Africa Aviation: Time for genuine open skies

 Africa Passenger numbers are steadily increasing but would take off much more rapidly if an open skies agreement was actually implemented and fierce competition was allowed to drive prices down and occupancy rates up. This does not necessarily require the privatisation of existing airlines, as state-owned companies can be operated on commercial lines. Henok Teferra Shawl, the vice president for strategy and alliances at Ethiopian Airlines, says of his government: "They know that this is a company and that it has to be operated on commercial considerations. This is a very tough business, the airline business, as you know. There's very little margin for error. The competition is global, and it's fierce. It's uneven because, as you may well know, there are those who are endowed with much more capital and access to cheaper fuel."

The company insists that all managerial appointments are based on merit, rather than as a form of political patronage, while officials receive no free tickets. It has also revealed that far from being a cash cow for the government, the $110m profit that the company made in 2012-13 has been fully reinvested in its own operations. Another state-owned company, South African Airways (SAA), is eager to acquire new aircraft for its long-haul routes, even though government funding has not been guaranteed.

A company spokesperson said: "We are fully conscious of the impact the delay in acquiring the new equipment could have on our operating costs, taking into account that SAA has yet to conclude its request for proposals (RFP) on wide-body fleet procurement. In terms of our targets, the sooner we find equipment replacement, the more chances we create of reducing our operating costs." The Ministry of Public Enterprises rejected the state-owned company's original RFP in January but the airline needs to replace its older aircraft with newer models in order to reduce fuel consumption and other costs.

Most of the savings would be eaten up by the cost of leasing or buying new aircraft, although the company estimates that it would still cut its total costs by 11%. The aircraft are likely to be leased. It has been reported within South Africa that the proposal was originally rejected because of the lack of local content.

RwandAir launched a new service between Kigali and Douala International Airport in March, building on its existing operations on the continent. Douala becomes the airline's 16th destination. In the longer term, Rwanda's national flag carrier aims to expand into Europe, the Middle East and Asia.

- See more at: ABM

RELATED STORIES:

Mobiles made in Africa
Africa Aviation: Time for genuine open skies
Africa's iron ore revolution edges nearer
Outsized successes