African Aviation Jan-Feb 2012 Issue

p01 Cover New v5_print 16/02/2012 10:35 Page 1

AFRICAN AVIATION

®

AFRICA’S AVIATION INDUSTRY JOURNAL

JANUARY-FEBRUARY, 2012

Global alliances in Africa

Challenges for Kenya Airways STAR ALLIANCE™

®

SOUTH AFRICAN AIRWAYS EGYPTAIR ETHIOPIAN AIRLINES

KENYA AIRWAYS

IATA’s advice to Africa

oneworld lags behind its rivals NO PARTNERS IN AFRICA

SAA strengthens balance sheet

p02 EgyptAir AE Rpt_print 13/02/2012 21:14 Page 1

p03 Dubai Airports New Ad_print pdf 12/02/2012 22:00 Page 1

p04 Ecobank 2 New Ad_print pdf 12/02/2012 22:52 Page 1

p05 Contents Edit v5_print 16/02/2012 11:03 Page 5

AFRICAN AVIATION AFRICA’S

AV I AT I O N

INDUSTRY

JOURNAL

Impasse over the EU ETS

T

32 32

HE EUROPEAN Union (EU) is wrong t o spend so much political capital trying to force the international aviation industry into its Emissions Trading Scheme (ETS), says Tony Tyler, Director General and CEO of the International Air Transport Association (IATA). “Positive economic m e a s u re s s u ch a s e m i s s i o n s t ra d i n g a re a necessary, if temporary, bridge to reach aviation’s environmental targets, but these measures must be globally co-ordinat ed and must avoid market distortions.”

Tyler recalls that IATA supported the EU ETS when it was proposed as a solution for intra-European travel and with the understanding that it would avoid the proliferation of environmental taxes and charges.

“Then look what happened. The European Parliament extended ETS beyond Europe’s borders. For airlines, unilaterally implementing ETS will distort the market, making airlines with hubs just beyond Europe’s borders more competitive for long-haul European traffic. Non-European Governments see this extra-territorial tax collection as an attack on their sovereignty and are taking action.”

Undoubtedly, the EU ETS issue has polarised the international aviation industry. One consequence has been that the concern over the EU’s list of banned airlines, which particularly affects the fortunes of African carriers such as LAM-Mozambique Airlines and TAAG-Angola Airlines, has now been eclipsed by the current global focus on the EU ETS. Tyler points out that the International Civil Aviation Organisation (ICAO) Council has adopted a resolution urging Europe to change its course; the US is processing legislation to ensure US carriers are not required to participate; China’s State Council has taken similar action, and at least 43 states have publicly made their opposition to the EU ETS known, including India, Japan, Canada and South Africa.

IATA believes that the way forward is through ICAO. “I sense a growing recognition in Brussels that a global scheme developed and implemented through ICAO would provide a superior solution to the problem of airline emissions,” says Tony Tyler, “and IATA will do all it can to suppor t the development of a global scheme.” ●

34 34

Published by AVIATION BUSINESS PUBLICATIONS AFRICAN AVIATION SERVICES LIMITED, UK. All rights are reserved worldwide.

CONTENTS NEWS BRIEF Impasse over EU ETS

5

PUBLISHER’S NOTE

7

AIRLINES Global alliances in Africa: oneworld lags behind its rivals Challenges facing Kenya Airways SAA strengthens its balance sheet Venter takes over helm at Comair Etihad Airways invests in Air Seychelles

8 12 14 14 16

AIRCRAFT MAINTENANCE MRO AFRICA: Developing Centres of MRO Excellence EgyptAir M&E wins NAS Air contract MRO Africa market worth US$1.2 billion Ethiopian MRO receives EASA Part 145 approval SAAT implements ‘Project THRUST’

18 18 20 22 24

FORUM How to improve aviation in Africa

26

TRAINING Ethiopian boosts Africa’s manpower pool African Aviation Training Conference & Exhibition 2012

28 28

AIR SAFETY Ethiopian refutes 737 crash report Responding to the EU blacklist

30 30

DRUMBEAT

31

AVIATION DEFENCE Kenya Police Air Wing acquires Eurocopter AS350 Airbus Military continues link with Denel

AIRPORTS

© COPYRIGHT 2012 – AFRICAN AVIATION

Kenya upgrades Kisumu Airport ACSA consortium wins Brazil contract

PUBLISHER AND EDITOR NICK FADUGBA.

BUSINESS DIRECTOR JEFF LING.

ALL CORRESPONDENCE SHOULD BE SENT TO : THE PUBLISHER, AFRICAN AVIATION, AFRICAN AVIATION SERVICES LIMITED, LION HOUSE, 80 EGRET CRESCENT, COLCHESTER, ESSEX C04 3FP, UNITED KINGDOM. TELEPHONE: + 44 1206 844288 or FAX: + 44 1206 844299.

AFRICAN AVIATION, Africa’s Aviation Industry Journal (ISSN 0960-5614) - incorporating AFRICAN AIRLINES, Africa’s Airline Industry Journal (ISSN 0960-5606) and AFRICAN AIRPORTS, Africa’s Airports & ATC Journal (ISSN 0960-5622) - is published in the United Kingdom by AFRICAN AVIATION SERVICES LIMITED. NB: Only Paid-up Subscribers Are Guaranteed Regular Copies of AFRICAN AVIATION.

SUBSCRIPTIONS : ADVERTISING :

AFRICAN AVIATION is provided to African Airlines, Airports, Aviation Authorities, Government Organisations and African Aviation Companies at the Reduced Annual Subscription Rate of UK£95. It is also available to Readers outside Africa by Annual Subscription: UK£138 within the UK and US$265 outside the UK. AFRICAN AVIATION - THE JOURNAL FOR AFRICA’S AVIATION DECISION-MAKERS FOR ADVERTISING OPPORTUNITIES, PLEASE CONTACT AFRICAN AVIATION ON: E-mail: enquiries@africanaviation.com TELEPHONE: + 44 1206 844288. FAX: + 44 1206 844299.

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

5

p06 Thales New Ad_print pdf 15/02/2012 14:57 Page 1

p07 Publishers Note v6_print 16/02/2012 23:42 Page 7

AFRICAN AVIATION AFRICA’S

AV I AT I O N

INDUSTRY

JOURNAL

PUBLISHER’S NOTE

AFRICAN AVIATION - 22 Years Later FRICAN AVIATION was launched 22 years ago with the raison d’etre of promoting aviation development in Africa in order to foster socioeconomic growth, trade and tourism and to help improve the lives of the people of Africa. This vision and mission have continued to inspire AFRICAN AVIATION for more than two decades through thick and thin and our commitment has never wavered. And never will. We firmly believed then – and still do – that a safe, reliable, efficient and affordable air transport industry in Africa linking Cairo to Cape Town and Addis Ababa to Lagos can provide the key to unlock the economic potential of this great continent of unfulfilled dreams.

For 22 years, no airline in Africa has provided more inspiration to AFRICAN AVIATION than Ethiopian Airlines. Some attribute the success of Ethiopian to the fact that it enjoys a monopoly in its home market. But we believe the true reasons are much more profound. Visionary Ethiopian has achieved so much with so little.

It encountered many obstacles in its pioneering efforts to establish a route network across the continent but persevered and succeeded. It has never engaged in empty rhetoric or political bluster to achieve its goals and from the very beginning it has always strived to be self-reliant through the relentless development of its human resources. Ethiopian prides itself in striking tough deals with its suppliers. Also, it never defaults on its payment obligations, a rare airline, indeed.

EgyptAir and Kenya Airways also deserve a special mention. Founded in May, 1932, EgyptAir has held its own in the competitive international airline business for 80 years and has played an invaluable role in promoting the country’s vital tourism industry. Its commitment to technical excellence is amply evidenced by its modern aircraft fleet, training centre and state-of-the-art MRO facilities. Its resilience will be tested by the unintended consequences of the Arab Spring. Meanwhile, 22 years ago, Kenya Airways was technically insolvent with its future in doubt. Today, Kenya Airways is truly a pride to Africa. Its remarkable turnaround will provide a perfect thesis subject for MBA students for many years to come. Why have so few African airlines been able to emulate Kenya Airways and EgyptAir and Ethiopian Airlines?

Professor Rigas Doganis, a Visiting Professor in Air Transport at Cranfield University, UK, author and distinguished commentator on the airline industry, diagnosed the “Distressed State Airline Syndrome.” He said the symptoms were: 1) Substantial losses (large accumulated debts, under-capitalisation); 2) Over-politicised (excessive Government interference, frequent management changes); 3) Strong unions (Inf luence many decisions, delay innovation and change); 4) Overstaffed/low labour productivity; 5) No clear development strategy; 6) Inappropriate and/ageing fleet; 7) Bureaucratic management practices; and 8) Poor service quality.

It would be prudent for all African carriers to benchmark themselves against these key criteria.

For their part, many African Governments have almost given up on their national airlines because they don’t bring in sufficient tourists to boost the economy and have become a financial burden on the state. Similarly, unlike their African airline counterparts, many African airports seeking funds to modernise their infrastructure regard the influx of foreign airlines into Africa as a revenue opportunity, rather than a threat.

