by RAM in December, 2016, which were not announced at the time, plus two ordered in December, 2017. It already operates five 787-8s to North America, South America, the Middle East and Europe. Currently, it has direct flights to 80 international destinations. RAM’s CEO and Chairman, Abdelhamid Addou (above right), says: “With more than 850 flights per month to Africa, RAM has the broadest presence across the continent of any airline. Our vision is to be the leading airline in Africa in terms of quality of service, quality of planes and connectivity.” He also stresses the airline’s “unique position as a geographic hub.” Isshane Mounir (above left), Senior Vice President, Global Sales and Marketing, Boeing Commercial Airplanes, adds: “Boeing is proud to support Royal Air Maroc’s growth plans within Africa and further connect Morocco to the world. ETHIOPIAN AIRLINES is quietly and diligently expanding and strengthening its footprint across the African continent, as evidenced by its latest airline joint venture. Forming Zambia Airways, in partnership with the Government of Zambia, complements Ethiopian’s two other airline joint ventures, namely, Asky in Togo, and Malawian Airlines in Malawi. Several other possible deals are on the table, although shrewd Ethiopian is treading cautiously as it is aware of the potential pitfalls. It is reported to have walked away from talks with Arik Air, Nigeria, which is currently in administration and being run by the Government-owned Asset Management Corporation of Nigeria (AMCON). The sticking points appear to be the terms of the deal and whether Ethiopian would have a free hand to manage Arik effectively without interference.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
37
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AIRPORTS
Role of airports in development
A
From left: Engineer Saleh Dunoma, MD FAAN; Captain Mukhar Usman, Director General, NCAA and Captain Rabiu Yadudu, Director of Operations, FAAN.
NCAA certifies two airports in Nigeria
T
HE NIGERIAN Civil Aviation Authority (NCAA) has certified the two leading airports in Nigeria, Murtala Muhammed International Airport (MMIA), Lagos, followed soon after by Nnamdi Azikiwe International Airport, Abuja. NCAA Director General, Captan Muktar Usman, describes the achievement as a significant milestone for air safety in Nigeria and adds that the certification of Kano, Port Harcourt and Enugu International Airports will be completed by the third quarter of 2018. According to Usman, the certification of MMIA was the first time in the history of aviation in Nigeria that an aerodrome certificate of operational safety had been issued to an airport in the country in line with the conventions of the International Civil Aviation Organisation (ICAO). “The successful completion of the certification exercise was contingent on the teamwork involving seasoned officials from the
Federal Airports Authority of Nigeria (FAAN), the NCAA, the certification team and other stakeholders.” Currently, less than 25% of international airports in the Africa and Indian Ocean Region are certified and Nigeria is now the only state in the region to have more than one certified international airport. “This achievement is the result of the collaborative efforts of the aviation agencies and is a testament to the strong commitment of the Federal Government of Nigeria to safety and security at airports across the country,” says Senator Hadi Sirika, Minister of State, Aviation. FAAN Managing Director, Engineer Saleh Dunoma, notes that the experience gained will assist in speeding up the certification process of other airports in Nigeria. He adds that FAAN will work hard to sustain and retain the certifications, so that they are not removed by the NCAA. ●
Murtala Muhammed International Airport, Lagos, Nigeria. 38
IRPORTS PLAY a crucial role in the economic and social health of communities, countries, regions and the world at large and a strategy must be crafted for their sustainable development to continue those benefits, says Angela Gittens, Director General of the Airports Council International (ACI). Speaking during the recent 27th ACI Africa/World Annual General Assembly and Conference held in Mauritius, Gittens remarked that the theme – ‘Bold leadership in a time of change’ – was very appropriate. In his keynote address, ICAO Council President, Dr Olumuyiwa Aliu, remarked that the projected doubling of flight and passenger volumes by the early 2030s poses significant risks to air transport safety performance, network capacity and efficiency, security preparedness, and emissions mitigation targets. During the event, ACI released a Policy Brief on airport networks and the sustainability of small airports. The Policy Brief focuses on one specific management model – the airport network and the sustainability of airports with low traffic volumes. It provides an overview of