Airlines Africa

Airlines Africa

Airlines Africa June 6, 2011

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Serving the Airline Industry and Airline Professional Across Africa

BAE Systems Asset Management Details Plans for Africa After Sale

BAE Systems recently announced an agreement to sell its commercial aircraft lease portfolio and asset management business to investment affiliates of Fortress Investment Group LLC.

The sale, which is expected to close in the third quarter of 2011, is for a cash consideration of $187 million, subject to certain post-completion adjustments. Completion is conditional, amongst other things, upon regulatory approval.

The business, known as BAE Systems Asset Management, is the world’s second largest regional jet lessor by fleet value and the tenth largest aircraft lessor by fleet size. It

has 16 lease customers in 11 countries. The business is responsible for the management of 151 commercial aircraft owned by BAE Systems, which are included within the sale, plus the management of third party owned commercial aircraft on behalf of airlines and investors.

The company has aircraft placed 35 aircraft with 11 African operators.

“It is interesting to note that there has been a significant increase in our aircraft in Africa in the last four years, particularly on the jet side, from three to 25 units,” said Nigel AJ Benson, BAE Systems - Asset Management’s Continued on Page 2

Fly540 Continues Expansion

Regional airline Fly540 has added an extra flight to Vipingo Ridge golf resort located on the North Coast of Mombasa, Kenya. This brings the number of flights by the airline to this Vipingo to four a week. Fly540 Operations Director, Nixon Ooko, said that the recently launched flight to Vipingo Ridge was due to customer demand.

“Vipingo Ridge is rapidly becoming a desirable destination for golfers, tourists, property developers and Kenyans who have invested in this estate,” he said

Flights will be operated with a 19 passenger Beech 1900. Sujal RajaHaria, Fly540’s commercial manager told Airlines Africa that the flights are operating with an averge of 15 passengers.

The airline operates flights on this route from Wilson Airport via Malindi on Monday, Wednesday, Friday and Sunday. Vipingo Ridge is the airline’s fifth destination on the Kenya coast after Mombasa, Malindi, Lamu and Ukunda, Diani.

Continued on Page 7

Join the AFRICAN AIRLINES African Airlines Association

Don’t let another minute pass without being a part of the airline community of ASSOCIATION Africa.

Whether an airline or an industrial Association des Compagnies Aériennes Africaines SITA: NBOXA8X P. O. Box 20116 Nairobi Airlines 00200 Kenya supplier, the African Association Tel: 254 20 2320144/2320148 Email: afraa@afraa.org is waiting to partner with you.

Fax: 254 20 601173 Web: www.afraa.org www.afraa.org AFRAA MEDIA BRIEF www.airlines-africa.com

Air Namibia Visits AFRAA

16TH February 2011

June 6, 2011

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Airlines Africa

BAE Systems Asset Management Continued from Page 1 director sales and marketing-Africa.

These numbers do not include some 146s which are not currently operating at present as they are in between ACMI contracts.

Alan Fraser, managing director of BAE Systems Regional Aircraft said, “We are pleased to confirm the sale of BAE Systems’ regional aircraft fleet and Asset Management business. We believe that this business will have a promising future and that we have found a buyer with the resources and expertise to support the growth of this activity.

“BAE Systems Regional Aircraft support and engineering businesses will continue to provide the full range of support to the new owner, including continuing airworthiness and engineering services. We are looking forward to continuing our close working relationship with the Asset Management business under its new ownership.”

The support and engineering activities of BAE Systems Regional

Aircraft are not included in this sale. growth over time.”

“This shouldn’t affect [our African]

When asked whether the acquisibusiness arrangements at all,” said tion transaction will affect the path Benson. “Out of the the company was on, current fleet in Africa, especially in regards only two Jetstream 41s to the African market, are lease, the other Benson said, “Over aircraft have been the last few years, we sold. On the customer have developed a two support side, we will pronged strategy for continue to work very our portfolio, particuclosely with BAE Syslarly the jets where we tems Regional Aircraft, have most availability. who have already Whilst we have been started to develop a redeveloping other gional strategy towards market applications for support. For example, the jets in addition to in Africa customer supits passenger role Nigel AJ Benson port are already