In conclusion, 22 years after the launch of AFRICAN AVIATION, the challenges ahead still remain daunting.

What is required to survive and prosper is strong leadership, commitment and a clear vision. ●

A

NICK FADUGBA CEO, AFRICAN AVIATION & FORMER SECRETARY GENERAL AFRICAN AIRLINES ASSOCIATION (AFRAA)

FEEDBACK Readers’ views are welcomed.

Please email your comments to: nickfadugba@africanaviation.com ® AFRICAN AVIATION AFRICAN AVIATION / FEBRUARY-MARCH 2012

7

p08 Airlines Edit v4_print 17/02/2012 07:40 Page 8

AIRLINES

STAR ALLIANCE™

®

SOUTH AFRICAN AIRWAYS EGYPTAIR ETHIOPIAN AIRLINES

KENYA AIRWAYS

NO PARTNERS IN AFRICA

Senior Government and airline officials cut a cake in Addis Ababa to mark Ethiopian’s admission to the Star Alliance.

GLOBAL ALLIANCES IN AFRICA

oneworld lags behind its rivals

T

HE WORLD’s three global airline alliances – oneworld, SkyTeam and Star Alliance – have turned their attention to Africa in a bid to establish a strong presence in a market with almost one billion people, vast natural resources, a growing economy, wealthy elite, increasingly mobile and entrepreneurial middle class, and attractive fare yields. Their interest in Afr ica has also been spurred by their need to secure a foothold in every regional market in order to build a truly global network and gain maximum competitive advantage.

The three global airline alliances now account for over two-thirds of

STAR ALLIANCE™

the world’s total airline capacity (ASKs), while the unaligned legacy carriers, such as Emirates, Etihad Airways and Virgin Atlantic Airways, collectively account for the next largest share. Notably, none of 8

the world’s leading low-cost carriers, such as Ryanair, easyjet, air berlin and Air Asia, belong to a global alliance despite their growing share of global ASKs.` The Star Alliance has taken the

lead position in Africa following the admission of Ethiopian Airlines in December, 2011, as the Alliance’s third carrier based on the African continent, alongside South African Airways and EgyptAir. Rival SkyTeam has achieved a strong presence in Africa through the membership of Kenya Airways, while oneworld has not yet acquired a partner on the African continent, although it has an affiliate relationship with Comair, the South Afr ican franchisee of British Airways.

The Star Alliance was established in 1997 and its members include Luf thansa Ger man Airlines, US carrier United Airlines, Singapore

Airlines and Shenzhen Airlines, China. With the addition of Ethiopian, the Star Alliance network in Africa has grown considerably. In total, the 16 Star Alliance member carriers serving Africa offer more than 750 daily flights to over 110 destinations in 48 countries on the continent, with Addis Ababa, Cairo and Johannesburg serving as the main hubs. On a global scale, the Star Alliance now counts 28 airlines offering a choice of more than 21,000 daily f lights to 1,290 destinations in 189 countries. “ We have taken a large step for ward in completing our Afr ica strategy,” said the then Star Alliance CEO Jaan Albrecht. “With Ethiopian

®

Airlines now part of the Star Alliance network we offer our customers the widest choice of flights connecting to, from and within Africa.” Through its membership, Ethiopian now offers its

(Continued on page 10)

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p09 NAC Avionics New Ad_print 16/02/2012 10:57 Page 1

p10 Airlines Edit v4_print 17/02/2012 07:40 Page 10

AIRLINES (Continued from page 8)

standard for priority airport services customers the benefits of being part across the alliance. Its member of a global airline alliance, including airlines also benefit from cost-savings worldwide reach via the extensive derived from joint synergies through network, seamless travel and status co-location, defined as a shared space recognition through the frequent or terminal between three or more f lyer programmes. “This is in line members. They are able to reduce with our ef for ts t o lay a strong costs through co-location of check-in foundation for the airline to achieve areas, combining personnel for its ‘ Vision 2025’ objectives,” said ef f iciencies, reduction of g round Tewolde Gebremariam, Ethiopian’s handling costs and optimised lounge CEO. utilisation.

The admission earlier of SAA and EgyptAir to the Star Alliance followed a similar pattern and since then both Afr ican car r iers have benef itted Oneworld members include British significantly from access to a much Airways, American Airlines, Japan wider route network, traffic f lows, Air Lines, Iberia, Cathay Pacif ic, increased revenues and numerous Qantas, Finnair and R oyal synergies. In Egypt, for example, all the Star Alliance members f lying to Cairo have moved into the new Ter minal 3 building in order to achieve synergy between the operators and create an optimal experience for customers.

STAR ALLIANCE Kenya Air ways’ SOUTH AFRICAN AIRWAYS admission to SkyTeam EGYPTAIR seemed a natural f it ETHIOPIAN AIRLINES given the fact that KLM R oyal Dutch Airlines has owned KENYA AIRWAYS a 26% equity stake in the Afr ican car r ier since 1996. KLM was subsequently bought by Air France and both European airlines are members of SkyTeam.

The combined networks in Afr ica of Kenya Air ways, KLM, Air NO PARTNERS France, Delta Air IN AFRICA Lines, China Southern and other SkyTeam members is formidable and the traf f ic feed has enabled Kenya Airways to spread its footpr int across the African continent and give Ethiopian Jordanian. The oneworld alliance is Airlines stif f competition. Other currently experiencing upheavals members of SkyTeam include which could affect its future. For Aeroflot, Aeromexico, Alitalia, China example, American Airlines recently Easter n, Korean Air, Tarom and filed for protection from its creditors Vietnam Airlines. under the US Chapter 11 r ules, SkyTeam of fers its 487 million another member, Malev Hungarian annual customers globally over 14,500 Airlines, has just gone bankrupt, f lights to 926 destinations in 173 while the proposed membership of countries. In March this year it will Kingf isher Airlines, once India’s introduce SkyPriority, a series of leading operator, has been postponed distinctively branded priority airport due to the carrier’s serious financial services offered to Elite Plus, First diff iculties. On the positive side, and Business Class customers. The British Airways and Iberia recently aim is to align all members to a combined forces to for m the common and consistent ser vice International Airline Group (IAG)

oneworld

™

10

®

which has added value to both parties and positioned IAG for fur ther acquisitions in the airline industry, With the four strongest airlines in Africa now members of either the Star Alliance or SkyTeam, oneworld is expected to accelerate its search for a full partner on the continent.

But there are not many attractive candidates left. In Nor th Afr ica, Royal Air Maroc, T unis Air and Air Algerie are potential targets for global alliances to a certain degree. In West Africa, Arik Air, Nigeria, and Air Nigeria are possible candidates, while south of the Equator, TAAGAngola Airlines could be attractive.

The obvious country is Nigeria which has a large, mobile population, a g rowing economy and an almost inelastic demand for air transport.

One of the key reasons for the emergence of alliances is the fact that it is becoming increasingly difficult for airlines to maintain their market share unless they are allied to one of the global groupings. In addition, alliances help boost airlines’ revenues and provide opportunities to maintain more routes and frequencies for growth, by feeding passengers between members’ networks. Also, in the dr ive to reduce costs, particularly in the recent financially difficult times for the industry, airlines can achieve substantial ef f iciencies through working more closely together. Furthermore, individual passengers and cor porate customers are increasingly recognising the value and benefits which alliances can offer them. So far, laws in many jurisdictions have been an obstacle to cross-border ownership and control of foreign airlines but this is expected to be soon eroded.

With oneworld perhaps belatedly examining its alliance options in Africa, as far as Africa is concerned, from the pattern of evidence in recent years, it is clear that given the chance, most African airlines would prefer to par tner with a foreign carrier rather than with another airline on the continent. ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p11 Ethiopian New Ad_print pdf 12/02/2012 21:45 Page 1

p12 Airlines Edit v4_print 16/02/2012 10:36 Page 12

AIRLINES

Titus Naikuni, Group Managing Director and CEO, Kenya Airways.

Kenya Airways may acquire up to 26 Embraer E-jet aircraft to expand.

Challenges for Kenya Airways

T

ITUS NAIKUNI, Group Managing Director and CEO of Kenya Air ways, threw down the gauntlet in mid-2011 when he boldly declared that his airline is seeking to consolidate its presence in the African market by flying from Nairobi to every capital city on the continent by 2013.

This was not an empty boast. While many other African airlines have been struggling to survive, Kenya Airways has spent the past few years diligently modernising its aircraft f leet and relentlessly expanding its route network. Like a long distance runner, Kenya Airways caught up with and over took Ethiopian Airlines, the or iginal pioneer of Afr ican route networks, and has left late-comer South Afr ican Air ways quite far behind. It has increased its market share by extending its reach within and outside Africa from its Nairobi hub and by providing frequency, capacity and a good in-flight service.

But it has not been all smooth sailing for the Kenyan national car r ier, as evidenced by its unexpected profit warning in January this year. Evanson Mwaniki, the airline’s Chairman said that its full year earnings for the fiscal period ending March, 2012, would be at least 25% less than the level of earnings in the previous year due to the Eurozone cr isis, r ising fuel pr ices and the political tension in Egypt and Nigeria.

