Pic of The Day:
Executive Industry News You Need To Know Today
Ghana
Ghana Airports Gets Strategic Partner
The President, Nana Addo Dankwa Akufo-Addo, has granted approval to the Ministry of Aviation to engage TAV-Summa Consortium from Turkey as a strategic partner for the management of the Ghana Airports Company Limited (GACL).
The search for a strategic investor for the airport company, a move opposed by the local union of the company, started last year but was abandoned following some challenges.
The Ministry of Aviation, on March 18, this year, wrote to the President, requesting for approval to facilitate the engagement of a strategic partner for the GACL to improve service delivery and expand infrastructure at the Kotoka International Airport (KIA).
A March 24, 2020 letter in response to the request, signed by the Secretary to the President, Nana Bediatuo Asante, said: “The President has granted Executive approval for the Ministry of Aviation to facilitate the engagement of TAV-SUMMA Consortium as strategic partners to the Ghana Airports Company Limited for the improvement of service delivery and expansion of infrastructure.”
Letter to board
The Minister of Aviation, in another letter, asked the Chairman of the GACL to kick-start the process of engagement with TAV-SUMMA Consortium to pave the way for the Strategic Partnership Agreement, while ensuring “a win-win situation for both parties”.
The letter, dated June 5, this year, and copied to the acting Chief Director of the ministry and the Managing Director of the GACL, said: “It is our expectation that the strategic partnership will come along with several other benefits to the GACL and also project the image of the company on the global stage.”
TAV proposal
A proposal from TAV Airports Holdings, signed by its Deputy Chief Executive Officer, Serkan Kaptan, attentioned to the Managing Director of the GACL, Mr Yaw Kwakwa, with the sector minister on copy, outlined a number of areas to be considered.
They included corporate communications and sensitisation, corporate governance/ownership structure, human resource, capacity building, as well as financing/recapitalisation strategy.
The company also offered to look at the airline business growth in the country, infrastructure expansion, strategic management framework and legal framework and agreements.
It also indicated preliminary tasks (project initiation and proposed framework), financial/value for money audit, among many other things.
No discussions started
When contacted, the Board Chairman of the GACL, Ms Oboshie Sai-Cofie, admitted receiving the proposal but was quick to add that no discussions had started on the matter, adding: “I can assure you that no discussions have started.”
Union unhappy
The Chairman of the GACL Local Union, Mr Issaka Bamba, described the move by the government as “most unfortunate and unacceptable”.
He argued that the company was performing well, was profitable and servicing its debts, all by itself, for which reason there was no need to have a strategic partner.
“This is an international airport and it is doing well. We don’t need any strategic investor or partner,” he said.
According to him, tension was fast rising among staff on hearing snippets of the action being taken by the government, saying: “We will resist this move with all the force we can marshal and it will not be good for the image of such an international airport company, which has won many laurels as one of the best performing on the continent.”
Mr Bamba said airports such as the Kumasi, Tamale, Wa and those in other regions were not profitable, for which reason any such strategic partner should be given those facilities to turn them around, not the KIA.
List on bourse
Again, he said, if it was about injecting fresh capital, the GACL should be floated on the Ghana Stock Exchange (GSE) for Ghanaians to buy shares and own it, as was the case in other jurisdictions, adding that the KIA was a national asset that should be owned and run by citizens.
He said the company was able to borrow millions of dollars on the strength of its own balance sheet, evidence that it was profitable and able to manage its own affairs.
Mr Bamba reiterated the fact that the mood of the staff was not the best and urged the government to reverse its decision to ensure industrial harmony, particularly at a time when the COVID-19 had slowed down activities in the aviation sector.
Source: www.graphic.com.gh
Industry News
Travel post Covid 19
African aviation specialist Sukhjinder Mann takes a look at what we can expect from air travel post the current Covid 19 Pandemic.
Whilst we see domestic and regional aviation markets begin to open again the first question will be is the reopening sustainable? Will the safety measures that have been put in place, all local bespoke solutions in the main, be adequate to ensure no additional spread of the virus - only time will tell. What does disappoint me is that there is no overarching aviation body that is helping to co-ordinate the reopenings. Each country and CAA is on its own. We must as an industry learn from this.