(freighters, VIP with seeking arrangements for a regional the ABJ, aerial fire-fighter, and comspares store, and they are also seekplimentary airlifter for the world’s air ing local component overhaul and reforces) we have also concentrated our pair shops in order to reduce maintemarketing efforts on the developing nance costs for African and worldwide world including Africa, South America operators.” and the Far East. Therefore, the

Peter Briger, co-chairman of strategy for placement of our existing Fortress Investment Group and head portfolio will be unaffected and in that of Fortress’s credit business, said, regard Africa and other developing “We believe that this will prove an regions remain key target markets for outstanding investment for our limited our aircraft which offer a competitive partners, and anticipate that Regional mix of performance and operating ecoAircraft’s proven business model, and nomics for airlines and other operators scalability that can support significant in such areas.”

BAE Systems African Operators 11 Operators, 35 Aircraft BAe 146/Avro RJ Air Botswana Air Libya Cronos Airlines Fair Aviation SA Airlink Jetstream 41 SA Airlink Angola Air Services MCC Aviation Jetstream 31/32 Alfa Air Global Aviation Operations Proflight Zambia Senegalair www.airlines-africa.com

Airlines Africa Airlines Africa is the definitive weekly news and information source serving the African airline and transportation community. Copyright © 2011 It is published 48 times annually by Defense House Publishing. All rights reserved. No portion of this publication may be copied, reproduced, duplicated stored or retransmitted in any form without the expressed written pemission of the publisher.

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Airlines Africa

Skylander SK-105 Well-suited for Africa and Predicts More Than Aircraft in Region

The 19 passenger Skylander SK105, by GECI Aviation, itself a division of GECI International, is designed to fill a company described void in the market.

“We saw that there was considerable potential in this CS23/FAR23 market, where there are few aircraft in service and they are aging,” said Serge Bitboul, GECI International CEO. “We decided to design a totally new aircraft with the most modern systems.”

A large part of the funds for the project have been provided by GECI International equity capital. They have have also benefited from regional development incentives, repayable advances and research tax credit, and private investments. “Various investors, such as local authorities, have

been approached to take holding in the capital of GECI Aviation, said Bitboul.

Since the introduction of the concept almost 11 years ago, the design has seen a few changes. “Today, the design of the aircraft has been completed. Aerodynamics has been optimised, the mass of the aircraft is under the target and we have started the production of the tooling, parts and sub-assemblies by the industrial selected partners,” said Bitboul. “The work done by the Sky Aircraft design department, based in Chambley, Lorraine, France, enabled us to design of an aircraft with exceptional aerodynamics and unequalled performance in its category.”

The industrial partners involved have started to manufacture the parts

Maximum range : 1,882 NM (30’ reserves) at FL 250

and sub-assemblies. The final assembly of the prototypes will begin in the second half of this year for a roll-out and a first flight in the first half of 2012.

The ground and flight tests will have duration of 12 months, for certification of the aircraft in the first half of 2013, following with first customer deliveries.

Airlines Africa asked Bitboul to describe if and why the SK-105 is suitable for the African airline environement. ”The Skylander is designed to operate as well on unpaved runways, without infrastructures, as on airports.

It has exceptional performances, in terms of maximum cruising speed, rate of climb—a synonym for safety in hemmed-in areas—range, and take-off and landing distances. With a state of Continued on Page 4

20.08 inch wide seat with 31 inch pitch Operation in high altitude terrain: up to 10,000 ft

Landing distance (19 pax): 453 meters

Economical cruising speed : 180 kts

Rate of climb: 3,000 ft/mn

Take-off distance (19 paxISA-SL): 432 meters

1.83 m tall cabin Maximum speed : 235 kts Operations on unpaved runways www.airlines-africa.com

Operations at temperatures between -40 °C and + 52 °C

June 6, 2011

Airlines Africa

Skylander SK-105 Wellsuited for Africa

Zambia Airports Upgrade Services

Continued from Page 3 the art anti corrosion treatment, the Skylander can also withstand extreme temperatures, on high altitude terrain, up to 10,000 feet.”

“It is therefore the ideal aircraft to serve isolated areas in Africa, with varied applications: transport of passengers, freight, perishable goods, medicines, evacuations for health reasons, etc,” he continued.