Mwaniki said that although the airline achieved positive results for the first half of fiscal 2012, economic and political factors have negatively impacted the airline’s performance in the second half. This contrasted with his statement in November, 2011, that “ The Board is optimistic that the company’s performance will continue 12

improving in the second half of the year.” The airline reported a profit of US$41 million in its f iscal year ending March, 2011, and profits after tax of US$23.7 million in the six months up to September, 2011.

Even if Kenya Airways’ full year results turn out to be not as bad as Mwaniki forecasts, the profit warning has cast a f leeting shadow over the airline’s much anticipated rights issue which is intended to raise substantial capital to help fund its expansion plans. The airline has been given the go-ahead from its Board and has already employed CFC Stanbic Bank as its financial advisor for the rights issue.

Rights issue The Board recently approved the airline’s 10-year plan, ending in fiscal 2020/2021, which is intended to enable Kenya Air ways to remain competitive by positioning itself to capture the traffic flows of the future.

The ambitious plan includes the roll out of new destinations covering all six continents, as well as a f leet acquisition programme. Part of the proceeds of the r ights issue will be used to f inance pre-deliver y payments for new aircraft for the years 2013/2014 and 2014/2015. The timing of the issue, as well as the exact amount to be raised, may be inf luenced by the new economic realities.

Another challenge for Kenya Airways is its plan to launch a low cost carrier (LCC) called Jambo Jet. An LCC has been on the cards for many years and the airline has entered joint ventures with other operators and experimented with LCC

operations itself, all without much success. Yet it needs a cohesive, tightly-run and cost-efficient LCC to maximise the g rowing business potential from domestic and nearby regional markets. Few legacy airlines have succeeded in establishing and running a profitable LCC, as they are completely different business models.

Competition from smaller domestic carriers, such as Fly540, as well as a desire to capture more feeder traffic, may have spurred Kenya Airways into the LCC market. Jambo Jet is expected to focus on connecting Mombasa, Kisimu, Eldoret and Malindi to Nairobi. Owning the LCC will give Kenya Airways full control over the product and enable it to ensure a quality service, unlike in the past.

Other challenges include a shortage of pilots, restless unions, inadequate airport infrastructure in Nairobi, the high cost of fuel, integrating new aircraft into its fleet, and upgrading its aircraft maintenance, repair and overhaul (MRO) capabilities.

Kenya Airways signed a purchase agreement in 2006 for nine Boeing 787 aircraft, with an option to purchase four additional aircraft. The first of these much-delayed aircraft, due to manufacturing problems, is scheduled to be delivered in the last quarter of 2013. The 787s will replace ageing 767 aircraft in the airline’s fleet.

In addition, Kenya Airways has signed an agreement with GECAS to obtain two Boeing 777-300ER aircraft on 12-year operating leases, with deliveries scheduled for October, 2013, and May, 2014, respectively. The airline has also ratified a contract with Embraer which could see it acquiring up to 26 E-190 jet aircraft for domestic and regional routes. ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p13 Emirates New Ad_print pdf 14/02/2012 18:33 Page 1

p14 Airlines Edit v2_print 16/02/2012 10:38 Page 14

AIRLINES

SAA strengthens its balance sheet

A

FTER SEVERAL years of financial uncertainty and seeming management instability, South Afr ican Air ways (SAA) is making reasonable prog ress in strengthening its balance sheet and expanding its route network. Today, the airline’s primary objectives are to establish a sustainable capital base and to achieve financial, commercial and operational efficiency.

According to Chairperson, Cheryl Carolus, SAA’s financial position and the state of its business continue to show significant improvement. “SAA is well positioned for growth and is ready to soar beyond expectation,” she says. Carolus and the SAA board have provided strong suppor t to the management team headed by Siza Mzimela. This has provided a conducive environment for the changes in management style and direction that needed to be made by the relatively new CEO.

million in cash was generated. Net retained earnings of R681 million exceeded the main key performance indicator for the year of R201 million set by the board. While this improvement is tangible, SAA’s tendency over the past decade to keep restating its accounts for prior years is a cause for concern. “ We remain in a challenging financial position with a high debt to equity ratio and we shall continue

Mango SAA and its low-cost subsidiary, Mango, carried 8,505,744 passengers in its last fiscal year, a 2.4% decrease from the previous year which Mzimela attributes to the global economic downturn. On the plus side, the SAA Group generated a net profit of R782 million South Afr ican Rands, an increase of 77% on the restated figure of R442 million achieved in the prior year. Group operating profit rose by 66% to R807 million from a restated R487 million in the previous year.

Capital and reserves rose to R1,641 million from the previous year ’s restated R992 million and R618

competitors on the London route alone. “In the face of this competition, price erosion is a constant threat and this increases the importance of SAA’s on-going product, aircraft and quality improvements,” says Mzimela.

She adds: “Expanding SAA’s route network in Africa will enhance its strategic and financial strength on the continent.” SAA currently serves 21 destinations across the Afr ican continent, which is approximately the same number as the Middle East carrier, Emirates, and is less than the number of African destinations served

by Kenya Air ways and Ethiopian Airlines. So there is considerable scope for growth, if it implements the right strategy. In the past, SAA has not been too successful in penetrating East and West Africa through lasting joint ventures. A lot will depend on its ability to pursue opportunities for collaboration and co-operation, while mitigating the risks.

Strategy Siza Mzimela, CEO, South African Airways. to pursue and consolidate financial recover y to obviate the need for additional equity from our shareholder,” says Mzimela. The days of Government-owned SAA automatically turning to its shareholder for subordinated loans to keep it afloat during a financial crisis are over.

Around 50 dif ferent airlines compete with SAA at its Johannesburg hub and it faces more than 20 direct and indirect

Pointe Noir, the economic capital and second largest city of Congo, is SAA’s four th new destination launched on the continent in its 2011/2012 fiscal year, joining Ndola, Zambia, Kigali, Rwanda, and Bujumbura, Burundi. Pointe Noir is also the centre of the oil industry in the Congo. Fur ther af ield, SAA introduced non-stop flights to Beijing, China, in January this year. China is one of South Africa’s largest trade partners and Mzimela believes that substantial demand for tourism and trade to China will contribute to the success of the new route. ●

Venter takes over helm at Comair

C

OMAIR, SOUTH Africa’s privately-owned carrier, bucked the trend of the corporate world for five and a half years by having Joint Chief Executive Officers, Gidon Novick and Erik Venter, running the business, but it has now reverted to orthodox management style with the emergence of Venter as the sole CEO and the resignation of Novick. The airline’s Board of Directors decided that Comair would be best served by “single and focused leadership.”

Venter joined Comair as Financial Manager in 1996 and was appointed Joint CEO in July, 2006. “Agility is key to remaining competitive in an industry inf luenced by a weak 14

economy and consumer spend, high oil prices, excessive airport charges and a weakening local currency,” he says.

Gidon is the son of Comair ’s Chairman, Dave Novick who joined the airline in 1961.

Comair owns kulula, the low-cost carrier, and has a very successful franchise agreement with British Airways. The company operated 40,366 flights and carried 4,650,568 passengers in its fiscal year 2011. Its operations are focused on South Africa, Sub-Saharan Africa and the Indian Ocean islands. It also provides other travel related and airline pilot training services.

It describes f iscal 2011 as an

extremely tough year. Despite strong growth of 19% in turnover, earnings declined by 14% and earnings per share by 28%. “External factors certainly played their part – a 20% increase in our fuel bill, crippling increases in airport charges and a stagnant local economy. We set ourselves a medium-term objective of a 10% profit margin and we are some way away from achieving this.”

Comair has recently been making pre-delivery payments to Boeing for the eight new 737-800s which are scheduled to be delivered from July this year. Finance was partly raised through a rights issue in 2010, plus a loan through Investec Limited. ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p15 Turkish Airlines New Ad_print 14/02/2012 19:00 Page 1

p16 Airlines Edit v5_print 16/02/2012 10:38 Page 16

AIRLINES

Etihad Airways invests in Air Seychelles

T

HE DECISION by Etihad Air ways, the fast-g rowing national airline of the United Arab Emirates, to purchase an equity stake in f inancially-strapped Air Seychelles, the national carrier of the Seychelles, could trigger a new trend in Africa, where several airlines are in need of a life-line.

The Government of the Seychelles and Etihad have signed a Memorandum of Understanding whereby Etihad will acquire 40% of Air Seychelles for US$20 million. In addition, Etihad will provide a shareholder’s loan of US$25 million to meet working capital requirements and support network development. As part of the deal, the Government will match Etihad’s investment with a US$20 million capital injection into Air Seychelles.

“This is a game-changing strategic

partnership for us, establishing Air Seychelles on a sustainable growth trajectory and offering a realistic way forward for long-term commercial growth,” says Joel Morgan, Seychelles Minister of Home Affairs, Environment, Transport and Energy. “The partnership simultaneously provides international presence, strategic penetration and a bright future for our national carrier.”

Consolidation He adds: “The aviation industry is under enormous pressure right now, with small airlines, especially vulnerable to global economic instability and on-going oil price volatility. In this context, consolidation offers the best possible solution for Air Seychelles. This agreement will allow Air Seychelles to share the benefits of

James Hogan, CEO, Etihad Airways, acted swiftly to clinch the deal.