What is clear is that the economic damage borne on the sector, not just airlines but all support businesses and environments, has been devastating and that at some stage governments and businesses have to open the lid back on reality. How that permanent reality in the new world will look is still open for debate and will no doubt be in play for many months to come.
Passengers can expect reduced services and higher fares as the internal cost of providing the core services in the aviation supply chain and ecosystems has risen markedly. Cheap air travel will be a thing of the past - atleast in the short term.
Pre and post flight Covid checks will be an additional burden on the traveller and will further add to travel and clearance times. Again, all of these checks are necessary and should be accepted by the passenger as the world has changed.
Inflight meals will become throw away snacks inorder to eliminate risk and whilst the social distancing on the flight is still an area of debate, all indications in the short term are that you will not be able to have a safe zone around you of 2 metres, this the airlines are claiming is not financially viable until fares rocket 6 fold in addition to the already inflated rates coming back into the market.
I recently took a repatriation flight from Nigeria back to the UK, it was only 6 hours in duration but I counted every second of it. There was no noise or banter that one would normally be accustomed to. It was eerily silent and everybody was wearing a serious look. I was relieved when we touched down but was again shocked when we had to stand around the baggage carousel to collect our bags, again no distancing.
As an industry person I hope everything comes back to normal very quickly, but the professional in me knows that this is aspirational and that the industry has to gradually find its way back and establish the new norm. How long that will take and what shape and form it takes at this stage nobody knows.
Source: dre aviation
Morocco
Morocco's RAM To Axe Routes, May Reduce Fleet To Secure Aid
Moroccan airline Royal Air Maroc plans to cancel some air links, cut jobs and may sell 20 aircraft to secure state aid it needs to cope with the coronavirus crisis, a source from within the company said on Friday.
A government aid package for the state-owned carrier will be revealed in the upcoming review of the 2020 budget, the source said, but it will be conditional on spending cuts. The timing of the review is not yet known.
RAM said in May it may seek a state loan guarantee to help cover expenses as it struggles with $5 million in daily losses caused by the pandemic.
It resumed domestic flights on June 25 but international air traffic in and out of Morocco remains suspended.
The government has also asked public administrations to freeze hiring for 2021 to help preserve cash and cushion the economy from the fallout from the pandemic.
Source: business.financialpost.com
By: Ahmed Eljechtimi
Nigeria
Local airlines set for operations, market new rates
Local airlines yesterday marketed new fare rates as part of the preparation for flight resumption in the COVID-19 era. Some of the operators, apparently in line with the expected hike in fares and higher cost of operations, have slightly raised fares from the average of N24, 000 for one-way one-hour flight to N30, 000, for a start.
However, central to the airlines is the new safety protocols that mandate all intending passengers to make bookings and check-in online, arrive early at the airports, submit selves for checks and screenings and properly kitted with face masks.
The Minister of Aviation, Hadi Sirika, recently announced that domestic flights would resume on July 8. Sirika also disclosed that only the Nnamdi Azikiwe International Airport, Abuja and the Murtala Muhammed Airport, Lagos would commence operations on July 8.
The Kano, Port Harcourt, Owerri, and Maiduguri airports will reopen to flights on July 11, while other airports across the country will join on July 15. All the eight operating airlines yesterday expressed readiness to hit the airspace from next week.
The Guardian observed that the opening Lagos to Abuja economy flights readily sells for N29, 189 on Arik Air. The business class sells from N89, 952 upwards. Economy return fare was from N53, 000, while business class return was pegged at N199, 867.
Air Peace airlines opened with fairly higher rate of N33, 000 on one-way economy class ticket. The business fare starts from N66, 000. The Chief Operating Officer of one of the local carriers said times were indeed different, with fresh safety hurdles for operators to comply with and attendant high cost of operations.
Aviation consultant, Chris Aligbe, expressed satisfaction with the staggered resumption programme and efforts of all operators amid higher cost of operations across the board.
Meanwhile, the House of Representatives Committee on Aviation yesterday kicked over Federal Airports Authority of Nigerian (FAAN) allegation that a local airline owed her N13 billion of unremitted revenue.