Sky Aircraft projects it will deliver more than 1,500 aircraft, between 2013 and 2030. More than 250 aircraft, about 25 percent of which, are intended for African operators.

The Skylander is described as a particularly versatile aircraft, capable of handling many types of assignments. Its 28 m3 cabin, the largest in its category, can hold up to 2.7 tons of cargo in bulk or on pallets, and it can be arranged in combined versions, with 12 or 14 passengers plus freight for example.

“Skylander is designed to go to places that other planes can’t reach, for example, isolated areas that have no airport infrastructure, but the SK105 is also at ease on the asphalt of airports,” said Bitboul. “It is the ideal aircraft for reaching people, allowing them to travel, to receive goods or to ship their products to the major consumption and distribution centers.”

The Skylander’s commercial portfolio currently includes more than 600 aircraft, with operators from the four corners of the world. Memoranda of understanding and letters of intent have already been signed for 14 aircraft and the company expects to announce new orders at the upcoming Paris Air Show.

Building a new aircraft is one thing, but building the support network is where the real total life cycle support system is where the cost of owenership will be won or lost. “We are developing a network that will allow www.airlines-africa.com

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Serge Bitboul the Skylander to offer the best customer support in its category. It has four main centres in Europe, Africa, the Asia/Pacific region and the Far East, a worldwide network of MRO partners, and it offers AOG work 24 hours a day, seven days a week and centralized management of spare parts available throughout the world, Bitboul assured Airlines Africa. “Each operator will receive the electronic documentation and a technical representative will help to bring the aircraft into service.”

“The Skylander also benefits from the worldwide technical support of its main suppliers such as Pratt & Whitney Canada, Sky Aircraft is committed for an excellent customers support, all over the world,” he continued.

So what are the next steps for the SK-105 from here? “We have brought together internationally-renowned subcontractors and suppliers of equipment and systems for the program,” said Bitboul. “They were won over by the quality of the design work and the programme’s sales potential: Pratt & Whitney Canada, Cobham, Hartzell, Zodiac, SEFEE, Saint-Gobain, Heggemann, Béringer, Figeac Aéro, Mazair, Lauak, etc. These companies can guarantee the high level of quality that is sought and they have the industrial capacities needed to increase the rate of production of the SK-105.”

The Lorraine final assembly line should be capable of manufacturing 50 units per year as of 2015/2016.

“When we have reached the cruising speed in 2019, annual production will be 110 aircraft.”

Zambia’s National Airports Corporation Ltd. (NACL) is embarking with SITA on a major transformation of check-in facilities at Lusaka and Livingstone international airports.

A key goal of this five-year agreement is to reduce pressure on existing infrastructure through greater automation of the check-in process and the introduction of passenger self-service check-in on the SITA AirportConnect Open platform. This will also allow for the common-use of all check-in facilities by all airlines.

Passengers and airlines at Lusaka will benefit from the deployment of the new CUTE (Common Use Terminal Equipment) services at check-in counters and will also be able to use a range of CUSS (Common Use SelfService) check-in kiosks including the compact S3 free-standing kiosk.

The upgrades happening at Livingstone will cover both check-in counters and CUSS check-in kiosks.

Automation at both locations will also extend to boarding gates, arrivals and lost baggage and other areas.

Robinson Misitala, managing director, NACL, said, “The AirportConnect platform offers a wealth of capabilities and functionality that make it an ideal fully flexible common-use airport system. It will reduce handling costs and the demand for additional airport infrastructure as passenger traffic increases while also eliminating congestion during peak periods.”

The CUSS kiosks in Zambia can also be equipped in the future with a wide variety of security devices including integration of fingerprint readers, facial recognition software, passport readers and other devices to support a registered traveller program.

Rob Watkins, SITA regional vice president, Africa, said, “SITA is very pleased to be part of the NACL’s ambitious modernization plans and to turn Lusaka and Livingstone airports into two of southern Africa’s most attractive hubs with a reputation for efficiency with hassle-free check-in.”

