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No. 15 Nov 2011-Jan 2012

AFRICAN AIRLINES ASSOCIATION

A F R A A ’ S PA N A F R I C A N J O U R N A L O N A I R T R A N S P O R T

ASSOCIATION DES COMPAGNIES AERIENNES AFRICAINES

Africa’s Commercial

Aviation Market

E-Commerce Fraud – Is Your Airline Online Revenue Protected?

The African Civil Aviation Policy


            

   


November 2011-January 2012

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foreword

Creating a Conducive Environment for Aviation Development

I

ATA recently published a more positive outlook for 2011: an improvement from the initial projected profit of US$4.9 billion on revenues of US$632 billion to the industry profit expectations of US$6.9 billion on revenues of US$594 billion is the new forecast. This is against a background of various challenges, chief among them the high oil prices forecast to average US$110.00 per barrel for Brent crude. African airlines are now projected to break-even, from a previous forecast loss of US$100 million. This is in spite of the growing African economies at rates of 5.5% and 5.9% in 2011 and 2012 respectively, according to the World Bank (higher than the global average of 2.5% for 2011). The meagre profit forecast for Africa is partly due to the Arab uprising in the Middle East and North Africa which has negatively affected both business and tourist travel. This will continue to depress traffic volumes and overall performance of African carriers beyond 2011. Directly and indirectly, air transport creates over 470,000 jobs across various sectors on the continent and generates billions of dollars in revenue. Therefore such a critical economic sector needs government support, not aid, to ensure that it is not put at a competitive disadvantage in the face of stiff competition. Progressive policies are key to drive strong market growth as global economic recovery stimulates passenger and freight demand for African export commodities and imports of hi-tech equipment, machinery, pharmaceutical and manufactured goods. The renewed enthusiasm and momentum in the implementation of the Yamoussoukro Decision (YD), especially with the appointment of the African Civil Aviation Commission (AFCAC) as the Executing Agency, and for the first time the ongoing development of a comprehensive aviation policy for Africa, are steps in the right direction. In addition, policies that address the over-taxation of the industry must be formulated. According to data available from International Air Transport Association (IATA), it costs 18.5 US cents per Revenue Passenger Kilometre (RPK) in Africa compared to 15 cents in Europe and 11 cents in North America. High taxes, charges and fees are an impediment to the realization of the industry’s full potential and the growth of low cost carriers. In a vast continent with poorly developed road, rail and water transportation systems, air transport if appropriately regulated and supported could fast-track the continent’s integration as well as facilitate cost-effective movement of people and goods. Speed in policy/regulatory changes is of the essence to enable the industry expand quickly to take advantage of the unfolding opportunities. Governments and regulatory authorities need to understand this drive and expeditiously eliminate restrictions to market access and cross-border investments. As we make strides in the policy front, the continent’s relatively poor safety image has to be purged. There is no doubt that the well-established regional and intercontinental operators boast of safety levels comparable to the best anywhere in the world. However, some domestic operators,

especially those operating in States where there is inadequate safety oversight capacity, continue to tarnish the continent’s safety image. It is commendable though that under the auspices of the International Civil Aviation Organisation (ICAO), African Indian Ocean (AFI) Plan and African Civil aviation Commission (AFCAC), a team of qualified and experienced safety inspectors drawn from African States has been mobilized to render assistance to capacity-challenged States in areas of certification, capacity building and oversight. We commend this move and invite all multilateral partners and stakeholders (especially the EU) to support such practical steps towards improving safety instead of regularly publishing a list of states and airlines with perceived safety deficiencies. Such a non-impartial stance has no place in the global aviation scene where the ICAO should be the only body to regulate international safety and security. In addition to tackling the policy and safety concerns from multiple fronts, African carriers will require a modernized fleet in order to compete on routes historically dominated by foreign carriers. Today, Africa represents only about 4% of the Global Western Built Passenger Jet Fleet and only about 2.2% of future orders, despite being the world’s second largest and second most populous continent, after Asia. With over one billion people in 54 countries, it accounts for about 15% of the world’s population, yet only around 10% of this population has ever travelled by air. Africa therefore represents a huge air transport potential in the 21st century. Modernizing the fleet and investing in the development of human resources will improve the competitiveness of the industry and enable airlines to tap into this vast untapped potential. There are still too many state-owned airlines on the continent and it is about time governments took a cue from the successes of the private and privatized airlines and let go their hold on national airlines. States should focus on creating the enabling environment through policies, regulations and providing the necessary safety and security oversights. We believe that the stage is set for Africa to embark upon significant growth and modernization that will transform its aviation industry as well as help fuel positive economic progress across the continent. The airline industry has a major transformational role to play especially in the area of partnerships and commercial cooperation. In a globally inter-dependent business environment, African airlines must forge mutually beneficial commercial, technical and operational relationships among themselves and between them and non-African carriers. It is only by pooling their limited resources that African airlines can realize the synergy inherent in an industry as complex as air transport.

Dr. Elijah Chingosho AFRAA Secretary General


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contents No. 15 Nov 2011-Jan 2012

AFRICAN AIRLINES ASSOCIATION

A F R A A ’ S PA N A F R I C A N J O U R N A L O N A I R T R A N S P O R T

4

19

Africa’s Commercial

Aviation Market

E-Commerce Fraud – Is Your Airline Online Revenue Protected?

The African Civil Aviation Policy

Publishers:

Rukhsana Haq

Managing Editor:

Raphael Kuuchi

Senior Designer: French Translation: Production /Advertising:

22

Camerapix Publishers International Limited

Editorial Director:

Copy Editor:

6

Roger Barnard Sam Kimani

8

Ephrem Kamanzi Azra Chaudhry (UK) Rose Judha (Kenya)

Africa Wings is published quarterly for AFRAA by Camerapix Magazines Limited. Correspondence on editorial and advertising matters may be sent to either of these addresses: Editorial and Advertising Offices: Camerapix Magazines Ltd. PO Box 45048, 00100 GPO Nairobi, Kenya Telephone: +254 (20) 4448923/4/5 Fax: +254 (20) 4448818 or 4441021 E-mail: creative@camerapix.co.ke Camerapix Magazines (UK) Limited 32 Friars Walk, Southgate, London, N14 5LP Tel: +44 (20) 8361 2942, Mobile: +44 79411 21458 E-mail: camerapixuk@btinternet.com Printed in Nairobi, Kenya. ©2012 CAMErAPIX MAGAZINES LTD All rights reserved. No part of this magazine may be reproduced by any means without permission in writing from the publisher.

4 6 10 12 16 19

The African Civil Aviation Policy (AFCAP) For a policy whose need clearly exists, here is a thumbs-up.

Africaís Commercial Aviation Market

Indeed poised for profitable expansion and modernization.

E-Commerce Fraud Is Your Airline Online Revenue Protected?

Interview with Dr. 0.B. Aliu African aviation industry, still beckons a brighter ‘morrow.

AFrAA Diary Stay abreast of AFRAA’s latest.

Airlines Prepare for Simplified Interline Settlement (SIS) Project as the Project Goes Live Acclimatizing to change, airlines get the ball rolling.

22 Aircraft Analysis – ATr 42/72 600 Series 24 News Briefs 28 List of AFrAA Secretary Generals With Air Royal Maroc being the auspicious launch customer

What’s new with African Airlines?

The African Airlines Association is now 43 years old. In the last four decades and over, AFRAA has grown in importance and relevance to the industry, thanks to their visionary leadership. The roll of Secretary Generals that have managed.


November 2011-January 2012

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A taste of the world

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The African Civil Aviation Policy (AFCAP) By Mr. Tewodros Tamrat, Director, Government, Corporate and Industry Affairs, AFRAA

1. Background

impediments to implementation of

Aviation. Air Transport is dealt under Part II

The African Union (AU) in collaboration with

numerous initiatives in Africa relating to Civil

Chapter 5 “Technical Provisions”. The issues

the African Civil Aviation Commission

Aviation, one such impediment is the lack

that the policy addresses are enumerated

(AFCAC) initiated the work of preparing a

of political commitment and a “Coherent

under 1.8.2 of the Policy Document among

comprehensive African Civil Aviation Policy

Policy Framework”.

which are; The vision and strategic objectives (1.8.2) (a) Common approach to external

document. The Policy document will therefore “provide

relations and foreign operations (1.8.2 (e).

The policy was initiated by AU/AFCAC in line

a framework and the platform for the

with the decision of the first conference of

formulation, collaboration and integration of

The policy document should address,

African Ministers of Transport held in Algiers.

national and multi-national initiatives/

inter alia, the following issues: -

programs in various aspects of Civil The first draft of the document was sent to

Aviation”

a) The vision and strategic objectives for African civil aviation

stakeholders including AFRAA for review, comments and inputs. AFRAA is also one of

It is also intended to serve as a guide for the

the members of the experts group

developments of national and regional

established by the AU to assist in the

policies thereby fostering harmonisation.

the rest of the world, particularly in safety,

preparation of the Policy Document.

The Policy is also expected to result in a

air traffic and economic statistics

b) Specific targets to bring Africa at par with

shift in focus from national to common

2. The need for a Common African Civil Aviation Policy

regional and global market and competition.

The Policy document in Article 1.8 set out the

3. Content of the Policy

various aspects of civil aviation: - safety,

justification for a continental aviation policy.

The document consists of 3 parts and 14

security, airspace management, air

The Policy is intended to address the main

Chapters covering all the major areas of Civil

transport, etc.

c) Common objectives, policy statements and strategies for the management of the


November 2011-January 2012

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d) Linkage with other socio-economic

The Task Force meeting commended the

sectors, e.g. tourism, trade, to enhance

AU for its initiative and the excellent work

demand for air transport

done by the AU/AFCAC experts group.

e) Common approach to external relations and foreign operations

The Policy document will therefore “provide a framework and the platform for the formulation, collaboration and integration of national and multi-national initiatives/programs in various aspects of Civil Aviation”

Discussing the draft, members of the Task Force also expressed overall appreciation of the draft as covering all the major areas of

f) Procedure for periodic review and

concern to the airline industry. However,

monitoring of implementation of the

they pointed out the following areas for

policies and adoption of regulations and

reconsideration;

Action plans as may be required. a) The main challenge to the policy is g) Delegation of authority from Heads of

implementation. There must be a strong

Government to conference of Ministers, AU

mechanism to ensure compliance by

commission, AFCAC as appropriate, etc

States of the policy. The draft however, does not contain such mechanism.