16

the visionary strategy of one of the world’s leading airlines and leverage its economies of scale.”

The agreement includes a five-year contract for Etihad to manage Air Seychelles, during which they will work together to develop a renewed fleet and network growth plan for the island-based carrier. In addition, Etihad is entitled to increase its frequency of f lights between Abu Dhabi and Mahe from four per week to daily, as well as providing new services to the islands.

Etihad commenced services to the Seychelles in November, 2011, and it has quickly proven to be a very popular holiday destination. “This investment is a natural next step towards growing our operations in the increasingly important leisure markets of the Indian Ocean and Africa,” says James Hogan, Etihad’s President and CEO. “ There is a need for greater connectivity to support this tourism boom, and both Air Seychelles and Etihad Airways are well-positioned to leverage that demand into substantial commercial growth.” In addition to Europe, Asia, and more specifically China, is increasingly important to the Seychelles national economy as a source of trade and tourism.

Cramer Ball has been seconded from Etihad to Air Seychelles as the new Chief Executive Officer. He was formerly Etihad’s Regional General Manager, Asia Pacif ic South and Australasia. Shelley Cole has also been seconded to Air Seychelles as Chief Financial Of f icer. She was previously Etihad Airways’ Regional Finance Manager, Asia Pacific, and before that held positions at Shell International and Caltex in Sydney, Australia. ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p17 Citi New Ad_print pdf 12/02/2012 21:42 Page 1

p18 MRO Africa v4 rev1_print 16/02/2012 13:52 Page 18

AFRICAN AVIATION’S 21ST ANNUAL

NAIROBI, KENYA

Developing Centres of MRO Excellence

D

EVELOPING CENTRES of Excellence in aircraft Maintenance, Repair and Overhaul (MRO) within Africa will be one of the key objectives of AFRICAN AVIATION’s 21st Annual ‘MRO Africa’ Conference & Exhibition taking place from 21st – 23rd February, 2012, in Nairobi, Kenya. Fostering closer technical co-operation between Afr ican airlines, promoting mutuallybenef icial relationships with aircraft and engine manufacturers, aircraft lessors and with MRO service providers and suppliers will also be high on the agenda of this long-established international aviation conference.

The African airline industry has come a long way since the ‘MRO Africa’ Conference was launched 21 years ago. In the early days, the

focus of the Conference was primarily on ensuring that Africa’s f leet of mostly ageing commercial aircraft was properly maintained to ensure air safety. The continent lagged behind the rest of the world in terms of f leet modernisation.

Today, the f leets of many African airlines are being completely transformed with the acquisition of sophisticated modern aircraft, both turboprops and jetliners.

Manufacturers Major aircraft manufacturers, such as Airbus, Boeing, Bombardier and Embraer, as well as engine manufacturers, such as CFM, GE, Rolls-Royce and Pratt & Whitney, have worked closely with African carriers and financial institutions to overcome the many challenges

that previously inhibited f leet modernisation. In addition, the growing role in Africa of leading aircraft leasing companies, such as GECAS, ILFC, ALC, CIT, AWAS, BOC Aviation, Or ix and ACG, cannot be underestimated.

New technology aircraft present new MRO challenges for African carriers. It is thus opportune that the world’s leading MRO service providers and suppliers, long-term supporters of the ‘MRO Africa’ Conference & Exhibition, are seeking to expand their relationships with airlines and aircraft operators in Africa. The ‘MRO Africa’ Conference & Exhibition will once again provide a unique platform for all the key parties to explore a wide scope of opportunities for the development of MRO partnerships and joint ventures. ●

EgyptAir M&E wins NAS Air contract

E

GYPTAIR Maintenance & Engineering successfully outbid other MRO providers from Europe, Asia and the Middle East to win a contract from NAS Air for heavy maintenance checks on several Airbus A320 and Embraer E190 aircraft. The contract shows sustained confidence in EgyptAir M&E’s long-standing MRO capabilities inspite of the country’s current challenging political environment.

“We were selected by NAS Air as we managed to implement the required tasks included in the previous contract efficiently and in a timely manner,” says Engineer Said El Makkawy, the newly appointed Chair man and CEO of EgyptAir M&E. He recently took over the position from Engineer Abdel Aziz Fadel who has been promoted to the 18

post of Deputy Chairman and CEO of EgyptAir Holding Group of Companies.

Engineer Said El Makkawy adds: “ The senior managers of NAS Air

conducted several meetings with their counterparts at EgyptAir M&E to evaluate our quality and safety procedures and their compatibility with international standards and regulations. We are proud to once again win the trust of NAS Air.” EgyptAir M&E says that winning the bid is evidence of its high standards of safety and quality of work, as well as its strong customer support, ef f iciency, highly qualif ied staf f, availability and cost-effectiveness, along with its international approvals and certif icates obtained over an 80-year period.

The contract covers 14 aircraft compr ising eight A320s and six E190s. The maintenance checks will commence in mid-February and are due to be completed by the end of this year. ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p19 CFM New Ad_print pdf 12/02/2012 22:47 Page 1

p20 MRO Africa Edit v6_print 16/02/2012 11:33 Page 20

AIRCRAFT MAINTENANCE

What are the MRO Strategies in Africa for New-Technology Aircraft such as the Boeing 787 (left) and the Airbus A350 (right)?

MRO Africa market worth US$1.2 billion A LEADING international aircraft spare parts supplier, Locatory.com, estimates that the value of the Maintenance, Repair and Overhaul (MRO) market in Africa is approaching US$1.2 billion and is likely to grow considerably in the foreseeable future.

P

OINTING TO the intensif ied modernisation of African airline fleets, which has seen significant orders and deliveries of new Airbus, Boeing and Embraer aircraft, Locatory.com says this will result in a much higher demand in Africa for aircraft technical support services, as well as technical personnel and pilot training solutions. New technology aircraft such as Airbus A320s and A330s, Boeing 737NGs, 777s and, very soon, 787s, as well as Embraer ’s increasingly popular E-jets are swelling the fleets of African airlines.

Another industry expert remarks that, already, major African airline MROs, such as EgyptAir, South African Airways and Ethiopian Airways are busy strategising how to increase their third-party aircraft maintenance business in Africa and elsewhere. Others, such as Royal Air Maroc, are currently too busy coping with internal challenges to focus on growing their MRO business, while yet

others, such as Kenya Airways and Air Nigeria, which are not well known for their third-party MRO activities, are contemplating upping their game in this highly competitive area – as long as it does not prove to be a drain on their scarce financial resources.

Co-operation Locatory.com contends that the predicted g rowth in the Afr ican aviation market will also require increased co-operation between African operators and foreign technical partners and suppliers, as well as a more streamlined aviation spare parts and component’s import system.

On a cautious note, Locatory.com says that it does not see the pace of g rowth in Afr ica matching that expected in the Asian aviation market.

It also draws attention to Africa’s relatively small total aircraft fleet and some of the problems that still need to be resolved if the technical support

Who will maintain Air Namibia’s new Airbus A319 aircraft?

20

and services business in Africa is to really take off.

“Although Afr ica is becoming increasingly attractive to investors, several factors still stand in the way of major development. For example, the market is still restricted by the lack of proper infrastructure, the loss of qualif ied personnel through emig ration, bureaucracy, high operating costs and insuf f icient experience in co-operation. All of these issues need to be properly addressed if Africa is to realise its full aviation expansion potential,” says Vytautas Vorobjovas, the company’s Chief Commercial Officer.

The increasing domination of African long-haul routes by nonAfrican carriers from Europe, the Middle East and the USA may also curb substantial growth in this area by the continent’s carriers, although under-developed domestic and intraAfrica routes provide great scope for network expansion.

“On-line aviation spares platforms are still considerably less popular in Africa than other parts of the world and this could be attr ibuted to internet connection issues, differences in payment systems, as well as Europe and USA-imposed Government regulations,” says Vorobjovas. “A faster integration into aviation spare par ts platfor ms systems could significantly accelerate the African aviation sector development. In order to reduce expenditure without compromising on quality and effectiveness, African airlines must seek to apply spare par ts supply innovations, including out-sourcing and new-generation technologies.” ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p21 Lufthansa Rpt Ad_print pdf 12/02/2012 21:44 Page 1

p22 MRO Africa Edit v4_print 16/02/2012 11:39 Page 22

AIRCRAFT MAINTENANCE

Ethiopian MRO receives EASA Part 145 approval

T

HE EUROPEAN Aviation Safety Agency (EASA) recently granted EASA Par t 145 Approval to Ethiopian Maintenance, Repair and Overhaul (MRO), the maintenance division of Ethiopian Airlines.

Significantly, the approval authorises Ethiopian MRO to repair airplanes and aircraft components of airlines registered under any European Union member country, and to issue EASA Airworthiness Certificates. Boeing 767 and 757 fleet line maintenance, base air frame maintenance and component maintenance are included within the scope of the EASA approval.

Mesfin Tassew, Chief Operating Officer of Ethiopian, says that the approval enables the carrier to attract more airline customers in Africa, the Middle East and possibly Europe to use Ethiopian MRO’s services for the maintenance of their aircraft and components. This is expected to bring in additional revenue to the Ethiopian Aviation Group in line with its ‘Vision 2025’ strategy.