the state of airport networks worldwide based on a robust set of data and inventory of the world’s airport networks. It also puts forward practical policy recommendations. While the airport industry as a whole is profitable, financial statements show that as many as 66% of the world’s airports – most of which are small – operate at a net loss. The airport network model is one of the options to overcome this challenge. In order to do so, however, airport networks must continue to be able to cross-subsidise smaller airports in accordance with the ICAO framework. “Airport operators should be permitted to operate under a wide range of management models to serve their specific missions, their business needs and local circumstances,” says Angela Gittens. “When a network approach is pursued, cross-subsidies from profitable larger airports are often key to the sustainability of smaller airports, which in turn provide essential benefits in terms of safety, social and economic development, and positive outcomes for airlines.” The global airport industry used the occasion to provide an update on the progress it has been making on (Continued on page 40)
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 01/01/2018 14:38 Page 39
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p01-44 African Aviation Nov-Dec 2017 v1.qxp_print 04/01/2018 22:43 Page 40
AIRLINES
AIRPORTS
(Continued from page 38) addressing its CO2 emissions through the independent and voluntary global certification programme, Airport Carbon Accreditation. “The past year has seen continued engagement from airports – with 36 new applications to Airport Carbon Accreditation and more airports reaching a higher level of certification within the programme. As a result, we now have 201 airports – representing 39.6% of global air passenger traffic – participating in the programme.” The ACI appointed a new Chair and Vice Chair at the AGA in Mauritius. Bongani Maseko, CEO and Executive Director of Airports Company South Africa (ACSA) took over as Chair of the ACI World Governing Board from Declan Collier, the CEO of London City Airports. Maseko’s new position takes effect on 1 January, 2018. ●
O. R. Tambo climbs rankings
O
LIVER R. TAMBO International Airport, Johannesburg, South Africa, climbed five places in the global quality rankings for airports in its category in the third quarter of 2017, following an intensified service drive by airport management and staff. The airport moved up to 24th place in the global Airport Service Quality (ASQ) category for airports with 15 to 25 million passengers. The ASQ scores are based on independent passenger surveys administered by Airports Council International (ACI). “This improvement is most pleasing and is a significant achievement over a relatively short time,” says Bongiwe Pityi, the airport’s General Manager. An airport’s ASQ score is determined by factors that enhance the passenger’s experience, which include functionality of infrastructure, ambience, cleanliness, retail mix, food and beverage facilities, way-finding and user-friendliness, and Wi-Fi access. ASQ is the only worldwide programme that surveys passengers at the airport on their day of travel. In the ASQ rating for the third quarter, 2017, areas that achieved significant improvement at O.R. Tambo International Airport were overall satisfaction, waiting time at passport/ID inspection and restaurant/ eating facilities. Areas that achieved improvements included speed of baggage delivery, courtesy and helpfulness of airport and airline check-in staff, cleanliness of the airport terminal, and a feeling of being safe and secure. ● 40
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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AFRICAN AVIATION – INDUSTRY DATA AIR TRAVELLERS CONTINUE TO FLOCK TO DURBAN AND CAPE TOWN IN THE THIRD QUARTER The Aviation Barometer is published quarterly by Airports Company South Africa to provide an indication of current air travel trends in South Africa. The Barometer is based on the count of passengers using the network of nine airports owned and managed by the company in South Africa. These figures compare arrivals and departures in the latest quarter with the same quarter in the previous year. KEY INDICATORS
Q3 2016 vs Q3 2017
JUL
2015
SEP 2017
54
54 52
52
53
50 48
50 48
AUG 2016
JUL
AUG
1,150 1,100 1,050 1,000
SEP
950 900 850
NUMBERS IN THOUSANDS
2015
JUL 2016
461
2017
435
NUMBERS IN THOUSANDS
488
500 512 479
477
479 1,250 1,200
2016 2015
AUG
SEP
DEPARTURES
AUG
SEP
2017
1,096 1,159 1,193
44 42 40
47
52
JUL
ARRIVALS 1,300
51 50
54
56 54
SEP
DEPARTURES 55
58
50 48 46
AUG
57
ARRIVALS
JUL
INTERNATIONAL: • International arrivals increased by 3.91%, which translates to an extra 55,990 passengers, bringing the total to 1,486,352 passengers; • International departures rose by 6%, with an increase of 83,593 passengers, totaling 1,477,089 passengers.