4. Air Transport Chapter 5 deals with Air Transport matters.

b) The draft does not address the anti-

This chapter should be of significant interest

competitive behavior of third country

to African airlines as most of its content

airlines, which is threating the African

impacts directly on the industry. The main

airline industry. The absence of

components of this chapter are;

competition regulation at regional and

States shall as much as possible inform and consult with other Member States or AFCAC where their dealing with third country may potentially adversely affect the interests of such other States.

national level has created a situation • Liberalization

where some foreign carriers abuse their

• Air Service Agreements

dominant position or exercise

• Air Transport Licensing

anticompetitive practices such as

• Competition and Consumer Protection

capacity dumping and predatory pricing.

• Aviation Tariffs and Charges

The policy should provide guidelines on preventing such behaviours. The

The rest of the chapters deal with Economic

objective of member States is to create a

Regulations of Airports and Air Navigation

level playing field for all of aviation

Services (5.8), Facilitation, Pandemics,

players to ensure a strong and

Statistics etc.

sustainable African aviation industry that is competitive in a global and liberalized

Other areas that would be of specific interest

environment. In this regard States should

to airlines are;

ensure that the competition rules they

countries and third country companies

(9.3).

whose activities may have the effect of distorting competition.

• Environment Protection (10.1)

agreements and arrangements that they enter with third countries. e) AFRAA representing the airlines which are key stakeholders should be assigned a role in the implementation and review mechanism of the policy.

activities of the State by additional

and Financing of Infrastructure (Chapter 12),

passenger charges should be

particularly 12.2 on funding of Civil Aviation

reconsidered as it will negatively impact

Authorities.

on the development of the African airline

letter addressed to Dr. Aliu the prepared the draft reflected the views of AFRAA as follows;

high cost as a result of high taxes and

The draft policy was circulated to all members

charges.

for review and comments. Subsequently the matter was also presented to the AFRAA

d) African States in their relations with third

Aeropolitical Task Force which met on 2nd

countries shall ensure that the interest of

September, 2011 in Nairobi, Kenya.

other African countries and the continent

“AFRAA believes that this document, if adopted, will provide the necessary guidance for the development of polices by States at national and regional levels to facilitate standardization, harmonization and coordination which will facilitate cooperation among

industry which is already suffering from AFRAA’s views on the AFCAP

The Secretary General in an official coordinator of the working group that

c) The proposal to fund the regulatory • Human Resource Development (Chapter 11)

Member States should file with AFCAC all bilateral or multilateral air transport

put in place adequately cover third • Airline/Operators Security Management

is taken into account. In this regard

operators on the Continent.

The need for a continental aviation policy clearly exists. The contents are all encompassing. AFRAA agrees with almost all the provisions which were well considered by yourselves”.


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Africa’s Commercial Aviation Market Poised for profitable expansion and modernisation. By Doug Winter, Head of Sales, AWAS.

A

ccording to the International Monetary Fund, over the next five years seven of the world’s 10 fastest growing economies will be in Africa. The people of Africa are rapidly turning to air travel as the best way to quickly and safely travel both within Africa as well as to major international business and tourism destinations. Direct foreign investment, growing urbanisation and rising incomes will spur higher domestic demand for consumer goods and transportation alike, fueling the need for modern passenger and dedicated freighter aircraft to maximise these significant economic opportunities.

Global Growth and Progressive Policies are keys to Drive Strong Market Growth A sustained worldwide economic recovery will stimulate blunted passenger and freight demand, both for African export commodities and for imports to Africa of high-technology equipment, machinery, pharmaceuticals, and manufactured goods. Also very important to the continent is the development of the petroleum industry in West Africa, which has been a significant driver for intra-Africa as well as international travel and freight growth. But we also must be realistic and temper


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economics

forecast upsides with the potential for conflict between countries and social unrest that shake stability and harm growth across the continent. Several trends suggest continued growth in African aviation. The continent’s passenger jet fleet now averages over 15 years of age in an era when increasing fuel costs require newer, more efficient aircraft. Newer aircraft can markedly contribute to an airline’s successful bottom line as reliability increases, maintenance costs decrease, and per seat revenue increases due to dramatically lower fuel and overall operating expenses. At the same time the current suboptimal infrastructure, difficult terrain and political instability render intra-African ground transportation problematic. The macro continental trends towards resource exploitation and tourism will require increased, modern aircraft capacity.

Operator Area

Avg Age

Africa

15

Asia

9

Australasia

10

Europe

10

Latin America

12

Middle East

11

North America

12

Unknown Area

20

Grand Total

11

Source: Ascend Online Sep 2011.

Leased Summary Share Versus the rest of the World*

Build for Forecasted Growth: the Need to Expand Airlines within Africa are evolving, from the predominance of state-run airlines to the advent of privately owned operators with business models focused upon competing with foreign operators that currently have the leading share of higher margin, intercontinental routes. Middle Eastern airlines have increased the competition for markets that traditionally have been held by European carriers, along with offering larger more modern aircraft, more departures, as well as lower fares. A very positive development from African airlines is the emergence of codeshare agreements with foreign carriers. The membership of African airlines into the three global airline alliances Star Alliance, Sky Team, and Oneworld, is also very progressive and pro-growth development.

Globally the average for Leased Passenger Aircraft is ~38%. Africa currently leases only 28% of their passenger fleet, a significant opportunity to utilise the significant benefits of leasing such as: quicker access to more modern aircraft, limited capital outlays, as well as a future hedge against technological changes. Operator Area

Total Pax Aircraft

Total on Operating Lease

% Operating Lease

Africa

819

231

28.21

Asia

4116

1609

39.09

Australasia

481

185

38.46

Europe

5272

2467

46.79

State of the Current Commercial Aviation Fleet in Africa

Latin America

1307

608

46.52

Middle East

986

307

31.14

Most of the current African fleet is single-aisle, narrow body aircraft supporting flights within the continent and between North Africa and Europe, traditionally Africa’s principal trading partner. As the demand for African commodities grows and foreign development and tourism increase, African carriers will require a modernised fleet in order to compete on routes historically dominated by foreign carriers. Today Africa represents only ~4% of the Global Western Built Passenger Jet Fleet currently in service or stored and only ~2.2% of future orders despite being the world’s second largest and second most populous continent, after Asia. With +1.0 billion people in 61 territories, it accounts for about 15% of the world’s human population representing huge raw potential for aviation growth in the 21st century.

North America

6619

1968

29.73

Unknown Area

25

0

0

Total

19625

7375

38%

Operator Area

In Service

Storage

Order

Africa

654

165

180

Grand Total 999

Asia

3925

191

2445

6562

Australasia

456

25

206

687

Europe

4912

360

1511

6783

Latin America

1133

174

516

1823

Middle East

881

105

727

1713

North America

5820

799

1998

8617

25

284

309

17781

1844

7868

27493

Unknown Area Grand Total Source: Ascend Online Sep 2011.

Africa also has the Highest Average Age for Passenger Units In Service and Storage

*Current Fleet, Western Built Jets / Total Aircraft In Service/Storage Source: Ascend Online Sep 2011.

Leasing as a Growth Tool for African Airlines As mentioned, today approximately 38% of the world’s active commercial fleet is leased, and it is estimated that that figure may grow to ~45% in 2015, and almost 48% by 2020 depending on global factors. Longer term, manufacturers such as Boeing and Airbus project that the world’s fleet will need to double by 2030 to match expected global demand, therefore the importance of leasing as a necessary tool for existing and new operators will grow even further. Leasing is growing because today’s successful airlines understand the benefits and options that this tool provides when compared to traditional ownership. Whether it’s to provide fleet flexibility, capacity optimization, financial portfolio management or a hedge against technical obsolescence leasing is a strong part of a successful operator’s growth toolbox. Customers tell us that they believe their fleets should be a balanced mix of leased and owned assets, with the percentage customized based upon each organisation’s specific business model, current requirements and future goals. Leasing has also become more popular because a myriad of post-recessionary policies have significantly restricted airlines’ access to more traditional funding sources, such as the capital markets and bank financing.


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Forming a Partnership and Understanding an Airline’s Unique Needs In order to meet the growing needs of airlines for flexible financial tools and customised solutions, lessors must adapt and offer a fuller range of global services. We talk to our customers often about their fleets, work to understand their unique operation, and develop long-term relationships so we can better meet their needs today, and anticipate their requirements for tomorrow. An example of this type of progressive relationship is when a lessor can assist a customer with fleet renewal by redeploying assets that are no longer optimal for their mission or business profile to another customer, and concurrently provide access to the right aircraft to fulfill that role. In order to accomplish this result a lessor needs to have the scale, global reach and relationships to be able to successfully shuffle or grow their portfolio to meet the needs of all parties involved.

Understanding the Aircraft is Key

the stage is set for Africa to embark upon a phase of significant growth and modernisation

Africa: The Continent for Possibilities We believe that the stage is set for Africa to embark upon a phase of significant growth and modernisation that will transform its aviation industry as well as help fuel positive economic progress across the continent. Aircraft Leasing can help both the intra-African as well as international airlines expand and drive profitable growth by offering rapid access to more modern, efficient aircraft.

New Technologies to Drive Fuel and Overall Operating Efficiencies Many global airlines have seen the future, and they have responded by ordering it. They have placed large orders for next generation technology aircraft that are promised to deliver significantly lower operating costs, maintenance, and enhanced fleet performance. The combination of next generation airframes and new engine options are critical to helping improve airlines’ operational efficiency, as well as providing significant environmental benefits versus the current global fleet. While lessors have ordered many of these next generation aircraft, sales leasebacks will also play a pivotal role in assisting operators to finance and integrate these aircraft into their fleets. Once again the ability to provide an airline customer with the scale and solutions to affect a fleet renewal program will be key, as these new aircraft move in and more mature aircraft need to be redeployed. But remember this is 2011, and many of these aircraft will not deliver for many years to come, and that is if you already have placed an order. A large number of airlines are still looking for current modern lift to upgrade and replace airframes that have become inefficient, or are deemed unsuitable for further investment due to their low book values.