The committee has charged FAAN management to provide details of the debt profile not later than Tuesday July 7, 2020.The Committee Chairman, Nnolim Nnaji, described the revelation as a breach of trust by that airline.
The debt disclosure followed a passionate appeal made by the Managing Director of the authority, Captain Rabiu Yadudu, during an interactive session with the committee yesterday.
The lawmakers had summoned Yadudu to explain the rationale behind the 100 per cent increase in passenger service charge (PSC) announced by FAAN in preparations for the partial lifting of domestic flights across the six geopolitical zones.
The service charges were raised from one N1000 on local flight to N2000 and from $50 to $100 on international routes. The panel was convinced that the increase in PSC was inevitable based on the challenges posed by the COVID-19 pandemic for the industry. The lawmakers in a unanimous resolution invited the airline to come and defend the allegation.
Source: guardian.ng
Namibia
AirNam needs N$7 billion
THE cash-strapped national airline, Air Namibia, needs N$7 billion this financial year to survive.
This amount also takes into account an outstanding debt of over N$5 billion, which includes leaseholds.
Speaking in the National Assembly yesterday, minister of finance Iipumbu Shiimi said the N$7 billion takes into consideration the outstanding debt, and having it spent in the current financial year, as well as implementing a new business plan would be unaffordable as resources are needed for other priorities such as health, education, housing and sanitation amid the Covid-19 pandemic.
The minister clarified that Cabinet had not taken any decision to liquidate Air Namibia.
Shiimi, who is also the chairperson of the Cabinet Committee on Treasury (CCT), said they are assessing different options to restructure Air Namibia, because the current model is unsustainable and unaffordable.
“The CCT fully recognises the importance of having a national airline, and therefore it is looking at ways of finding a sustainable and affordable model for the national airline,” he said.
The minister said the CCT has consulted the airline's board and trade union representatives to get their input on restructuring the struggling airline.
“These consultations are ongoing and once concluded, a final decision will be made,” the minister said.
He assured Air Namibia staff and the public that the committee would only consider options that are in the best interest of staff, the airline and the country.
“The minister further invites every stakeholder who wishes to make a contribution to this discussion to approach me,” Shiimi said.
This comes after president Hage Geingob suggested during his state of the nation address last month that Air Namibia be liquidated.
“We have a very serious problem at Air Namibia. Firstly, Air Namibia was bailed out. Liquidation or whatever is going to be considered as one of the solutions. First stopping the Frankfurt route, some don't want that, but it must be restructured and if liquidation is the thing, we must do that. It is not making any profit, just being bailed out,” Geingob said.
The Namibian reported last week that Cabinet has asked for a detailed financial breakdown of maintaining or shutting down the airline that employs about 780 people.
Source: www.namibian.com.na
By: Charmaine
Zimbabwe
African Budget Carrier Fastjet Suspends Flights, Warns On Funds
Low-cost carrier Fastjet said it’s suspending commercial flights in South Africa and Zimbabwe due to the pandemic, jeopardising negotiations to raise emergency funds through a disposal.
The shares skidded after Fastjet said talks to sell a stake in its Zimbabwe operation are on hold until it’s clear how long extended lockdowns will last.
An investor group including Solenta Aviation Holdings Ltd. and Zimbabwean investors has expressed interest, Fastjet reiterated in a release on Friday.
Fastjet, the first discount airline spanning sub-Saharan Africa, is in a precarious situation with just enough funds to survive until the end of August.
If flights haven’t reached “sustainable levels” by the start of September, Fastjet said won’t be able to keep operating without support from Zimbabwe’s central bank.
Cash reserves at the end of June stood at $1 million.
For now, Fastjet will operate about three repatriation flights per month from South Africa to Zimbabwe. A fuller service will resume once governments in the two countries give the all clear, it said.
Shares of the low-cost carrier traded 13 percent lower as of 8:08 a.m. in London, after dropping as much as 22 percent. The company has a market value of 5.3 million pounds ($6.6 million).
By: Andrew Marc Noel
Source: iol.co.za
Brought to you by:
dre aviation
Africa's Leading Airline Consultancy