June 6, 2011

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Airlines Africa

More Flights to Egypt Resume as Gulf Air Resturns to the Market

Gulf Air, the national carrier of the Kingdom of Bahrain, will resume flights between Alexandria and Bahrain in time for the summer season. Effective June 9, the carrier will start flying from Bahrain to Egypt’s most popular Mediterranean beach and cultural destination, Alexandria with four flights per week to meet the summer season rush. Gulf Air flights will be operated to and from Alexandria’s new Borg Al Arab Airport.

Gulf Air area commercial manager Middle East, Yaqoob Al Hajiri said, “Alexandria has always been a popular destination for our customers, and come summer, the demand will be even higher. So we are back to this great city with four flights a week to meet the summer rush; what’s more, this time we have introduced a split schedule with morning and evening flights so that our customers can choose a flight that suits their convenience. “ Added Gulf Air Commercial Manager Egypt Mr. Ahmed Ali Ramadhan,

“Alexandria is a favourite summer destination for most Arabs for its Mediterranean climate, historic sites and beautiful beaches,” added Gulf Air commercial manager Egypt Ahmed Ali Ramadhan. It is equally popular among westerners for the same reasons. As the carrier that provides seamless and convenient onward connections from the GCC, Far East, and Indian subcontinent destinations, Gulf Air offers excellent connectivity to Alexandria via its Bahrain hub.”

Gulf Air currently operates 14 weekly flights to and from Egypt, 10 flights from the capital Cairo, and four flights from Alexandria. In addition, during this summer, Gulf Air will be launching services to three new destinations- Kabul, the capital of Afghanistan June 15, Copenhagen—its first service to Scandinavia—on July1 and Nairobi, the capital of Kenya on July 5.

A320/A321 Joint Venture for Freighter Conversions Dissolves

Airbus, EADS EFW and their Russian partners, United Aircraft Corporation (UAC) and IRKUT, have jointly decided to stop the A320/A321 passenger to freighter (P2F) conversion development program for economic reasons and, therefore, to launch the necessary legal procedures for the termination of the joint venture Airbus Freighter Conversion GmbH (AFC).

According to a press announcement, “Recent market developments, including the success of the upcoming A320neo, have resulted in more demand for A320 passenger aircraft and less for freighter versions in this aircraft category. In addition, strongly growing passenger traffic results in high demand for used A320 Family aircraft, thus reducing the amount of aircraft available for conversion.”

Against the backdrop of these market changes and the increasing pressure on the P2F business case, www.airlines-africa.com

the partners have concluded to stop and freeze the P2F program.

The joint venture Airbus Freighter Conversion GmbH (AFC) was established between EADS EFW, Airbus and the Russian companies UAC, IRKUT, in April 2007. Headquartered in Dresden, Germany, AFC was equally divided between Russia (UAC and IRKUT with 25 percent each) and EADS/Airbus (EADS EFW 32 percent, Airbus 18 percent). The partners have decided to dissolve AFC.

The collegial and professional cooperation in this joint venture over the last four years developed by Airbus/ EADS EFW, UAC and IRKUT, has strengthened the partnership between the European and the Russian aviation industry. IRKUT and Airbus will continue their partnership in components manufacturing for the single aisle program.

Ethiopian Signs 10-Year Dry Lease for 777Fs

Ethiopian Airlines has signed a ten year dry lease agreement for two brand new B777F aircraft powered by GE90 engines on May 26,2011. The aircraft were leased from GE Capital Aviation Services (GECAS), a U.S and Irish commercial aircraft financing and leasing business of GE based in Ireland. The agreement was signed by Ethiopian CEO Tewolde Gebremariam and Rayan Barrett of GECAS.

The leased B777Fs are long range modern freighter aircraft models and the first in Africa, with capacity to transport hundred plus tons of cargo at a time.

The leased aircraft will arrive from Boeing Manufacturing at Addis Ababa Bole International Airport in September and October 2012.

GECAS has a fleet of over 1,800 owned and managed aircraft with approximately 245 airlines in over 75 countries, with offices in 25 cities around the world.

Ethiopian being the first carrier in Africa to operate the B777F is committed to provide seamless scheduled and charter cargo services in line with its vision 2025.

June 6, 2011

Airlines Africa

Kenya Airways Receives Additional Aircraft and Releases Financials

Kenya Airways continues on its drive to grow and modernize its aircraft fleet size as it takes delivery of an additional Embraer airliner. Designated as KYQ, the E-190 jet touched down at JKIA airport June 1, from the Embraer factory based in Brazil. It was received by Kenya Airways technical director, Tom Kadoyo.