Providing a flexible financing option is critical, but the ability of a lessor to understand the aircraft, providing technical expertise and consulting to an airline will become of even greater importance as fleets expand and adopt new technologies. We are often asked to partner with our customers to evaluate potential options, appraise current aircraft performance, and plan for fleet modernisation. A lessor’s ability to provide this level of valueadded service can determine the depth of relationship going-forward as well as the quality of the solutions they can deliver. We work with the airline as a seamless team to customize new aircraft for delivery, and to reconfigure and upgrade modern aircraft for its next mission. The result is a better aircraft for the customer as well as an asset that is optimised for value over its lifetime.

Doug Winter is the Head of Sales at AWAS, one of the world’s leading lessors of commercial aircraft and based in Dublin, Ireland. He has over 25 years experience in the Aviation industry between Aircraft Leasing and Lease/ Financing. Prior to joining AWAS, Doug was at GE Capital Aviation Services where he held a number of Sales leadership roles. Prior to his 13 years at GECAS, Doug spent 12 years at McDonnell Douglas Corporation. Airlines today also require aircraft that can be delivered in the near-term, and still can offer a 10-20% operational benefit versus the aircraft they replace. By having a pipeline of efficient, modern aircraft available, lessors can provide more immediate solutions to customers who may not have delivery slots for some time to come.

You can contact the author at doug.winter@awas.com AWAS Sales contact for Africa, VP Mark Elgar: mark.elgar@awas.com


feature

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AFRAA chairman awarding AIS President

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very business in the aviation value-chain makes money except airlines for the simple reason that the airline business is characterised by high costs and low margins. In 2010, airlines globally realised an average margin of 1.4% on revenue of $554 billion (the best in recent years), and IATA estimates a 0.7% margin for 2011. To improve margins, airlines strive to cut costs by employing efficiency enhancing technologies and constantly reviewing their business processes. While employees and passengers in some markets have felt the sting of cost cuts, travel agents have suffered the most revenue loss resulting from airlines adapting e-commerce technology. Since 1995, travel agents have witnessed airline ticket commissions reduced from 10% to 5% or less and more and more tickets are being sold online through airlines’ own booking engines.

Technology Adoption is Growing Fast Airlines seem to be on track to directly control the majority of ticket sales in the next couple of years, if the current trend in airline e-commerce is maintained. Carriers continue to gain more control of ticket distribution with the proportion of tickets sold via directly controlled channels increasing. According to a SITA 2011 IT Trends Survey, 72% of passengers can change their reservation online, while 65% can purchase non-air services (hotel, car, insurance) directly on airline websites. The reason for the focus on internet sales over use of travel agents is because online channels are the most cost-effective ways of reaching airline target customers and concluding a sale. Airlines

have therefore been aggressively promoting their booking sites and encouraging customers to book online by offering a portfolio of services along the travel value-chain including frequent-flyer miles, interactive seat selection, virtual check-in, printing of boarding passes and the ability to book award travel at reduced rates. Airline online ticket sales have gained popularity among many travellers and in 2010 alone accounted for over $155 billion or 28% of airline revenues. Airport kiosks and online checkin are now widely used and new alternatives such as mobile check-in, off-airport check-in and check-in by roaming devices are rapidly being adopted. The number of

passengers checking in at the airport check-in counter continues to decrease and it is anticipated that check-in counters in the future will be dedicated to non-standard check-in, staffed by agents trained to handle complex requirements. Mobile phones are set to become a significant sales channel in the future. Almost nine out of ten airlines are actively selling, or planning to sell tickets via mobile phones by 2014. 69% of airlines surveyed by SITA sell or plan to sell tickets via social media networks and 80% of airlines plan to reach passengers via social networks by 2014. As a pointer to where the industry is headed, SITA revealed that 93% of airlines plan to have Infrastructure

Virtualisation/Service implemented by 2014. Francesco Violante, SITA CEO, said: “We are now entering the era of the mobile-centric passenger, who is not only able to manage his or her journey independently but also expects personal and timely communication from airlines, airports and other providers of travel-related services. Smartphone penetration is opening up new frontiers for passenger self-service across key steps of the passenger journey from check-in to boarding. Technology on mobile devices, such as Wi-Fi and Bluetooth connectivity, can be used to improve passenger flow, alleviating areas of passenger concern such as queues at border control and security.”


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While technology efficiency gains, passenger convenience and self-service are the good news, the bad news is that laced with growing technology is online fraud and crime.

Fraud on the rise Throughout the airline industry, online fraud has been on the rise. A Deloitte UK survey taken in 2009 found that 48% of more than 50 responding global carriers said online fraud had increased in the past year, and each airline’s losses averaged more than $2.4 million annually. The general feedback from airlines is that online fraud is getting worse, and the main driver has been the Internet and, in particular, credit card type bookings. An industry poll by CyberSource, estimated airlines worldwide lost over $1.4 billion to online fraudsters in 2009: about 1.3% of airlines’ online revenue. The growing risk of online sales is a combination of the overall rise in online purchasing and the growing sophistication of those who engage in credit card fraud. Credit card abuse, particularly using a stolen card details on a website transaction is the primary type of online fraud, according to experts. Generally, fraudsters use stolen credit card information to buy a ticket for themselves, or act as a travel

agent, and buy a ticket for someone else. But criminals are also increasingly tapping into passengers’ loyalty accounts and using the miles or points for travel. Although First and Business class seats typically booked by premier passengers have been popular (both for fraudsters wanting to take a trip and those looking to sell a ticket), criminals are now booking seats in Economy class and further in advance, to make their scams harder to detect. By the time the true card owner reports the theft, the flight has usually been taken and the airline loses 100% of the revenue.

Fighting Online Fraud U.S. airlines tend to employ a high degree of automated solutions to identify fraud compared to the Middle East, Africa and Asia where airlines manually review many of their bookings. For Middle East airlines, 81% of bookings are manually reviewed, compared to 49% for Asia Pacific, 22% for Africa and just 3% of North American airlines, according to a 2010 study by CyberSource. African airlines use on average 4.7 detection tools (the least of all the regions) while the other regions use between 5.4 - 7.5 tools. The low use of online modes of payment notwithstanding, Africa in 2009 recorded the second highest online revenue loss of 1.9% after the Middle East, 2.6%. The lowest online revenue lost in that year was recorded by North America, 0.6% according to Cybersource. Survey data released by CyberSource in 2010 indicates that, the ways airlines manage fraud vary significantly by airline and by region. In 2009, airlines selling Business class, with higher-priced tickets to protect, embraced online revenue protection measures, whereas lowcost carriers tended to focus on revenue capture. On average, business airlines used the most fraud detection tools (6.5 tools per businessclass airline), had the highest rate of manual review (47%), and rejected more bookings due to suspicion of fraud (3.6%). Conversely, low-cost carriers used the least number of automated screening tools (4.9 tools per low-cost carrier), were less likely to manually review bookings (13%), and rejected fewer bookings due to suspicion of fraud (2%). The result of these differing strategies is that in 2008 business airlines lost 1.1% of their revenues to fraud while low-cost carriers, by contrast, lost 1.6%. Solutions to online fraud exist and some carriers are stepping up their efforts to fight the vice with encouraging results. They are augmenting

the staff that tracks online crimes and tapping into new technology that can help detect it. While this is being done by some airlines, there is growing concern that fraudsters are moving on to carriers whose defenses are either weak or not yet in place. Airlines have increased their prevention efforts in the last couple of years, hiring experts from the financial services industry, expanding anti-fraud teams and incorporating new computer systems that are more skillful at pinpointing suspicious transactions. Improving the efficiency of fraud management is one of the quickest cost-cutting moves airlines have at their disposal. Fraud management tactics vary widely by region, with North American-based companies relying far more heavily on detection tools; employing an average of 7.5 tools versus a European average of 5.4 and an overall world average is 5.8. North American airlines manually reviewed only 3% of their bookings whereas Middle East-based airlines manually reviewed 81%. European and Asia Pacific and African airlines manually reviewed 22%, 49% and 22% of their bookings respectively. Yet all these regions report higher incidents of online fraud than their American counterparts. The application of technology-based fraud detection tools is therefore paramount in securing online revenue. According to Dr. Akif Khan, CyberSource Head of Client and Technical Services in the UK, “These findings highlight the need for airlines to adopt a more automated, holistic approach to fraud management; from initial screening through booking review and disposition. Improving the accuracy of automated screening is important. In doing so, airlines can reduce overhead costs associated with manual review, as well as improve revenue capture and lower fraud loss. With the right tools, airlines can realize these benefits in a matter of weeks.”


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Interview with Dr. 0.B. Aliu Dr. O.B. Aliu is the representative of Nigeria on the ICAO Council, based in Montreal, Canada. An Aeronautical engineer by training, Dr. Aliu has vast experience in aviation management and over the years has contributed to the development and growth of African aviation. In this exclusive interview with Africa Wings, Dr. Aliu sheds light on a broad range of subjects touching on African aviation development.

Q1. What is the role of the African representatives on the ICAO Council and what have been their achievements to date? A1. The Council is the International Civil Aviation Organization's (ICAO)'s permanent Governing body elected by the ICAO Assembly every three years to administer the organization's activities. The Council has legislative, executive, administrative, investigative and quasi-judicial functions. It adopts Standards and Recommended Practices to regulate international civil aviation. It administers ICAO finances and submits budgets to the Assembly; it also elects the President of the Council and appoints the Secretary General of the Organization. The ICAO Council consists of 36 member States who appoint their permanent Representatives to serve on the Council. The 8 African Representatives on the Council contribute actively to the work of ICAO in collaboration with their other colleagues. They maintain liaison between ICAO and their States. They also coordinate with the African regional bodies including the African Union, the African Civil Aviation Commission (AFCAC), and with the Industry in order to articulate African position and advance the interest of African civil aviation at the global level. They also assist in ensuring implementation of ICAO Programmes and Policies within the African region thereby promoting harmonious development of international civil aviation. African Representatives have ensured that African States receive necessary technical assistance and training.

One of the major achievements is the establishment by ICAO of the Comprehensive Regional Implementation Plan for Aviation Safety in Africa also known as the AFI Plan. ICAO has also assisted with the establishment of various Cooperative Development of Operational Safety and Continuing Airworthiness Programmes (COSCAPs), the establishment of Regional Safety Oversight Organizations (RSOOs) and in the implementation of Safety Management System (SMS), the Machine Readable Travel Documents (MRTDs), the Performance Based Navigation (PBN), the Reduced Vertical Separation Minimum (RVSM) and other programmes to enhance safety security and efficiency of air transport. As the chairman of the Steering Committee for the AFI Plan. I am particularly pleased with the renewed efforts by many African States towards the enhancement of aviation safety in Africa. Q2. How can the perennial issue of braindrain of African aviation professionals be effectively addressed? A2. The shortage of skilled aviation professionals is a global challenge. Based on the projected growth of international civil aviation, the need to attract, train and retain sufficient number of qualified aviation professionals to meet the demand of a rapidly growing industry has been recognized by the International aviation community. This is the main reason that ICAO introduced its Next Generation of Aviation Professionals (NGAP) Programme.