Ethiopian MRO, headed by Zemene Nega, worked for more than a year to align its processes with EASA Part 145 requirements. Following which EASA conducted a rigorous audit of the Ethiopian MRO facilities and processes, and conf ir med full compliance to its standards before it issued the approval.

Ethiopian MRO has been approved by the Ethiopian Civil Aviation Authority, the US Federal Aviation Administration (FAA) and other national CAAs in the region for several decades. The addition of the EASA approval now allows the airline to issue all internationally recognised 22

maintenance certificates for airplanes and components.

In respect of long-haul aircraft suppor t, it will be recalled that Ethiopian Airlines and Boeing signed an agreement last year that enables the airline to participate in the Boeing 777 Component Services Programme (CSP), a parts-provisioning scheme that reduces Ethiopian’s up-front investment in spare parts and offers a quick and reliable supply of critical parts from a pool of participating 777 operators.

Agreement The CSP is offered jointly by Boeing and Air France Industr ies/KLM Engineer ing and Maintenance.

Ethiopian’s ag reement initially covered the three 777-200LRs operated by the airline, with plans to

add additional 777s acquired.

“The long range of the 777-200LRs necessitates a dedicated inventory pool of selected high-value, dispatchcritical components,” says Ethiopian CEO, Tewolde Gebremariam. “The CSP of fers Ethiopian signif icant efficiency and savings in managing the supply chain by reducing our investment in costly par ts inventories.”

The CSP allows airlines t o outsource most of the cost and logistics associated with keeping impor tant par ts on hand, while greatly reducing inventory. Under the prog ramme, Boeing and Air France/KLM commit to providing par ts covered in the ag reement within 24 hours of a request. Usually, the inventory required to support an airplane type can cost millions of dollars. ●

Air France Industries/KLM M&E will help repair damaged Libyan aircraft.

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p23 Embraer Service New Ad_print pdf 12/02/2012 22:36 Page 1

p24 MRO Africa Edit v3_print 16/02/2012 11:34 Page 24

AIRCRAFT MAINTENANCE

SAAT implements ‘Project THRUST’

S

OUTH AFRICAN Air ways Technical (SAAT) has developed a comprehensive strategy to transform itself into a financiallysustainable entity that is “the leader of the Sub-Saharan Afr ica MRO business.” SAAT currently provides a full maintenance service to the SAA Group (comprising SAA and its lowcost subsidiary airline, Mango) and has significant third-party contracts with local and regional airlines.

In its last f inancial year, SAA Technical achieved a turnaround of R152 million South African Rands when compared with the previous reporting year, returning a profit of R63 million. This positive result underscores the determination of its parent company, SAA, to transform SAAT into a money-maker.

In recent years, SAAT’s customers have included Lufthansa, Air France, British Airways, Air Namibia, Air Seychelles, Air Zimbabwe, Boeing, TAAG-Angola, Qantas, Comair,

Kulula, Velvet Sky, Air Malaysia and Rwandair. The company says that its current growth strategic focus will shape its expansion for the next few years and beyond.

In May 2010, SAAT engaged the US consultancy company, ICF SH&E, to investigate its market potential and identify the steps to be taken to develop the business into a multicustomer MRO by 2012, potentially through a mix of organic growth and strategic par tnerships. The f irst phases of the review identified MRO trends, customer opportunities and competitor benchmarks.

An in-depth operational, financial and organisational assessment was also completed. The f inding’s indicated that SAAT’s quality and technical work are well regarded from both a quantitative and qualitative perspective. It was also established that cer tain areas within the business needed much improvement in order to ensure long-ter m

South Afrian Airways recently took delivery of new Airbus A330 aircraft.

24

sustainability of the business.

SAAT operates a full-ser vice maintenance, repair and overhaul (MRO) organisation which it describes as the largest in Africa. It has held full and uninterrupted US Federal Aviation Administration (FAA) certification since the late 1980s.

Its market segments include: major airframe checks, engine overhaul, mechanical components, avionics, and line maintenance. Its main operational base is Johannesburg and it also services customers in Cape Town, Durban and smaller airports in South Africa.

The overall objective of the company’s new strategy is to significantly improve its bottom line on an on-going basis and by R100 million South African Rands in the first year of implementation. In order to deliver on the recommendations of the study, SAAT launched ‘Project THRUST’. This acronym refers to the concept of thrust used in aviation to describe the power an aero-engine generates to achieve take-off speed.

The first ‘T’ in the acronym stands for Teamwork; the ‘H’ for Holistic Approach, which is absolutely essential if the company’s ambitious plans for the future are to be fulfilled; the ‘R’ stands for Reliability, which is SAAT’s major sales proposition; the ‘U’ for Unit Cost, which the company says it is determined to reduce in the interests of improving its competitiveness; the ‘S’ is for Safety, referring to the safety standards that must be observed in all operations; and the ‘T’ is for Turnaround Time, which the SAAT team also aim to reduce in order to keep more of its clients’ aircraft in the sky, where they make money. ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p25 Bombardier New Ad_print pdf 12/02/2012 22:13 Page 1

FO R U M

p26-27 Forum Edit v3_print 13/02/2012 12:56 Page 26

How to improve aviation in Africa Addressing African airlines recently, TONY TYLER, Director General and CEO, IATA, said he plans to pay special attention to improving air safety in Africa.

Later in Brussels, he warned that the European Union’s list of banned airlines has unintended consequences. For example, banning all carriers from Mozambique because of the country’s lack of safety oversight – including LAM Mozambique Airlines which is on IATA’s IOSA registry – does not improve safety.

A

VIATION IS a team effort. Strong partnerships across the industry are necessary to deliver the best value to our members. I don’t need to tell you that aviation is a tough business. Our 2011 forecast is for a 1.2% margin which would be a US$6.9 billion profit. If we are right, the aggregate bottom line for the industry since 2001 will be a loss of US$30 billion on revenues of nearly US$5 trillion. It is difficult to make a living in an industry that is all turnover and no leftover.

But aviation is an industry with a very important role.

Globally it supports 33 million jobs and US$3.5 trillion in economic activity. The connectivity that aviation makes possible turned our planet into a global community. With two or three kilometers of runway, even the most remote outpost has access to the world. This is particularly important in Africa with vast distances and poor land infrastr ucture. In many cases there is simply no alternative to air travel. And every plane that takes off carries with it almost infinite possibilities – uniting families, facilitating exploration and linking business. And it is our duty to ensure that every flight is as safe, secure, and environmentally efficient as possible.

State of the Industry Aviation faces enormous challenges. And Africa certainly has its share. African carriers made a US$100 million profit last year. We expect them to break even in 2011, but fall into losses of US$100 million in 2012. The political unrest in North Africa has dampened demand for African carriers. Over the first nine months of 2011, passenger traffic grew by only 0.7%. But comparing just the month of September shows growth of 2.3%. It’s less than half the global average, but an improvement on the performance earlier in the year.

The deepening economic uncertainty in Europe has yet to take a bite out of global passenger demand. All eyes are on air cargo, where we usually get an early warning of what is to come. Volumes carried by African carriers over the first nine months of 2011 were down by 3.1%. Despite the gloomy economic outlook, we don’t foresee much relief on fuel prices. Our forecast average for crude oil in 2012 is US$100 per barrel. The industry fuel bill will top US$200 billion, consuming 32% of operating costs.

Safety The top priority is always safety. And I have to say that I am concerned. Between 2005 and 2008 the Western Built Jet hull loss rate in Africa improved – from nearly 10 hull losses per million flights down to 2. That was still 2.5 times worse than the global average. But it was a significant step forward. In 2009, the rate jumped back to

26

9.94 and in 2010 it was 7.41. For the first 10 months of 2011, with two hull losses, the rate was 4.33 hull losses per million flights. That does not compare well to a global average of 0.37. Sure, the trend is back in the right direction. And there have been no hull losses this year with IATA carriers. But aviation must be safe for all airlines and in all regions. And that means we have much work to do in Africa.

When the hull loss rate for African aviation neared 10 in 2005, there was urgency among the region’s stakeholders to improve. That coincided with IATA’s decision to make the IATA Operational Safety Audit (IOSA) a condition for membership. We also committed US$3 million to the Partnership for Safety program that focused on helping African carriers achieve this tough but necessary global standard.

The Nigerian example shows what can be achieved. In 2005 it had the worst safety record on the continent with four of the eight hull losses in that year. Contributing factors to these accidents included gaps in safety oversight, ground infrastructure and pilot proficiency. Dr. Harold Demuren was then appointed Director General of the Nigerian Civil Aviation Authority (NCAA). He brought innovation and proved that world-class safety is possible in Africa. There was one further hull loss in 2006. And there have been no hull losses in Nigeria since 2007. Dr. Demuren is owed a great debt of gratitude by IATA and all of our members for his tireless work. His work should be an inspiration. Making IOSA a requirement for all carriers operating long-haul from Nigeria was one of the innovative measures that Dr Demuren introduced. And I encourage other African governments to join Nigeria, Egypt and Madagascar in making IOSA a requirement.