The aircraft is expected into service within the next two weeks and will be deployed to operate to the southern and central Africa regions. Commencing just prior to the delivery of the aircraft, Kenya Airways Group managing director Dr. Titus Naikuni noted, “We are in the final stages of securing all the necessary regulatory approv-

New ALC Leases Include Africa

Air Lease Corporation (ALC) recently signed lease agreements for 20 additional aircraft.

“The placements of these aircraft allow us to expand the global footprint of our fleet,” said Marc Baer, executive vice President of Air Lease Corporation. We continue to strengthen longstanding relationships with our airline partners along with building new affiliations for ALC.”

ALC is leasing 10 new aircraft to Alitalia: five Embraer 175s and 190LRs under 12 year leases. ALC and SriLankan Airlines have entered into lease agreements for three new A320-200s, delivered in May, October and November 2011 on 12-year leases. S7 Airlines is leasing three new A320-200s for eight years, delivering in January, February and May 2012.

ALC and Kenya Airways have entered into eight-year lease agreements for three new Embraer 190ARs scheduled for delivery in August and September 2011, and May 2012.

www.airlines-africa.com

als for the aircraft to start operating,” further noting that the aircraft will undergo some further customization by its engineers before eventually being commercially deployed.

The new long range plane joins the growing family of Embraer jets that Kenya Airways uses for its regional operations in Africa bringing the total number of the airline’s E-fleet to seven jets. This is in line with the plans to build capacity that is more efficient for its Africa market which is the core focus for the Pride of Africa.

“With our route network expansion firmly on course, the addition of a new aircraft into the fleet is quite timely,” said Naikuni. He added that the increase in capacity had been necessitated by growing regional passenger and cargo demand and a rapidly expanding route network.

The second Embraer E190 arrival will be in fulfillment of an order that the airline placed last year. The first jet was delivered in December 2010.

Three more E190 jets will be delivered within the next one year.

Naikuni said “The combination of the E170 and E190 in our network will offer greater flexibility in right-sizing the aircraft to meet route demand, using the same crew and ensuring consistent, high comfort for our passengers.”

In financial news, Kenya Airways announced a 73 percent increase in profit after tax to $40.8 billion driven by an expanded route network and increased frequencies.

Naikuni attributed the stronger performance to sustained focus on growing route network and increased number of flights to existing destinations. “We have relentlessly pushed our reach to new and promising markets regardless of the increasingly competitive business environment,” said Naikuni.

During the period under review, Kenya Airways recorded two historic milestones, by surpassing the 3 million passenger mark in the month of March

6 2011 achieving and exceeding the $1 billion mark in turnover.

Capacity measured in available seat kilometer increased by 5.8 percent to 12,854 million largely as a result of increased frequencies and new destinations launched. Passenger traffic measured in terms of revenue passenger kilometer grew by 9.3 percent over prior year due to an improved world economic climate during the first three quarters of the year. Passenger yields in U.S. cents increased by 6.7 percent and strengthened further to 10.3 percent when translated into Kenya Shillings, primarily due to a weaker Kenya Shilling in the period.

The cabin factor of 69.2 percent was higher due to the high passenger traffic compared to 66.5 percent realized in the prior year. Total passengers carried by the airline were 3,137 million compared to prior year’s 2,890 million an 8.5 percent increase.

Cargo and courier service generated a 20 percent revenue growth over previous year. Total cargo tonnage was 2.2 percent above prior year with a yield growth of 13.7 percent. Operating margin was at 6.8 percent an improvement from previous year’s 2.6 percent.

Total expenses rose by 16 percent largely caused by the weaker shilling, increased operations due to the new destinations and increase in employee cost. The increase in operating expenses was however offset by gains made from expanding the route network and frequencies.

Kenya Airways launched five new routes namely Rome, Muscat, Juba, Luanda, Nampula and re-opened Malindi during the period in review.

The airline is set to launch flights to N’djamena in Chad later this month.

This will bring to 54 the number of destinations Kenya Airways flies to.