In a situation whereby the global demand outstrips available supply of aviation professionals, there is bound to be increased mobility of professionals. This has particularly affected African airlines as African professionals migrate to regions with higher wages. It would seem that a basic solution is to continuously train more professionals and for the airlines to consider strategies such as bonding of trained experts. African Governments can also support their airlines’ efforts with introduction of enabling labour policies. The AFI Plan has also been working with African States and Stakeholders including the AFRAA to enhance training capacities and capabilities within the African region through coordination of training centers, harmonization of training programs and optimization of resources. Q3. Why hasn’t there been an African air transport policy till now? A3. The Yamoussoukro Declaration and the Yamoussoukro Decision, as well as the recently developed Guidelines for Negotiations of Air Services Agreements with Third Parties are elements of air transport policies. However, what Africa lacked was a common Civil Aviation Policy that would cover not only the air transport but also other aspects including safety, security,


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airports, air navigation, meteorology, aviation, training, and financing etc. This policy should serve as an overarching framework for harmonized development of civil aviation in Africa.

Q4. Is anything being done to develop one? A4. I am pleased to inform you that I have had the privilege and honour to coordinate the development of the African Civil Aviation Policy (AFCAP) under the auspices of the African Union Commission. The work has reached an advanced stage. In fact the final draft of the document has been circulated to member States, Regional Economic Communities (RECs) and Stakeholders for their comments. My expectation is that the AFCAP will hopefully be approved by the next meeting of African Ministers of Transport. The document covers all aspects of civil aviation as well as intermodal transports systems and linkage of civil aviation development with other economic sectors. It includes policies and strategies that, if implemented would foster the rapid and harmonious development of civil aviation in Africa. Q5. How does ICAO view the EU environmental trading scheme? A5. It is not my role to express ICAO’s views on the matter. However speaking in general, you would recall that ICAO member States at the last 37th Assembly recognized that a comprehensive approach that includes technical solutions such as the use of fuel efficient and low-carbon aircraft technology and operational techniques, efficient air traffic management and the use of alternative fuels, as well as Market-Based Measures (MBMs) is necessary to promote sustainable growth of aviation and reduce emissions. It is to be noted that Emission Trading Schemes are part of MBMs.

The Assembly also reemphasized the need for continuous ICAO leadership in addressing matters of climate change in international civil aviation and requested the ICAO Council to develop, with the support of member States, a global framework for MBMs in international aviation. The Assembly Resolution A37-19 includes several provisions and principles for the implementation of MBMs that all ICAO member States are expected to apply. In particular the Resolution urges States to engage in constructive bilateral and/or multilateral consultations and negotiations and to reach agreements with other States when designing and implementing MBMs. In addition to these ICAO provisions, African States like many other developing States as you are already aware do support the application of the United Nations Framework Convention on Climate Change (UNFCCC) principle of Common But Differentiated Responsibility (CBDR) in addressing climate change.

Q6. African airlines feel they are not given fair treatment by civil aviation authorities when it comes to market access compared to their non-African competitors. What are your views on this? A6. Many African airlines have not been able to exercise the frequencies allotted to them in the existing Bilateral Air Services Agreements (BSASAs) due to several operational constraints, including inability to secure necessary slots, as well as noise curfews and quotas at destination airports. African States have brought these challenges to the attention of the international civil aviation community at various ICAO conferences. As a result of these efforts ICAO undertook recently a review of the ICAO Template Air Services Agreement to include new provisions with regard to market access which member States may use to their advantage when concluding BASAs.

Q7. Safety is a major challenge in Africa as highlighted by the ICAO USOAP findings. What can be done to speedily help countries with significant safety concerns address identified deficiencies? A7. The ICAO AFI Plan was approved by the 36th ICAO Assembly to assist African States in addressing Safety Oversight deficiencies. Its activities are based on three focus areas namely; to enable States establish and maintain effective Safety Oversight Systems; assisting States to resolve identified deficiencies within a reasonable time; and the enhancement of safety culture of African Aviation Service Providers (AASP). In this regard, the AFI Plan has assisted the Banjul Accord Group of States in the establishment of the Banjul Accord Group Aviation Safety Oversight Organization (BAGASOO). Work is also ongoing to assist other regional bodies to establish their RSOOs. Under the AFI Plan Regional Office Safety Teams comprising ICAO safety officers within the ICAO Regional Offices in Africa are also available to provide advice to accredited States in the implementation of tailored Action Plans to eliminate deficiencies. Numerous trainings are being provided annually to African States on various aspects of safety oversight and safety managements. Many of the States have also concluded aviation safety assistance projects through the ICAO Technical Cooperation Bureau.

Of significant importance is the establishment of the AFI Cooperative Inspectorate Scheme (AFI CIS) through the ICAO AFI Plan in collaboration with AFCAC as the implementing agency. This is to assist States with significant safety concerns particularly in air operator certification. Under the Scheme qualified and experienced inspectors from African States are pooled and their services may be used upon request by the States that currently do not have inspectors to undertake their certification functions.


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The AFI CIS inspectors, when assisting a State, do their work under the direction and on behalf of the State's Director General. The Scheme also affords the opportunity to give on the job training to the national inspectors.

Q8. What is holding African States back from fully implementing the Yamoussoukro Decision? A8. The Yamoussoukro Decision was made pursuant to the Abuja Treaty and was adopted by African Heads of States. The implementation of the Yamoussoukro Decision should advance the development and growth of intra African air traffic and facilitate speedy integration in the continent. Thus all AU member States were expected to honour their commitment to implement this Decision effectively. However it is unfortunate that more than a decade after its adoption the Yamoussoukro Decision is yet to be fully implemented with the major reason being lack of political will by many States. It should also be noted that the reluctance of many of the States to grant other African airlines the traffic rights to operate as provided for in the Yamoussoukro Decision seem to be based on the ill-advised notion of protecting their national carriers from competition. Meanwhile the air transport market in Africa is dominated by nonAfrican airlines.

In this regard African airlines have a great role to play in encouraging their respective States to implement the Yamoussoukro Decision. In order to ensure mutual survival, African airlines should strive to collaborate among themselves rather than encourage protectionist tendencies.

The AFCAC as the Executing Agency for the implementation of the Yamoussoukro Decision should redouble its efforts in collaboration with the AU, the RECs, States, AFRAA and other Stakeholders to ensure the full implementation of the Yamoussoukro Decision.

Q9. Aviation infrastructure in Africa is poor in some States despite the high taxes and charges levied on operators. Where is the problem and how can it be rectified? A9. Aviation infrastructure including the airports and air navigation systems involves modern engineering technology and precision equipment to ensure safety and efficiency of aircraft operations. It is a highly capital intensive investment and requires huge financial resources for acquisition installation, maintenance and renewal. Its sustainability therefore is depended on air traffic volumes and good revenue streams. Unfortunately in many of the States the traffic is low and cannot generate enough revenue for the modernization and sustenance of the requisite aviation infrastructure. The Aviation Industry is also often not able to secure additional subvention from governments as there are other competing socio-economic priorities such as education and health. As a matter of fact many of the States actually seek to subsidize other sectors from the little revenues collected by aviation service providers. In this regard ICAO has issued policies that urge States to ensure that revenue generated from aviation is retained for aviation development. ICAO has also encouraged the establishment of autonomous agencies in order that the service providers have greater autonomy in managing their funds and in facilitating renewal of aviation infrastructure.

Many airports are now generating increasing percentages of their revenues from non-aeronautical sources. There is also room for collaboration among States for the joint provision of services. The ASECNA model involving 17 African States is an excellent example that should be explored by many regional groups in Africa.

Q10. What is your prognosis about the state of the African aviation industry by 2020? A10. Air transport will continue to play a key role in the development of trade and tourism and in the social economic integration of Africa. With its land mass, population and inadequate connectivity through other modes of transportation. Africa has great potentials for the growth of air transport. The industry is expected to continue to grow at over 5% annually. However while it is apparent that the African aviation industry is currently facing numerous challenges I believe these challenges are surmountable if we all collaborate and work together. This requires concerted efforts by the States and Industry Stakeholders. States need to implement enabling policies to foster the development of the industry, and the industry operators need to collaborate among themselves to increase their share of the African air transport market.

I am happy that over the past few years there is increasing recognition being given to civil aviation as a vehicle for economic development and that there is a renewed commitment of States and industry to work together to develop the industry. So I am very hopeful for a brighter future for the African aviation industry.


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Afraa Diary PHOTOS courtesy of AFRAA.

AFRAA Holds Third Joint Fuel Purchase Project Meeting

Photo:File.

The third meeting of the AFRAA Joint Fuel Purchase Committee was held on 27 September 2011, at the AFRAA headquarters in Nairobi, Kenya. Nine airlines were represented. The Chairman, Eng. Chris Oanda of Kenya Airways observed that fuel continues to be a key cost component in the cost structure of all the airlines. He further noted that the CEOs and MDs had taken serious note of AFRAA’s initiative to add value to its members by coming up with projects such as this joint fuel purchase project. The Chairman observed that such an initiative stood to benefit African carriers even more than other international carriers due to their unique challenges. He pointed out that the Arab carriers had found it necessary to purchase fuel jointly, yet they have the advantage of operating in oil producing regions. Ms. Mirna Khalil, Fuel Manager of the Arab Air Carriers Organization (AACO) Joint Fuel Purchase Project shared AACO’s experiences and challenges on the project. Ms. Mirna provided the Committee with useful insights on how to set up and run a joint fuel project. The Secretary General of AFRAA, Dr. Elijah Chingosho acknowledged that the level of representation by the different airlines reflect the importance attached to this meeting. The meeting ended on a high note with the Committee positive about the success of the project. The airlines that attended the meeting were Kenya Airways, Ethiopian Airlines, LAM Mozambique, Air Mauritius, Air Malawi, Air Namibia, PrecisionAir, RwandAir and TAAG Angola Airlines.