It is hard to say what reversed the improvement trend in 2009, but data tells us that runway excursions remain the biggest safety challenge for Africa, followed by loss of control accidents. Data is an important tool. For African carriers participating in IATA’s Implementation Program for Safety Operations in Africa – which makes available flight data analysis – we have seen a 50% reduction in safety events. Based on runway excursion data my colleague Gaoussou Konate, Director for Safety Operations and Infrastructure in Africa, has challenged Afr ican airlines present to integ rate the Runway Excursion Risk Reduction Toolkit into simulator training and daily operations. Have we risen to the challenge?

Let me re-emphasize that IATA does not believe that banning carriers improves safety. Working with airlines to implement global standards and best practices – as we do with IOSA – delivers results. None-the-less, the list of banned airlines is a political reality that is not going to

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p26-27 Forum Edit v3_print 13/02/2012 12:56 Page 27

FORUM

Tony Tyler, Director General and CEO, International Air Transport Association (IATA). disappear. And improving safety is incumbent on all in this industry. So we need to work together.

Security Over the last months I have spent considerable time promoting IATA’s Checkpoint of the Future concept for a risk-based approach to airport security. Along with using passenger data already collected for governments to differentiate screening processes, the vision is for technology to enable passengers to walk through the security checkpoint without stopping, unpacking or removing clothing. We are receiving enthusiastic support from the US – the key driver of global aviation security.

And over a dozen states and INTERPOL have signed a statement of principles in support of the concept. Notably, Nigeria was the first and we are in advanced discussions with several African countries.

Passenger security is only half the story. Since the Yemen printer cartridge incident last year, cargo security has been high on the regulatory agenda. We are very concerned at the European Commission’s pending regulation to create a secret “Red list” of countries whose air cargo security infrastructure has been deemed inadequate. These countr ies would be subject to significant additional processes and procedures in order to be per mitted to maintain air cargo links with EU members.

As is the case with the EU’s list of banned carriers, we believe that this is not the right approach because it does not address the underlying issues in cargo security.

Instead of delivering more effective security screening, it will create two classes of countries: the “haves” and the “have-nots”. Among the have-nots are likely to be those states most in need of our support, and for which air cargo offers a path towards economic prosperity.

Environment Environment also needs co-operation and a global approach As you know, aviation committed, as a united industry value chain, to improve fuel efficiency by 1.5% annually to 2020, cap net emissions from 2020 and cut net emissions in half by 2050 compared to 2005 levels. To help guide this process, South African Airways sits on the IATA Environment Committee – its first member from this continent. And Kenya Airways is the first African carrier to use the IATA Industry Standard Carbon Offset program and we hope that Egyptair will soon be the second.

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

The challenge is commercialization – to increase the supply and reduce the cost. To do so, and create jobs in the green economy, we need a united voice asking governments to create the fiscal and legal frameworks to suppor t the development of a successful biofuels industry. There is huge potential for Africa to develop local biofuels industries that could spread economic opportunity across the continent.

Unfortunately, the attention of governments is being distracted by Europe’s unilateral plan to include international aviation in its Emissions Trading Scheme (ETS) from 2012. The industry has long opposed this because regional schemes distort markets and open the door to a patchwork approach of conflicting, competing or layered measures including taxation. States are now expressing very clearly their opposition to Europe’s ETS. They see the extra-territorial imposition of taxes as a threat to sovereignty. The US is debating legislation preventing its carriers from participating. And recently the ICAO Council agreed to a Declaration, sponsored by 26 states, urging Europe to abandon its plans and support a global solution through ICAO. African carriers may expect to be sheltered from the EU ETS and other market based mechanisms through the de minimis rule adopted by ICAO in 2010. This is by no means certain. Another issue is that of a carbon tax on aviation. Such taxes will hurt the aviation industry and many economies – especially those that rely heavily on trade and tourism.

Infrastructure We must also keep an open dialogue with governments on infrastructure. There is no question that Africa needs infrastructure investment. And it needs to be funded. But like all innovations in aviation, infrastr ucture development is most successful when it is a team effort built on global standards. Since 2008 we have seen a worrying trend of infrastructure development fees being imposed with little prior notification and often with no consultation and in the absence of transparency. For example Mali, Senegal and the Democratic Republic of Congo are among 12 states to have introduced such fees since 2008. And the combined annual cost to airlines is over US$100 million – more than the African industry made in 2010. We need to remind governments that prefinancing of infrastructure is against ICAO principles.

Benefits of Aviation How much do governments know about our business and the impact that a successful aviation industry can have on national economies and sustainable development? To help support industry arguments for better policy with quantif ied data on the benef its of aviation, IATA commissioned Oxford Economics to complete a series of 54 national studies – including South Africa, Nigeria, Kenya, Egypt and Morocco. Our study on South Africa revealed that aviation contributes 2.1% of South African GDP and employs over 220,000 South Africans. It also pays some R6 billion South African Rand in taxes. The overall economic benefit of the 21 million people and 240,000 tonnes of cargo that travel to, from and within South Africa exceeds R100 million Rands. Understanding the economic importance of aviation lends tremendous weight to our arguments on issues such as regulation of monopoly suppliers. That is a discussion that we are having in South Africa following enormous price hikes allowed under the current system. ●

27

p28 Training Edit v5_print 16/02/2012 11:27 Page 28

TRAINING

Recent technical and pilot graduates from the Ethiopian Aviation Academy with Ethiopian CEO Tewolde Gebremariam.

Ethiopian boosts Africa’s manpower pool

E

THIOPIAN AIRLINES’ international reputation for manpower training was further endorsed in November last year when its Technical Training Centre was off icially recognised by the European Aviation Safety Agency (EASA) as an approved EASA Part-147 type maintenance training organisation. This coveted approval was attained after rigorous and continuous assessment by EASA. The Technical Training Centre is an integ ral par t of the Ethiopian Aviation Academy and is now one of the few training centres in Africa qualified to provide EASA-approved type maintenance training on modern aircraft and engines. EASA, an agency of the European Union, has been given the regulator y and

executive tasks in the field of civilian aviation safety, including the approval and authorisation of organisations involved in the maintenance of aeronautical products and providing technical services. “ This success is the result of teamwork by the staff and management of Ethiopian Airlines,” says Samuel Assefa, Vice President of the Ethiopian Aviation Academy. The EASA approval enables the Academy to provide world standard technical training. Another benefit is the boost in skilled aviation manpower on the African continent which is helping to offset the aviation brain drain experienced in recent years.

For example, in March last year, the Academy g raduated 87 aviation

AFRICAN AVIATION TRAINING CONFERENCE & EXHIBITION

®

Participants at the 1st Annual African Aviation Training & Recruitment Conference & Exhibition, held in Nairobi, Kenya, 2011. The 2nd Annual African Aviation Training Conference will take place in Johannesburg, South Africa, from 9th-11th May, 2012 and key supporters include CAE and Lufthansa Technical Training, etc.

28

technicians in the fields of aircraft maintenance, avionics, airframe and powerplant maintenance.

The g raduates were nationals of Mozambique, Chad, Namibia and Ethiopia. In May it graduated 15 Sudanese and two Mozambique aviation maintenance technicians, while in August it g raduated 50 aviation maintenance technicians all from Ethiopia.

The Academy has achieved similar results in cockpit and cabin crew training. Its Pilot Training School has graduated over 955 pilots since its inception in 1964. Of these, 630 were from Ethiopia and 325 were from other countries.

Ethiopian Airlines signed a training and consultancy services agreement with FlightPath International based in Canada aimed at developing and implementing a Multi-Crew Pilot License (MPL). This is a new pilot training and licensing system established by the International Civil Aviation Organisation (ICAO) in 2006 to qualify First Officers for airlines.

The new training scheme will prepare the cadets to f ly multi-crew, multiengine and technologically advanced aircraft and will enable the airline to get qualified First Officers at a much faster rate. The pilots are being trained as First Officers on Boeing 737NG and Bombardier Q-400, respectively, using the MPL programme.

The airline recently took delivery of two DA42 pilot training aircraft from Diamond Aircraft Industries, Austria.

This was not long after it acquired 10 other DA42s.

Overall, the Ethiopian Aviation Academy offers qualified training for pilots, technicians, cabin crew, marketing and sales personnel primarily for its own needs and also for carriers mainly from Africa and the Middle East. ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p29 ATR New Ad_print pdf 12/02/2012 22:26 Page 1

p30 Safety Edit v3_print 16/02/2012 11:25 Page 30

AIR SAFETY

Ethiopian refutes 737 crash report

E

THIOPIAN AIRLINES has strongly refuted the f inal investigation report released by the Lebanese Ministry of Public Works and Transport on the crash of an Ethiopian Boeing 737-800 on 25th January, 2010. The airline maintains that the Lebanese Government has been speculating on the cause of the accident being pilot error right from the day of the accident contrary to Annex 13 of the International Civil Aviation Organisation (ICAO).

“We are not surprised that the investigation process in the last couple of years was used only to justify the speculation made publicly before the beginning of the investigation process,” says Tewolde Gebremariam, Ethiopian’s CEO. “To this effect, the Ethiopian Civil Aviation Authority has appended its comments to the report and expressed its regret and disagreement both in the investigation process and the final report.”