Naikuni said that prospects for the airline especially in the African market were promising and that the company would open eight new routes in the 2011/12 financial year. “Africa is the next frontier in the global economy, ripe for high growth supported by increased trade and rise in the number of tourism arrivals,” concluded Naikuni.

June 6, 2011

Airlines Africa

Fly540 Expands Continued from Page 1

When asked about further expansion, Raja-Haria that the company planned new areas, “probably branching out more within Tanzania, where we have opened recently Julius Nyerere International Airport-Mtwara. Zambia and Zimbabwe also look very promising.

Furthermore an additional frequency into Juba where we already flying six times a week.”

Raja-Haria also mentioned that the company has 2 additional CRJs coming on line soon.

The airline commenced operations in November 2006 and now has 17 destinations in Kenya with regional services to Bujumbura, Entebbe, Dar es Salaam, Juba, Mwanza, Zanzibar and Kilimanjaro.

Egyptair Continues Expansion

EgyptAir has announced that effective June 20, 2011 it will launch new international service from Cairo to Abha, Saudi Arabia. Flying a 737/500, the flights will operate three days a week. Cairo-Abha flights will be operate Monday,Wednesday and Friday, departing from Cairo airport at 0825, arriving Abha airport at 1230. Return flights from Abha at 1330 arriving Cairo at 1535.

Later, on June 30, 2011 the carrier will increase its non-stop frequencies from Cairo to Johannesburg by operating five weekly flights except on Monday and Tuesday departing Cairo at 2330 arriving Johannesburg at 0735, depart from Johannesburg at 2145 and arriving Cairo at 0540. Service will utilize Airbus 330/200 aircraft. www.airlines-africa.com

Event

Calendar

June 12-17, 2011 Airplane Maintenance Production Planning and Control Orange, CA http://active.boeing.com/special/fleetteam/ prodplan/index.cfm June 14-15, 2011 PaxIS Forum 2011 Macau, China www.iata.org/events/Pages/paxis.aspx June 16, 2011 Airport IS Forum Macau, China www.iata.org/events/Pages/airport-is.aspx June 16, 2011 Airs@t Regional Meeting Macau, China www.iata.org/events/Pages/airs@t.aspx June 20-26, 2011 Paris Airshow Paris, France www.paris-air-show.com June 22-23, 2011 The Air Transport IT Summit Brussels, Belgium www.sita.aero/microsites/air-transport-itsummit-2011 June 23-25, 2011 128th Schedules Conference Gothenburg, Sweden www.iata.org/events/sc128/Pages/index.aspx

July 4-8, 2011 Managing Aviation Policy and Regulation Johannesburg, South Africa www.iata.org/training/courses/Pages/ tcvg26.aspx July 11-13, 2011 Aviation Outlook Africa Johannesburg, South Africa www.terrapinn.com/2011/aviationza July 18-22, 2011 Managing the Safety Oversight Function Johannesburg, South Africa www.iata.org/training/courses/Pages/ tcvg13.aspx

August 8-12, 2011 Air Mercury—Next Generation Nairobi, Kenya www.iata.org/training

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August 28-30, 2011 Aviation & Allied Business Leadership Conference Dar Es Salaam, Tanzania www.aviationbusinessjournal.aero/ conference-2011.aspx August 30 – September 2, 2011 Fatigue Rick Management Systems Symposium Montreal, Canada www.icao.int September 6-8, 2011 Air Africa www.airafricaexpo.com September 12-15, 2011 MRTD, Biometrics and Security Standards Montreal, Canada www.icao.int September 20-23, 2011 Global Air Navigation Industry Symposium Montreal, Canada www.icao.int September 28-29, 2011 Middle East and Africa Airfinance Conference Dubai, UAE www.euromoneyseminars.com/ EventDetails/0/4031/9th-Annual-Middle-Eastand-Africa-Airfinance-Conference.html October 10-14, 2011 World Passenger Symposium Singapore, Singapore www.iata.org/events/passenger-symposium/ Pages/index.aspx

October 17-21, 2011 Aging Airplane Schedule Maintenance Requirements Seattle, USA http://active.boeing.com/nosearch/svceng/ events.cfm October 24-28, 2011 Cargo Skills and Procedures Johannesburg, South Africa www.iata.org/training

June 6, 2011