Participants who attended the Joint Fuel Purchase meeting in Nairobi.

AFRAA Secretary General at TAAG Angola Airlines The Secretary General of AFRAA, Dr. Elijah Chingosho, paid a visit to TAAG Angola Airlines from 15-16 August, 2011. During the visit, he witnessed the huge strides that TAAG Angola Airlines have made in the recent years, under the visionary leadership of its energetic, knowledgeable and experienced Chairman, Dr. Antonio Luis Pimentel Araújo. Some of the critical milestones achieved by the airline include the following: • In 2009, recertification by the countrys Civil Aviation Authority, INAVIC and IATA Operation Safety Audit (IOSA) registration, reactivation of IATA membership and TAAG received permission by the EU to fly to Lisbon with its Boeing 777-200 ER. • In 2010, a new Board was appointed to continue TAAG’s path to excellence. The airline started Extended Range Twin Engine Operations ETOPS Operation with Boeing 777. • Modernization of its long haul fleet (phase out of the B747-300 Combi, arrival of the new B777-300 ER) and the introduction of an additional route to Europe, namely to Oporto in 2011. In turning around the airline, TAAG‘s executive management team adopted a new management philosophy, focused on safe operations and professional, responsible working behaviour. Among other things, the airline is developing and maintaining the Quality Management System and the Security Management System whilst fostering change management, training and continuous improvement.

The 43rd African Airlines Association (AFRAA) Annual General Assembly and conference will be held in Marrakech, Kingdom of Morocco from 20 - 22 November 2011, at the invitation of Royal Air Maroc. The theme of the AGA is, 'Harnessing Growth Opportunities Together'. In addition to statutory issues to be discussed by the Assembly, there will be a high level CEO’s Forum that will debate topical industry issues and chart strategies for the future. The conference will also feature panel discussions and special presentations by renowned experts, consultants and airline CEOs. There will be an exhibition of some of the latest technology applications and products in the industry.

Photo:File.

Royal Air Maroc Hosts AFRAA 43RD AGA


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African Airlines Route Network Coordination Efforts by the African Airlines Association (AFRAA) to encourage airline cooperation through coordination and harmonization of their route networks received a major boost with Sabre Airline Solutions offering to provide consultancy assistance to AFRAA and its members. This was the outcome of a meeting between the Secretary General of AFRAA, Dr. Elijah Chingosho and the Sabre Airline Solutions Vice President and General Manager for Middle East and Africa, Mr. Maher Koubaa at the AFRAA Headquarters in Nairobi recently. Following the meeting and commitment of Sabre Airline Solutions to support the project, a technical evaluation and analysis of the networks of African operators will be done by Sabre following which a framework agreement will be signed by the parties. Preliminary assessment of the route networks operated by African airlines indicates substantial benefits could be derived through harmonization and realignment. The benefits will include increased passenger numbers, better utilization of aircraft, increased revenue, improved connectivity, shorter transit times at airports as well as reduced costs on transit passengers’ accommodation. With experience in network harmonization and coordination in the Middle East and Latin America, Sabre Airlines Solutions hope to assist African airlines improve performance and better their commercial cooperation. Sabre and AFRAA team at the AFRAA Headquarters. From L-R: Mr. Tamrat, Ms.Amilia, Dr. Chingosho, Mr. Kombaa and Mr, Kuuchi

African Aviation Suppliers’ Convention The African Airlines Association is planning to stage the first African Aviation Suppliers’ Convention from 7 - 9 March 2012 in Nairobi. The conference will bring together aviation companies on the continent and manufacturers, suppliers, vendors and distributors of aviation products and services under one roof to network and discuss business. There will be presentations and panel discussions on issues pertaining to relationship management, financing, inventory management as well as one-to-one meetings between aviation companies and suppliers to discuss specific issues of interest. According to AFRAA, the objectives of the conference and exhibition will be to develop a sustainable aviation business support-base on the continent, garner synergy among sector players, facilitate networking, share industry best practices on emerging technologies as well as avail choice to aviation companies in Africa. The conference and exhibition aims to attract airlines, airports, ground handlers, Air Traffic and Navigation Services Providers and Civil Aviation Authorities on one hand and aircraft/engine and component manufacturers, suppliers of Information and Communication Technology (ICT) products, handling equipment and safety products, lessors, financiers, MROs, training organisations and Global Distribution Systems (GDSs) and aviation data business on the other. Commenting on the event, the Secretary General of AFRAA, Dr. Elijah Chingosho said, “It will provide opportunities for networking, direct sales and oneto-one discussion on an important aspect of every

AFRAA Meets AACO As a follow-up to a visit in December 2010 to the headquarters of AFRAA in Nairobi to explore areas of mutual cooperation, the Secretary General of AFRAA, accompanied by the Commercial Director and Manager, Corporate Finance and administration, visited AACO in Beirut, Lebanon on 23 September 2011. During the visit, the Secretary General of AACO, Mr. Abdul Wahab Teffaha, shared AACO’s success stories with the AFRAA delegation. The two Associations discussed a number of areas of collaboration and agreed to liaise closely and adopt common positions on industry issues affecting the interest of airlines in the two regions. AACO accepted a request by AFRAA to send their Fuel Manager, Ms. Mirna Khalil, to Nairobi to technically advise the AFRAA Joint Fuel Purchase Steering Committee at a meeting held on 27 September at the AFRAA headquarters. The two bodies pledged their support to the industry and to work for the common interest of their members.

aviation company‘s business that has hitherto not had such a forum.” The Suppliers’ conference is being organized by AFRAA in partnership with Events Management Solutions (EMS), a Kenyan-based conference management company. For more information on this event, please contact AFRAA through the following email: mkahonge@afraa.org

AFRAA Aero-political Task Force Holds First Meeting The AFRAA Aero-Political and Regulatory Task Force held its first meeting at the AFRAA headquarters, Nairobi, Kenya on 2 September, 2011. The meeting was attended by Ethiopian Airlines, Kenya Airways, EgyptAir, LAM Mozambique Airlines, South African Airways and Precision Air. Among other things, the team discussed the EU List of Banned Airlines (Blacklist) and recommended that AFRAA facilitate assistance by member airlines that


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Aviation and Allied Business Leadership Conference, held in Dar es Salaam

Members of the Aero-Political Taskforce at the AFRAA Headquaters in Nairobi.

Photo:File.

have the capacity to assist others – both members and non-members – to enable them achieve IOSA Certification. In addition, AFRAA would continue to put political pressure on African States to take their safety oversight obligation seriously and meet international standards. The team recommended that AFRAA through the African Union (AU) /African Civil Aviation Commission (AFCAC) and other appropriate forum should continue to expose the political and economic objective of the EU banning list and its negative impact on African carriers. With regards to Global and Regional Liberalization, the Task Force proposed that the major African carriers and their Governments should take the lead in the implementation of Yamoussoukro Decision (YD). AFRAA was urged to relaunch the Club of the Ready and Willing States (CREW) to jump start the process of implementation. The Committee reviewed a draft Airline Service Commitment Agreement proposed by the Secretariat and agreed to develop it further with input from other members of AFRAA. The Task Force agreed to include high taxes and charges, particularly in Africa, in its work programme and recommended that focus should be directed to collecting and analyzing data related to taxes and charges in Africa.

Embraer Airline Business Seminar The Brazil headquartered regional aircraft manufacturer, Embraer, sponsored the first Airline Business Seminar in Africa from 19-21 July 2011 in Nairobi. The event was attended by airlines, leasing companies and air transport experts and was facilitated by resource people from the industry, academia and Embraer. The seminar took a holistic view of air transport in Africa and reviewed the economic trends and drivers, connectivity, market outlook, planning for success and demand/capacity matching. Practical experiences were shared with delegates by the MD and CEO of Kenya Airways, Dr. Titus Naikuni, the Secretary General of AFRAA, Dr. Elijah Chingosho and a Director from Azul Airlines (a successful new airline in Brazil). At the conclusion of the seminar, Mr. Mathieu Duquesnoy, Embraer Vice President Middle East and Africa reaffirmed the manufacturer’s confidence in the African market and pledged to support their customers and the industry on the continent through its partnership with AFRAA. Embraer is looking at consolidating and growing its business portfolio in Africa and to supporting the operations of its aircraft. This move is consistent with the rapid adoption of the E-Jets by many African airlines and the role the Embraer 30-120 seater range of aircraft can play in effectively serving the growing intra-African markets. Mr. Mathieu Duquesnoy, Embraer VP for airline markets in the Middle East and Africa says, “We are analyzing what should be the best penetration of customer support, both in terms of training and spares support.” The company has already committed to placing a spares facility in the Middle East that would also cover Africa, but more may be needed. Though no decision has been made, one potential location for a spares facility may be Kenya, where Embraer’s ties are expanding with Kenya Airways now operating eight E-Jets. Other African E-Jet operators are LAM Mozambique, Air Nigeria and EgyptAir. South African Airways has ordered two 170 regional jets, although delivery dates are not yet confirmed. Source: aviationweek.

Aviation and Allied Business Journal held its 17th Annual Leadership Conference in Dar es Salaam, Tanzania under the theme, “Fostering Africa’s economic development thorough air transport”. The conference was opened by the President of Tanzania, His Excellency Mr. Jakaya Kikwete. Among the attendees, were Ministers from seven African States as well as representatives from civil aviation authorities, airports, airlines, service providers and ground handling companies. AFRAA Secretary General, Dr. Elijah Chingosho, delivered a speech at the opening session highlighting the need for the full implementation of the Yamoussoukro Decision (YD), reduction of taxes and charges on passengers and fuel, removal/elimination of monopoly ground handling companies, urging States to register their opposition to the EU Emissions Trading System (EU-ETS), the EU blacklist whilst also urging States to take their safety oversight responsibilities seriously. The AFRAA Commercial Director, Mr.Raphael Kuuchi moderated a panel discussion on 'Rethinking the Yamoussoukro Decision.' At the conclusion of the interactive discussions that saw divergent views on the intra-African liberalization, the conference agreed to set up a three-man high level panel of ministers to provide the needed impetus to the implementation of the Decision and unlock any difficulties impeding the process. The team is made up of ministers of transport from Tanzania, Ghana and Uganda. They will facilitate the work of AFCAC (Executing Agency) in the YD implementation process. The conference deliberated on a wide range of industry issues including finding ways to ensure the full implementation of the YD, improving safety on the continent, airline financing, airports and infrastructure and embracing the latest ICT technologies. Ethiopian Airlines and Precision Air shared their success stories with regard to the HR development, leadership and corporate governance.