He added that the final report was “biased, lacking evidence, incomplete and did not present the full account of

the accident.” In addition, he said that the report contained numerous factual inaccuracies, internal contradictions and hypothetical statements that were not supported by evidence.

According to the final report into the accident produced by the Lebanese Civil Aviation Authority, pilot error was the overriding cause of the crash off the coast of Lebanon.

Flight ET-409 departed Beirut’s Rafic Hariri Airport after midnight and crashed into the Mediterranean Sea around five nautical miles southwest of the airport just four minutes and 15 seconds after take-off, killing all 90 people on board.

Flight crew The report concluded that the probable causes of the accident were “the flight crew’s mismanagement of the aircraft’s speed, altitude, headings and attitude through inconsistent f light control inputs resulting in loss of control.” The report suggests that the pairing of the

pilots may have been a contributory factor. It contended that their level of experience on the aircraft type “although within the required approved standard, did not constitute a comfortable margin.”

Captain Desta Zeru, Ethiopian’s Vice President, Flight Operations, says that all the facts clearly indicate that the aircraft disintegrated in the air due to an explosion which could have been caused by a shoot-down, sabotage or lightning strike.

“Although the final report wrongly alleges that the Captain’s actions, statements and degraded performance during that period were as a result of spatial disorientation and loss of situational awareness, the fact of the matter is the CVR and DFDR clearly show that the pilot was making appropriate inputs in an effort to control the aircraft,” says Tewolde Gebremariam. “Both pilots were properly trained and qualified.

Any characterisation of our pilots contrary to the foregoing is pure fabrication that cannot stand any scrutiny.” ●

Responding to the EU blacklist

T

WO AFRICAN airlines adversely af fected by the European Union’s blacklist of carriers banned from operating in EU airspace are working diligently with their respective Governments to resolve the problem.

Africa, rather than being punitive.

TAAG-Angola Airlines and LAMMozambique Airlines outlined their response to the EU’s action at AFRICAN AVIATION’s 20th Annual ‘Air Finance for Africa’ Conference held in Addis Ababa.

Civil Aviation Authority and has initiated a major turnaround programme. A key area of focus is on achieving excellence in operational safety requirements.

This involves improving compliance with international safety norms, as well as compliance with aircraft maintenance standards.

IOSA-certified

Dr Marlene Manave, CEO, LAM-Mozambique Airlines.

Eng Adriano de Carvalho, Board Member, TAAG-Angola Airlines.

Simultaneously, both carriers have appealed to the EU to revisit its procedure of imposing operating bans to ensure the policy is conducive to improving air safety in

To overcome the EU restrictions, Engineer Adriano de Carvalho, a Board Member of TAAG-Angola, says the airline is working closely with the Angolan Government and

30

Dr Marlene Manave, CEO, LAMMozambique, says that the EU ban has been particularly damaging for those airlines which are strictly compliant with all international safety and security standards. For example, LAM is an IOSA-certified car r ier. She adds that the Government of Mozambique is providing the necessary support to the country’s CAA to address the safety concerns of the EU. Under an ICAO programme, Mozambicans are being trained in maintenance and regulator y oversight and surveillance so that the CAA can conform to international safety standards. ●

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p31 Drumbeat Edit v4_print 16/02/2012 11:25 Page 31

DRUMBEAT ● A LEADING operator based in Reunion Island, Corail Hélicoptères, has ordered two new Eurocopter EC130-B4 helicopters in order to expand its tour ism and air taxi flights. They will be delivered in the second half of 2012. The company already operates an all-Eurocopter rotary-wing aircraft fleet, comprising of four AS350s and AS355s.

Since its creation in 2003 with a Eurocopter AS355N, the company has built up its core tourism and air taxi business, along with f iref ighting and evacuation airlift dur ing f looding conditions. The company is headed by Alfred Chane Pane, carried 22,000 passengers in 2011, and is considering offering a regular helicopter ser vice from Reunion to the island of Mauritius. ● AIR MAURITIUS, which is headed

by André Vijoen, will increase its capacity to Shanghai, China, by over 100% (from 14,300 seats to 31,200 seats) as from 26th March this year.

The current weekly Airbus A330 flight to Shanghai will no longer stop over in Kuala Lumpur and will be operated by the larger A340 aircraft.

The airline says it will maintain its three weekly operations to Hong Kong and two weekly operations to Kuala Lumpur/Singapore.

“For the past two years we have been rebalancing g rowth to the emerging economies and Asia in line with the Government’s strategy,” says Viljoen. “Our decision to fly non-stop will enable us to provide more capacity on the route and improve the product. We will also provide connections to Reunion, Madagascar and South Africa.” In particular, the Government of Mauritius is keen to attract more visitors from China. The airline reported a net loss of €6.3 million Euros in its second quarter from July to September, 2011. ● ROYAL JORDANIAN Airlines has added two new destinations to its African network, namely, Lagos, Niger ia, and Nairobi, Kenya.

Initially, it is flying twice weekly to Lagos with a 280-seat, two-class Airbus A330, and twice weekly to Nairobi with a narrow-body A319.

The airline’s President and CEO, Hussein Dabbas, explains that the two routes are intended to open new travel and tourism markets, given the decline in tourism traf f ic to

GE CAPITAL Aviation Services Limited (GECAS) has delivered three new Boeing 737-800 aircraft on operating leases to Royal Air Maroc (RAM), the flag-carrier of Morocco. The aircraft came from GECAS’ existing order book with Boeing and were the third, fourth and fifth new aircraft delivered to the carrier by the lessor in 2011. The airline operates a fleet of more than 55 aircraft to some 83 destinations in Africa, Europe, the Middle East and North America. GECAS delivered the first two 737-800s to RAM in August and October, respectively.

RAM is modernising its fleet in order to reduce its operating costs, provide a better product and become more competitive. It has faced tough competition - in particular from low-cost carriers - since the Government of Morocco liberalised the air transport industry. GECAS, the US and Irish commercial aircraft financing and leasing business of GE, has a fleet of over 1,750 owned and managed aircraft with approximately 245 airlines in 75 countries worldwide. GECAS has played an increasingly important role in Africa in recent years by providing aircraft capacity to airlines on the continent.

Jordan from the traditional markets of Europa and North America. He adds that the new routes also support Jordan’s goal of positioning the countr y as a gateway to the Middle East and a hub for connecting to the rest of the world. ● THE GOVERNMENT of Côte d’Ivoire intends to form another airline to replace cash-strapped Air Ivoire which went bankrupt last year. According to a Government spokesman, the new carrier will be called Air Côte d’Ivoire and will commence domestic and regional operations in April this year with two Airbus A319 aircraft acquired on operating leases. The shareholders will be the Government (51%), Air France (35%) and local pr ivate investors (14%). ● EMIRATES IS spreading its wings further in Africa with the launch of two new destinations – Lusaka, Zambia, and Harare, Zimbabwe, in February, 2012. The Dubai-Lusaka-

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

Harare service will be operated by an A330-200 aircraft in a three-class configuration that offers 12 First Class seats, 42 in Business Class and 183 in Economy Class. The airline says that its passengers from Zambia and Zimbabwe will be able to conveniently connect to the UK as it operates 105 flights per week from Dubai to the UK, including five times daily to Heathrow and three times daily to Gatwick.

Emirates’ new route to Harare will provide strong competition to Air Zimbabwe which continues to face various financial and operational challenges. However, Emirates insists that industry rumours that it obtains state subsidies are a myth.

“It is a concern to Emirates that unsubstantiated claims of subsidy against our organisation continue to be perpetuated by some competitors and from other quarters. Like other pro-competition and free-market voices in our industry, we are firmly and historically opposed to state aid for airlines.”

31

p32 Aviation Defence v4_print 16/02/2012 11:16 Page 32

AVIATION DEFENCE

Kenya Police Air Wing acquires Eurocopter AS350

T

HE KENYA Police Air Wing has taken delivery of a Eurocopter AS350-B3e helicopter to expand its airborne law enforcement and crime prevention duties. It is the first customer in Africa to operate the enhanced version of the AS350, which has an uprated Turbomeca Arriel 2D turbine engine allowing better takeoff performance and reduced maintenance costs.

The new helicopter was recently handed over to the Kenya Police Air Wing in Nairobi. This follows an open competitive tender conducted some time earlier which was won by Eurocopter Southern Africa (Pty) Ltd (EASL), the g roup subsidiar y in charge of Southern Africa markets. Its

missions will include anti-poaching and anti-terrorism operations and it will also be deployed in search and rescue, casualty evacuation, personnel transport and various other civic protection roles.

Range and payload were primary considerations in selecting this helicopter type as the Kenya Police Air Wing required a helicopter capable of patrolling the dense builtup areas around the major cities of Nairobi and Mombasa, as well as cover ing smaller towns and communities spread over large areas.

Kenya has a land area of 580,000 square kilometres and a population of nearly 39 million people. It has a diverse geography including a long

Range and payload were key considerations in selecting this helicopter.

Indian Ocean coastline. Inland, the ter rain var ies from savannah grasslands to forests, mountains and even desert areas.