1,090 1,102 1,166
4.97%
400 380 360
1,093 1,157 1,190
4.13%
400 380 360
460 440 420
1,089 1,102 1,162
up by
49
TOTAL
up by
480 432
460 440 420
520 500
405
480 437
4.88%
540
486
4.55%
520 500
ARRIVALS DEPARTURES
DEPARTURES
53
DOMESTIC
540 up by
PASSENGER STATS SUMMARY
1,100 1,147 1,216
ARRIVALS
ARRIVALS DEPARTURES
up by
• Cape Town International continued to enjoy strong growth in international arrivals, up by 20.4%, and international departures, up by 22.5%; • Among regional airports, George Airport continued to experience strong growth, with total passenger numbers rising by 8.5%; • O. R. Tambo International Airport, operating off a higher base of more than 20 million passengers a year, saw total passenger numbers rise by 2.9%, an increase of 154,445 passengers; • The domestic air travel category recovered somewhat after a decline in the second quarter, with arrivals up by 4.6% and departures rising by 4.9%.
INTERNATIONAL ARRIVALS & DEPARTURES
457
down by
-5.21%
1,109 1,150 1,212
down by
-4.16%
50
REGIONAL
ARRIVALS DEPARTURES
433
up by
6.00%
459 474
up by
3.91%
515 534
INTERNATIONAL
ARRIVALS DEPARTURES
• Airports Company South Africa’s nine airports handled more than 2.5 million arriving and departing passengers in the third quarter, a 5% increase on the comparable period in 2016; • The strongest performers were King Shaka International Airport and Cape Town International Airport, with increases of 7.9% and 6.6% respectively; • The passenger figures for King Shaka International Airport was underpinned by an 8.7% rise in domestic arrivals and an 8.3% increase in departures, more than offsetting a decline of 3% in international passengers;
JUL
AUG
SEP
NUMBERS IN THOUSANDS
+3.91%
+6%
ARRIVALS
DEPARTURES
PASSENGER STATS SUMMARY REGIONAL (Namibia, Botswana, Lesotho, Swaziland): • Regional arrivals decreased by 4.16% to 154,620 passengers; • Regional departures is down by 5.21% to 152,594 passengers.
– 4.16%
– 5.21%
ARRIVALS
DEPARTURES
1,735 1,677 1,583
1,700 1,600 1,500 1,400
JUL
AUG
SEP
DEPARTURES 1,900 1,800 1,700
Source: Airports Company South Africa (ACSA).
42
2017
1,732 1,662 1,627
1,900 1,800
DOMESTIC: • Domestic arrivals experienced an increase of 155,213 passengers, a 4.55% increase from the previous year; • Domestic departures increased by 166,288, a 4.88% increase from the same period last year.
2016
JUL AUG
1,723 1,673 1,580
ARRIVALS 1,749 1,640 1,560
SEP
JUL AUG
1,699 1,624 1,587
SEP
1,803 1,721 1,640
1,600 1,500 1,400
JUL
AUG
SEP
2015
DEPARTURES
ARRIVALS
NUMBERS IN MILLIONS
TOTAL ARRIVALS & DEPARTURES
+4.55%
+4.88%
ARRIVALS
DEPARTURES
* All numbers in charts are rounded off.
AFRICAN AVIATION / NOVEMBER-DECEMBER 2017
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