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Airlines Prepare for Simplified Interline Settlement (SIS) Project as the Project Goes Live by Juliet Indetie, AFRAA Corporate Finance and Administration Manager.

S

implified Interline Settlement (SIS) is a major project which will have an impact on all the ICH members once fully implemented. SIS has been viewed not just as an IT project but also a business re-engineering process which will provide African Airlines with the opportunity to review their systems and undertake significant changes in order to derive the maximum benefits of this industry change.

c)

The Overview of the Project The Simplified Interline Settlement (SIS) project aims to simplify interline billing, and removes paper from the entire process, delivering tangible financial benefits to the industry. The Clearing House intends to take advantage of today's all-data world through SIS by eliminating paper from the clearance process through the ICH Web. The Integrated Settlement (IS) solution will among other benefits, not just eliminate paper and simplify the entire process to allow for more effective exchange of transaction information between billing entities and their interline partners. An additional anticipated benefit is that the SIS Project will enable revenue accounting and interline settlement to be simpler, cheaper and paperless.

What are Some of the Expected Benefits of the Project? a)

b)

Elimination of data entry as the internal IS processes will then create the invoice and settlement file from the billing data, ensuring that the billed carrier will not need to reconcile incoming data. This will result in reduction in billing and rejection timelines and decentralization of ICH submissions will be possible. The central file repository will store documents for as long as they are needed for operational reasons and carriers will be able to request longerterm storage. This will be beneficial especially with rejections as the rejecting carrier will not need to

re-upload any received documents since the new rejection memo will be referenced to the old referenced supporting documents. Detailed reports and processing dashboard will be available in SIS with value determination and auto billing. Cost savings due to elimination of paper and better cash follows due to a faster rejections process. Today, a carrier may wait up for up to one month between receiving the electronic data files and the paper invoice and supporting documents. Not being migrated will be very costly as Airlines would not be able to collect their revenues if out of the clearing house.

As airlines prepare to migrate to SIS, the necessary framework should be put in place: 1)

2)

3)

AFRAA Corporate, Finanace and Administration Manager Mrs. Indetie, receives Cetificate of Appreciation from IATA

Making a business case to Management The new system comes with cost implications which require both planning and budgeting. Airlines with revenue accounting systems which cannot support SIS would need to either up-grade or source for a new system. E-Invoicing Ensuring legal compliance will be a challenge in some countries as e-invoicing means that all invoices and supporting documents will be electronically captured. Some countries have differing laws regarding e-invoicing. However there will be optional services such as digital signature which will address some of the legal requirements in what constitutes a legal invoice. System and business changes Airlines need to plan the migration process to be in line with the migration process of their interline partners especially to ensure that there will be no disruption with the interline partners who may migrate early. As per IATA, the SIS project met its target global go-live date of SEPT 2011, having followed the following stages:

Pilot Testing

Sep 2011 PAX and MISC

SIS Development

Release of Participation Dociments

Apr 2012 Cargo and UATP

2008 - 2010

Coming Up

SIS G0-live Dates


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Below is the time line which airlines need to be aware of to ensure adequate planning: 2011 2012 SEPT DEC MAR SEP 3 Months 3 Months 6 Months 7 Months

2013 APR

Go Live No More Paper Must Bill IDEC Mandate Via IS Discontinued Source: IATA The ICH is key to many Airlines as it goes to the heart of the airlines’ revenue collection abilities. SIS is mandated and after April 2013, all Airlines must have migrated or they will not be able to get payment via the Clearing house. Airlines can migrate in stages but all the migration must be complete by April 2013. After this date anything not submitted via IS will not be cleared via the ICH. Airlines need to start preparing for changes especially African airlines who also face unique challenges such as power, and internet interruptions. AFRAA’s Role Airlines need to start preparing for changes, especially African airlines who also face unique challenges such as power, and Internet interruptions. AFRAA hosted the first SIS workshop in May 2010 in Africa which was facilitated by IATA and the workshop attracted a large number of delegates. During the workshop, it was evident that many African Carriers were not on track for the implementation which raised a great deal of concern. there were no airlines in the Africa region which were involved in the pilot testing and this was attributed to logistical and financial limitations. Based on the lack of representation at the pilot testing and planning stages, AFRAA sought to work closely with IATA to ensure that the interests of its members were adequately addressed. AFRAAs role in supporting the implementation of SIS project of assisting Airlines with knowledge and capacity building was recognised by IATA.

AFRAA, together with IATA SIS project team, hosted the Africa SIS Awareness Workshop in Nairobi from the 10th to 12th May 2011. The workshop was facilitated by experts from IATA. The well-attended workshop attracted a total of 70 delegates from 25 Airlines including 15 AFRAA members. Two AFRAA partners, Hahn Air and Travel Port together with AFRAA sponsored the workshop which was at Panari hotel, Nairobi, Kenya. The workshop was officially opened by the Secretary General of AFRAA, Dr Elijah Chingosho who emphasized the need for African airlines to adapt modern cost effective technology in order to remain competitive and relevant. He reassured the airlines that AFRAA would continue to provide all the necessary support and work closely with IATA for the betterment of the industry in Africa. As in the E-ticketing project, AFRAA is committed to assisting its members to ensure that they are SIS compliant within the stipulated time frame. During the 45th Revenue Accounting Meeting held from the 13th to 15th September 2011 in Miami, KQ was recognized as one of the 19 Airlines that are now certified to go live on the SIS project which is a commendable achievement and hopefully other African Airlines will receive the certification. AFRAA was recognized for its role in creating awareness and training for its members and Mrs. Juliet Indetie, Manager Corporate Finance and Administration received a certificate of appreciation.

Challenges Expected by African Carriers •

SIS is a major project which will have an impact on all the ICH members, once the project is implemented. All members will have to upgrade their systems and there are notable system changes especially in miscellaneous billings.

In some countries the law doesn’t recognize e-invoicing and airlines will have to find solutions within their existing laws and working with the relevant government departments as the proposed law may have requirements e.g. encryption and digital signatures.

First and Final Carriers will need to prorate switching, and for the nonFirst and Final carrier prorates are costly. Changes in First and Final Passenger billings will have system implications. Change of rejection billing to total amounts may impact accounting entries.

The Migration process would prove to be quite a challenge especially for carriers whose interline partners will opt for the early migration. The carriers will have to forge a working relationship as they prepare to migrate.


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Way Forward Step 1 •

Ensure that all teams are aware of the changes to billing rules and processes including Finance department.

The project team should have the IS Participation Guide from the SIS website.

Ensure that the invoicing units are on board.

Ensure that the airline is signed up, profile data is correct, and staff have log-on IDs and training before IS goes live.

Step 2 •

Signing the IS Participation Agreement where the same terms apply to all participants in order to ensure equal access, rights, and responsibilities, with IATA acting in its role as the industry’s trade association providing critical services to its members at minimum cost. The IS Participation agreement is not subject to negotiations or variations.

To participate in SIS, the primary requirement is to sign the IS Participation Agreement itself and Attachment B if any additional services are also to be used (such as digital signatures).

Sandbox: Upon signing the participation agreement, you have access to the Sandbox where you are able to carry out file testing and to SIS for set-up of your member profile and legal location data.

Conclusion The Aviation industry is being driven by the major carriers that have developed systems and are not struggling with simple infrastructure problems. Unfortunately, the pace will not be slowed down for the African carriers to 'catch their breath!' African airlines need to develop their human capacity if they are to keep up with the technological advances that is facing the aviation industry. African airlines should also consider engaging before the forums and strategise on how to present some of their issues. It is normally very clear that the major international carriers agree on most of the issues and support each other during forums. African airlines need to look for regional solutions such as joint projects and develop capacity. Experience has shown that most of the African carriers wait to adopt changes at the last minute as opposed to being proactive, maybe it is time to change this mind set.


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Aircraft Analysis – ATr 42/72 600 Series

By Keith Mwanalushi

B

customer of a new

Algerie. The -500 variants will still

aircraft can provide an

be produced concurrently with

air carrier with a number of

the newer -600s until 2013. ATR

advantages; this can be a

has hinted that 2014 will see the

significant contribution to the

termination of the -500

design process, or possibly

production run. However, the

secure a good deal on the unit

manufacturer does not want to

price of the aircraft- not to

rule out -500 orders too quickly,

mention the enormous

in case a -500 customer would

publicity opportunity involved.

want to keep fleet homogeneity.

eing the launch

The most noticeable upgrade

As the international media converged on the 2011 Paris air

ATR CEO Filippo Bagnato (right) hands over keys to a new ATR72-600 to Mr. Driss Benhima president of RAM.

show, it became evident that

on the -600s is an enhanced cockpit equipped with upgraded avionics instrumentation. This

attention quickly turned to a

includes the latest navigation,

shiny new ATR72-600 painted

economical and exploitation

The design philosophy for the

in the livery of its launch

studies, the ATR-600 series

new ATRs supposedly addresses

recording, autopilot and

customer Royal Air Maroc

proved to be the right choice for

the adversity. The high wing

communications.. The

(RAM). The European

us.”

provides an obvious advantage –

introduction of a glass cockpit

turboprop manufacturer used the Paris platform to debut its latest product which it claims is

it shields the engines from sand

comes with a completely new

operated exclusively by regional

erosion. On some jets with a low

avionics suite.

subsidiary RAM Express. The

wing, sand can cause problems

The new ATRs will be

now the most advanced

aircraft are configured with 48

turboprop in its class.

and 70 seats for the - 42 and

including premature engine wear. The ATR72-600 obtained

The rationale behind the commissioning of the new cockpit according to ATR was to

-72s respectively. “We are using

European Aviation Safety

provide the crew with the most

ATR42/72-600 programme in

the new ATRs to provide new air

Agency (EASA) certification in

realistic picture of the in-flight

2007 as a progression from

connectivity to the regions,

May 2011, a prerequisite for its

situation, while evolving to cater

the -500 series. In 2009, RAM

enabling them to reinforce their

entry into service. The smaller

for the latest navigation and

signed an order worth more

appeal and helping to promote

ATR42-600 is due for

communications techniques that

than $125m for two ATR42-

inland tourism,” said Mr.

certification by the year end with

will come over the next decade.