According to Eurocopter, the Kenya Police Air Wing chose the AS350-B3e “due to its super ior operational capability and its proven r ugged reliability which will enable it to operate in Kenya’s var iable conditions.” The European manufacturer adds that the AS350-B has become the reference helicopter for airborne police units in sub-Saharan Afr ica, where law enforcement agencies in Angola, Namibia, Botswana and South Africa have also selected the type.

EASL was established in 1994 and is a wholly-owned subsidiar y of Eurocopter. It employs 80 people and generates an annual turnover of over R300 million South African Rands through the sale of Eurocopter products and services in Southern Africa. It supports regional customers such as the South African Air Force, the South African Police Services and the Kenya Police In addition, it supports a larger number of smaller customers spread across more than 20 countries in Africa and the Indian Ocean. It is able to provide technical support and pilot training, and is currently deploying a full flight Super Puma simulator in Johannesburg to of fer basic and advanced simulator training to its African customer base. ●

Airbus Military continues link with Denel

A

IRBUS MILITARY refunded South Afr ica’s pre-deliver y payments worth R3.5 billion South African Rands at the end of 2011 in respect of the aborted A400 military transport aircraft deal. But on a positive note, Airbus Military CEO, Domingo Urena, stresses that despite the cancellation, South African Government-owned Denel will continue to manufacture and supply several parts of the A400M, including aircraft top shells, wing fuselage fairing, wing tips and cabin insulation and lining.

South Africa was given full industrial partner status in the A400M programme in 2005. In return, South Africa committed to purchase eight A400Ms in a firm-and-fixed price contract worth €837 million.

Despite South Africa cancelling the contract in November, 2009, local companies, Denel Aerostructures and 32

Aerosud, have remained involved in the manufacturing of the aircraft type. “ The ag reement we signed with Armscor, South Africa, in November, 2011, draws a line under the cancelled

contract,” says Urena. “But crucially, it allows us all to move forward together to explore further opportunities, including upcoming acquisition projects led by Armscor.” ●

Denel, South Africa, will continue to work closely with Airbus Military.

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p33 Aviation Defence v1_print 13/02/2012 12:57 Page 1

AFRICAN AVIATION DEFENCE CONFERENCE & EXHIBITION Date: 16th-18th September, 2012 Venue: Johannesburg, South Africa

®

Platinum Sponsor:

Incorporating:

MRO AFRICA MILITARY AVIATION

®

MAINTAINING MILITARY & POLICE AIRCRAFT IN AFRICA KEY SUBJECTS INCLUDE ● ● ● ● ● ● ● ● ● ● ● ●

Military & Police Aircraft MRO Military & Police Flight Training Aircraft Maintenance Training Funding Fleet Modernisation Air Mission Planning & Logistics Optimising Helicopter Operations UN Relief Work & Nation-Building African Air Forces Co-operation International Joint Ventures Air Surveillance & Reconnaissance Maritime & Border Patrol Unmanned Military Aircraft in Africa

WHO SHOULD ATTEND? ●

● ● ● ● ●

African Air Forces & Police Air Wings Ministries of Defence/Governments Aircraft Maintenance Companies Aircraft & Engine Manufacturers Military Aviation Suppliers International Partners

FOR MORE INFORMATION PLEASE COMPLETE AND RETURN THIS FORM NAME (INCLUDING TITLE): POSITION: COMPANY: EMAIL: TEL:

MOBILE:

Please Send Me More Details of This ‘AFRICAN AVIATION DEFENCE’ CONFERENCE & EXHIBITION - 2012

FAX:

Please Register Me For This ‘AFRICAN AVIATION DEFENCE’ CONFERENCE & EXHIBITION - 2012

CONTACT: MR NICK FADUGBA, CEO, AFRICAN AVIATION CONFERENCES LION HOUSE: 80 EGRET CRESCENT, COLCHESTER, ESSEX, CO4 3FP, UNITED KINGDOM Telephone: +44 1206 844288 Fax: +44 1206 844299 Email: nickfadugba@africanaviation.com

p34 Airports Edit v5_print 16/02/2012 11:16 Page 34

AIRPORTS

Kenya upgrades Kisumu Airport

K

ISUMU AIRPORT, the third busiest in Kenya after Jomo Kenyatta International Airport (JKIA), Nairobi, and Moi International Airport, Mombasa, has been upgraded to international status. The redevelopment of the airport, which previously handled primarily domestic f lights, is aimed at stimulating economic growth in Kenya’s Western and Great Lakes region. The upgraded airport was officially opened in early February by President Mwai Kibaki and Prime Minister Raila Odinga, reflecting the importance attached to the project by the Government.

The upgrade was implemented by China Overseas Engineering Group Ltd (COVEC). It involved the extension of the runway from two kilometres to three kilometres, widening it from 30 metres to 45 metres, and the construction of a new taxiway, apron and terminal building that can hold up to 700 people per hour, which translates to approximately two million passengers per annum, says Engineer Stephen Gichuki, the Managing Director of Kenya Airports Authority (KAA).

Before the upgrade, the airport handled three scheduled airlines – Kenya Airways, Jet Link and Fly540 Aviation operating between Kisumu and Nairobi, Mwanza, Eldoret and Entebbe. It will now be able to serve international, regional and domestic

The expanded Kisumu Airport can handle widebody aircraft. a key plank to turn its ‘Vision 2030’ passengers and attract more airlines. economic development programme Kisumu Airport was established in the into reality. “ The socio-economic 1930s and is one of the oldest airports benefits attributed to the expansion of in the country. The terminal which has Kisumu Airport go far beyond the just been upgraded was opened in 1976. direct receipt of passengers. With the “The Government has given high completion of this project, Kisumu’s priority to the development of aviation importance has been enhanced and it infrastructure in the country because will serve as the engine of growth for of its positive impact on economic trade in the Great Lakes Region.” development,” says Amos Kimunya, KAA Chairman, Martin Nyaga Minister of Transport. “Kisumu Wambora, noted that in addition International Airport can now to Kisumu International Airport, comfortably handle larger, widebody his Board has fast-tracked the aircraft to further open up the Western development of a brand new second Kenya Region to investors in various terminal building at JKIA, which will sub-sectors of the economy. Among the have the capacity to handle 20 million key projects being undertaken are the passengers per year. The new terminal expansion and upgrading of airports will have 45 aircraft stands and a and designated airstrips to better three-storey car park accommodating serve the JKIA hub.” up to 2,000 cars.

Minister Kimunya added that the The KAA is also rehabilitating the Government had identified aviation as existing runway, taxiway and apron pavements at Moi International Airport - which were last resurfaced the South African aviation industry.” in 1992 - to ensure safe aircraft Some of the immediate tasks operations. Other on-going projects include preparing detailed operational include the construction of a new plans for the 2013 FIFA terminal building at Malindi Airport Confederations Cup, the Pope’s visit to expand lounges for passengers and for the World Youth Day in 2013 and relieve the congestion currently the 2014 FIFA World Cup. ACSA’s experienced at the airport; and the successful handling of airport construction of a new terminal responsibilities during the last World building to cope with growth at Manda Cup tournament in South Africa were Airport. In addition, the KAA is a strong factor in its winning the reconstructing the aircraft pavement Brazil airport contract. and building a new terminal at Isiolo Maseko adds: “ This is a g reat airstrip, as well as rehabilitating opportunity for ACSA as we realise pavements at Nyeri, Embu, Kakamega that in order to grow our business we and Lodwar airstrips. have to look beyond South Africa’s “ The Board is well aware that borders. In particular, we are besides the need to jealously safeguard focussing on emerging markets such as and secure our land resources, without India, Brazil and Africa. We managed which the KAA cannot fulf il its to secure an opportunity in India a few mandate in line with ‘Vision 2030’, we years ago, we now have Brazil and are face intense competition from other pursuing similar ventures in Africa. aviation players in the region, Winning the bid in Brazil will enhance especially Rwanda and Ethiopia which ACSA’s brand and better position it in are investing heavily in aviation,” says the marketplace as a serious Wambora. “We shall not rest on our participant in global airport laurels as we develop our aviation investment and management.” ● system into a hub of choice.” ●

ACSA consortium wins Brazil contract

A

IRPORTS COMPANY South Africa (ACSA), in partnership with a Brazilian company, Invepar, has won a competitive bid process for the expansion, maintenance and operation of Brazil’s busiest international airport, Guarulhos in Sao Paolo. ACSA will have a 51% share of the Guarulhos International Airport concession with Infraero having the remaining 49%.

The enterprising South African airport company will provide airport management to the concession through a technical services agreement.

Bongani Maseko, ACSA’s acting M a n a g i n g D i re c t o r, s ays : “ I n addition to the investment return on capital contributions, ACSA will be paid airport management fees. The n ex t st e p i s fo r th e c o n s o r t i u m partners to finalise the signing of the concession and other related a g reements by May, 2012. The concession is for a period of 20 years.

The investment will be ring-fenced and will therefore not be funded by 34

AFRICAN AVIATION / JANUARY-FEBRUARY 2012

p35 ATNS New Ad_print pdf 12/02/2012 21:43 Page 1

p36 Aviation Capital New Ad_print pdf 12/02/2012 21:42 Page 1