600s and four ATR72-600s

Benhima.

service entry expected in 2012.

ATR launched the

with options for two additional 72-600s. In justifying the reasons

The new avionics replace the

The list price for a new 72-600 is

Electronic Flight Instrument

the climatic conditions in North

$22.7m, which is $800,000 more

System (EFIS) with five large liquid crystal displays that comprise of

A critical factor worth noting is Africa. Operations in desert or

than its predecessor, the 72-500.

behind the ATR purchase, Mr.

near desert conditions can be a

The 42-600 sells for $18.9m,

two primary flight displays, two

Driss Benhima, president of

problem for an airline, having to

again $800,000 more than the

multi-function displays and one

RAM, said the new ATR

take into consideration adverse

-500 version.

engine and warning display. The -600s will be capable of Category

derivatives had the most ideal

factors such as extreme

operational attributes for its

temperatures and sand.

upon the improvements of the

IIIA approach, (landing with a

operations. “We decided to

Turboprops that are able to

current -500 series, which has

decision height of 50 feet) and

launch a call for new turboprop

produce an optimal performance

proved popular with a number of

Required Navigation Procedure

aircraft and according to the

in such hot conditions have an

African carriers such as Air

(RNP) capabilities. The new

results of our technical,

operational advantage.

Botswana, Precision Air and Air

avionics are also compatible with

ATR say the -600s have built


November 2011-January 2012

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feature the much anticipated Auto

also faces home-grown LCC

Dependant Surveillance –

competition in the form Air

Broadcast (ADS-B) technology.

Arabia Maroc a cross- border joint venture formed by Air

All the main improvements – according to ATR, will provide

Arabia and Moroccan investors

advantages and performance

in 2009 which first flew in May-

improvements in terms of

2009 as well as Jet4you, the

weight reduction, reliability,

country's first private LCC, which

energy consumption and

commenced service in February

durability. The new avionics

2006.

suite is developed by Thales

"We cannot get rid of this

Avionics. Within the framework

competition,” affirmed Benhima.

of this contract, Thales

“We have to face it. We will

developed a flight deck that

reinforce our position as a legacy

would considerably simplify

carrier and develop our hub

work for pilots. Furthermore,

network from Casablanca."

the ATR-600s are the first regional aircraft to feature an

However, it seems that reinforcing A new glass cockpit comes with a completely new avionics suite.

the carrier’s position might be

Avionics Full Duplex Switched (APU) –a mini engine usually at

bins, LED lighting and optional

the rear of an aircraft used to

three-abreast premium class

simplicity is the Electronic

generate power while on the

configuration with forward

Flight Bag (EFB). It is a touch-

ground. Instead, the ATRs are

passenger door. ATR indicates

screen display that is readable

equipped with a propeller

that its engineers found a good

in all light conditions and it is

brake, commonly known as

trade-off between bin volume

used for the management of

“Hotel Mode” by pilots. The

and headroom.

in-flight and ground

system stops the propeller on

information. EFB effectively

one engine, allowing the

ATR recorded 145 firm orders and

eliminates flight deck paper by

turbine to run and provide air

72 options since the beginning

providing automated take-off

and power to the aircraft

of the year. The company claims

and landing calculations.

without the propeller spinning.

to have gained 80% share of this

Ethernet (AFDX) network. An example of the drive for

The -600 series is the

The Hotel Mode function

By the end of September 2011,

year’s regional aircraft market.

tougher than expected. The recent political issues in the region and terrorist attacks in the country have reduced crucial tourist arrivals. The drop in passenger numbers came amid proposed job cuts as the airline admitted to continuing losses. Some analysts project losses of around $100m for this financial year. The staff cuts could equate to more than a quarter of the entire workforce. At the time

launch platform for the Pratt &

provides all the facilities and

The value of these orders is

Whitney PW127 M engine. It is

benefits of an APU without the

estimated at $4.8bn including

the enhanced version of the

cost of the added weight. ATR

options. The ATR backlog is now

PW127 engine family already

calculations indicate that a

at 275 aircraft valued at $6.2bn

installed on the -500s. The

typical airline operation can

and represents nearly four years

engine upgrade supplies, on

save about $24,000 per

of production.

demand, 5% higher

aircraft annually by using a

thermodynamic power for

propeller brake rather than an

ATR 600s graphically illustrates

operations in hot and high

APU; based on weight,

continuing investment by RAM

that RAM would be selling some

airports. ATR now offers the

acquisition costs, fuel

as it works to compete in a

of its non-aviation assets to

new engines on any ATR

consumption and

liberalised market. In an attempt

fund the cost of the

42-500 or 72-500 that rolls off

maintenance.

to boost tourist arrivals by 1

redundancy settlements.

its assembly lines. The PW127

One of the challenges was

The acquisition of the new

million a year, Morocco initiated

of the announcement Mr. Benhima said that the redundancies were designed to “turn around and develop the company,” which has been in a “critical situation” since the start of the global downturn. He said

By replacing older aircraft with

M also improves the ATRs’

improving the interior design;

an open skies agreement with

new ATRs and B787s on order,

one-engine-out ceiling by

the current -500 series has

the EU in 2006. Local analysts

this should reduce RAM’s

about 1,000 feet. On the

already been developed with a

quickly expressed concerns

operating costs. The airline also

-600s, the extra power will

number of nifty features and is

about the impact of increased

has several 737-800s on order,

help raise payload weights to

recognised for low interior

competition on RAM, especially

allowing the airline to retire its

address the demands of

noise and vibration. ATR and

from the Low Cost Carriers (LCC).

ageing 767s, 737-400s and

increasing passenger and

Italian design firm Giugiaro

baggage size.

The Centre for Aviation CAPA

–500s. The airline has officially

developed the new Armonia

shows that the LCC market in

announced that it will reduce its

An interesting feature of

cabin for the -600s. It features

Morocco doubled in the first year

fleet size due to its financial

ATRs is that they are not fitted

ergonomic and weight saving

of open skies from 10.9% in

situation with some aircraft

with an Auxiliary Power Unit

seats, 30% wider overhead

2006 to 22.9% in 2007.

heading for storage.

RAM


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News Briefs

New Appointments The following are newly appointed CEOs of some African Airlines: • Mr. Bram Stellar has been appointed new CEO of Air Seychelles. He took over from Mr. Maurice LoustauLalanne who was the Executive Chairman but remains the Chairman of the Board of Directors of Air Seychelles.

• Mrs. Maureen Dlamini, replaced Mr. Wilfred L. Amstelveen as the new CEO of Zambezi Airlines.

Photo: Lufthansa Consulting.

Congo Launches ECAir with the Assistance of Lufthansa Consulting Equatorial Congo Airlines (ECAir), the new national flag carrier of the Republic of Congo, entered into service on 24 September 2011 with its premiere flight between the country’s capital Brazzaville and the port city of Pointe Noire. Lufthansa Consulting managed the complete start-up process. In previous projects, Lufthansa Consulting provided consultancy in supervising the concession project of the country’s three main airports and in developing the conception of an 'Airport City' at the airport in Brazzaville named Maya Maya Village. The airline start-up project now marks another milestone in the long-standing relationship between Lufthansa Consulting and the Government of the Republic of Congo. ECAir commenced operations with three daily flights on the Brazzaville Pointe-Noire route using a Boeing 737 -300, with a capacity of 120 seats, 12 Business and 108 Economy class seats. Lufthansa Consulting has developed a comprehensive five year business plan including the future network and fleet structure for the new airline. The consultants ensured adherence to international high quality and safety standards and also created the carrier’s overall design concept. The CEO of ECAir is Mrs. Fatima Beyina-Moussa.

EgyptAir Launches New Flights to China

• Mrs. Sakhile Reiling has been appointed the General Manager of Air Botswana.

EgyptAir Company introduced a new flight to Guangzhou in October bringing its number of flights to China to five per week. This decision was made in a strategy aiming to restore rates of operation and to execute marketing programmes to activate tourism in Egypt. In another development, EgyptAir added an additional weekly frequency to its service between Copenhagen and Cairo from the launch of its winter programme. The expansion will benefit business travellers as well as tourists since Egypt is making a strong comeback as a tourist destination following last winter’s unrest. EgyptAir’s service between Copenhagen and Cairo has been very successful in spite of last winter’s unrest in Egypt and other parts of the Middle East, and the airline therefore increases its capacity on the service by 25% by adding an extra weekly frequency from the launch of its winter timetable. Source: Copenhagen Airports.

Africa Wings would like to welcome the new CEOs to their new positions and wish them well. We would also like to thank the former CEOs of these airlines for their support of their airlines and the industry as a whole during their tenure and wish them success in their future endeavours.

Mrs. Fatima Beyina-Moussa, CEO ECAir.

Ethiopian Airlines, Boeing Announce Order for Four 777 Freighters Ethiopian Airlines and Boeing announced an order for four Boeing 777 Freighters, making Ethiopia the first African carrier to order the twinengine freighter. "The proven operational and economical efficiency of these airplanes will reposition Ethiopian Cargo in a stronger place to continue winning in this hypercompetitive market," said Tewolde Gebremariam, CEO of Ethiopian Airlines. In another development, Ethiopian Airlines is working on deploying enhanced capacity on the Mumbai and Delhi route, according to Tekeba H. Selassie, regional director, Indian subcontinent. Ethiopian Cargo flights operate six times a week from Mumbai and four times a week from Chennai. Passenger services are seven times a week from both Mumbai and Delhi. "In India, the market formula is different from the rest of the world. You can fill your capacity in the India market if you come with peak capacity, multiple routes and reasonable fares – one has to come with a formula that suits the market,” he stated. Source: expresstravelworld.


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news briefs

Photo: African-aviation.

New Airline Launch in Ghana

Arik Air Orders Two Boeing 747-8 In a bid to further boost options, Arik Air Nigeria and Boeing have announced a deal for two 747-8 Intercontinental airplanes. The order was announced during a signing ceremony at the Corporate Council for Africa's 8th Biennial U.S.-Africa Business Summit in Washington, D.C recently. "Air travel within the region continues to grow at a rapid pace and we must prepare our fleet to accommodate that growth", said Sir JIA Arumemi-Johnson, owner and chairman of Arik Air. "Boeing's new 747-8 fits perfectly into our long-term planning. It brings the best operating economics for its size, which is important with the increase in fuel prices". Source: All Africa.

Photo: Air Nambia.

Air Namibia Upgrades its Regional Fleet

Starbow has been launched as Ghana’s newest domestic airline, using two BAE 146 passenger jets. Starbow commenced scheduled commercial flights on September 26, following the delivery of its first BAE 146 in July. At the moment Starbow offers domestic flights between Kumasi and Accra, but in the future it plans to offer direct services to the capitals of neighbouring countries, including Burkina Faso, Ivory Coast, Liberia, Mali, Niger, Nigeria and Sierra Leone. At the end of the year another airline plans to launch in Ghana, with the help of Chinese funding. Africa World Airlines acquired its operator license from the Ghana Civil Aviation Authority earlier this year and plans to begin flying with brand new Embraer ERJ-145 aircraft at the end of the year. Source: defenceWeb.

Photo: DEFENCEWEB.

Air Namibia has upgraded its fleet by adding two New Generation Airbus A319-100 aircraft, which entered service in September 2011. In addition, two more Airbus A319-100 aircraft will replace the current Boeing B737-500 aircraft by November 2012. The airline also introduced

internal and governance processes, while intensely focusing on revamping our product offering and providing improved customer service, have ensured that our airline is well positioned for growth.” Source: Businessday.

direct 'non-stop' flights between Lusaka and Windhoek every day of the week, since 1 October 2011. The service will be operated using the airline’s recently acquired Embraer ERJ 135 Regional Jets with seamless connections via Windhoek to Cape Town, Johannesburg, Frankfurt and Accra. Source: Air Namibia.

Photo: Nigerian Bulletin.

SAA Group Net Profit up 77%

Air Nigeria Takes Delivery of B737-400 Air Nigeria has taken delivery of a Boeing 737-400 series aircraft in to bring its current fleet to 11 in continuation of its drive to consolidate on its regional and domestic route network. The arrival of this aircraft to Air Nigeria’s rapidly growing fleet further attests to the successes of the turnaround process initiated just over a year ago by the airline’s new management under the Chairmanship of Barrister Jimoh Ibrahim. Source: nigerianbuletin.

South African Airways (SAA) posted a turnaround 77% increase in net profit to R782m during the 2010-11 financial year, largely on the back of costcutting measures and improved efficiencies, but high debt levels remain a concern. The airline said the positive performance was achieved despite the fact that the market was still recovering from the effects of the global financial crisis as well as fluctuating crude oil prices. SAA CEO, Mrs. Siza Mzimela said: “Optimising the airline’s

In other good news, South African Airways proudly added another award to an impressive list of accolades for the year to date, when it received first place in the 2011 Sunday Times Top Brands category for Domestic Airline Consumer Metro. SAA in June 2011 won two major awards from Skytrax, the Best Airline Africa Award and the Service Excellence Africa Award. This is the ninth consecutive year that SAA has won the two awards. In another development, South African Airways will begin flying to Ndola in Zambia from the beginning of October 2011 and will introduce routes to Burundi, Rwanda and Benin later in the year as it expands its African routes. Source: Travpr.com Nigeria


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news briefs

Photo:File.

Kenya Airways Plans LCC Subsidiary Jambo Jet Photo:File.

Air Mauritius Extends Agreement with Traxon Europe Air Mauritius has prolonged and augmented its agreement with Traxon Europe, the international e-communications provider for the air cargo industry. The airline is now open to all markets and customers for EDI messaging. The contract gives Air Mauritius access to the Traxon Europe network world-wide and covers e-booking, air waybill data transfer, status information and consolidation list (FHL) transmission for customs. The aim is a stable interchange of messages between logistics partners and the air cargo carrier. With the new agreement Air Mauritius has set the path for coming e-customs and e-freight requirements. Air Mauritius is fully supporting IATA in the e-freight initiative. The Traxon network enables Air Mauritius to do business with all logistics and industry partners on a single uniform platform. The EDI messaging services are an integral part of Air Mauritius’ product offering and efforts to reduce paperwork and improve cost efficiency and results. The airline and customers profit from faster and more streamlined processes. Source: Air Transport News.

Kenya Airways is set to form a low-cost subsidiary to handle its regional operations, opening a new battlefront with budget operators for control of the Eastern Africa routes. The rise in passenger numbers within Eastern Africa, coupled with the rising competition for control of this market seem to be behind KQ’s decision to establish a subsidiary for local and regional flights. The airline’s Group MD and CEO. Dr. Titus Naikuni said that the regional unit will have a leaner costs structure compared to those of international airlines-signalling a cost-saving plan that will strengthen its hand in the ongoing price war. “Jambo Jet is being formed and we are still in the early stages of it,” said Dr. Naikuni.


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Progressive Growth From a single 5 seater aircraft 18 years ago to 11 aircraft today, one man’s vision has given us a remarkable opportunity to share a dream of success that is truly Tanzanian

Grow with us.

Ato Girma Wake Wins Medal of Glory Award

Precision Air touches base in Hahaya and Johannesburg

Former Chief Executive Officer (CEO) of Ethiopia Airlines, Ato Girma Wake, has won the 2011 Medal of Glory Award (MOGA), by the Foundation for Democracy in Africa (FDA). The highest honour is awarded annually during the Africando Trade and Investment Symposium to ''exemplary leaders for their extraordinary contributions to economic, social, cultural and agricultural development and democracy in Africa''. Mr. Wake was chosen for his lifelong contributions to the development of civil aviation in Africa, and globally; and for linking markets and destinations within Africa (intra-Africa), and connecting Africa to international markets and destinations. Source: Panapress.

Precision Air have added Johannesburg and Hahaya, Comoros, to their expanding network. This has been made possible by securing a second Boeing 737-300. “This is indeed an exciting time for us and our customers who have been waiting for a long time for us to start the Johannesburg route,” said Mr. Ibrahim Bukenya, Precision Air’s Country Manager in South Africa. “We will initially start with four flights a week on Wednesday, Friday, Saturday and Sunday and eventually daily flights by December depending on the demand,” he added. Passenger numbers on the Dar es Salaam – Johannesburg route have increased significantly with the scrapping of the visa requirement between the two countries. The departure and arrival times have been planned to ensure seamless connections to the rest of the Precision Air network out of Dar es Salaam, as the departure from Johannesburg is 23.50, arriving at 04:20 in Dar es Salaam. The Johannesburg evening flight departs Dar es Salaam at 20.00 to cater for the returning business and leisure traffic. Precision Air joins South African Airways in offering a direct service on the busy Dar es Salaam –Johannesburg route. The airline’s service to Hahaya will provide a reliable link for both business customers and tourists travelling to this beautiful holiday destination. The Airline believes this will give Comoros a significant opportunity to further integrate itself into the East African Community, which is made possible by Precision Air’s coverage to potential areas across the region.

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Above from (left to Right): Mrs Marlene Manave CEO - LAM Mozambique Fatima Beyina-Moussa CEO - ECAIR Mrs Siza Mzimela CEO- SAA Mrs Theo Namases Ag CEO - Air Namibia Maureen Dlamini CEO - Zambezi Airlines Mrs Shakile Reiling, CEO - of Air Botswana

T

he airline industry worldwide is typically a boys’ club at the top. Pilots and maintenance personnel are generally men. Women traditionally are to be found working as cabin attendants or check-in staff. With the industry becoming more competitive, where customer service and people management skills are becoming critical, there is a need for a shift in focus. Such structural changes are opening doors to women in areas traditionally dominated by men. Hence the more innovative and people-oriented low cost carriers have more women in all areas than the legacy carriers. Africa follows the global trend. However, the Southern African region seems to be the one region with most women in CEO positions in Africa. For instance, there are five women CEOs in the region. Siza Mzimela is CEO of the largest airline on the continent, South African Airways and the airline's Chairperson of the Board is Ms. Cheryl Carolus. LAM Mozambique Airlines is headed by Dr Marlene Manave, who replaced the long serving Mr. Ricardo Viegas earlier this year. In Namibia, Mrs Theo Namases is at the helm of the airline and Zambezi Airlines recently appointed Mrs. Maureen Dlamini as the CEO. Air Malawi also had a lady, Mrs Esther Chioko, who headed the airline from 2004 to 2006. Air Botswana as appointed Mrs. Shakile Reiling as CEO to lead this growing airline. In the Central Africa region, the newly created ECAir, the national carrier of Congo, appointed Mrs. Fatima Beyina-Moussa as the first CEO of the airline. It is surprising that in the 21st century more than 50% of the entire population is largely excluded from senior management roles or at board level. The question is ‘why are other regions of the African continent lagging so far behind Southern Africa in employing women at the top?’. Perhaps this issue needs further debates in AFRAA forums.

Women CEOs

in African Airlines Africa is no worse than the rest of the world in excluding women from senior airline positions. Europe has only six female airline CEOs of which three head low cost carriers. Syrian Arab Airlines in the Middle East is also headed by a lady. There are no women CEOs in the large carriers in the USA or Canada. In South America, only Aerogal of Ecuador has a female CEO although it is worth pointing out that the Board of TAM in Brazil is headed by a woman, a great achievement. The Asian region boasts four airline female CEOs of which three head low cost carriers. In Africa, women also rarely feature at the next level below CEO. Could it be that there are more men at the top because of their networks making it difficult for women to penetrate? Do women make a difference to airline fortunes? This is another area that merits study. Suffice it to say that the presence of women at the top changes the nature of deliberations in boardrooms and senior management meetings. However female presence is an indication of a broader cultural change within a company (or a country) that can enhance the competitive capacity of the organisation through introducing new talent. Running an airline is highly complex. It requires wide and deep expertise in a comprehensive range of fields. One needs to be adept at understanding the aero-political challenges and working around them, have ability to work with regulators, and demonstrate expertise in fleet management and financeseeking, have revenue management and cost management expertise, ability to instil a safety culture, effectively manage maintenance, flight and ground operations, know the right information communication technologies to adopt, dealing with a workforce as diverse as pilots, maintenance people, cabin attendants, marketing personnel and others, and managing passenger ticket sales and cargo.

One has to be able to deal with diverse trade unions, some more militant than others. The stories about strikes grounding airlines around the continent by some key airline people feature regularly in the press. The question is whether such an industry is welcoming to women or not. No clear answers here, but it is to be noted that the industry is changing rapidly. The above relates to the typical legacy carriers. Low cost carriers are introducing a new culture, making airline business more like a commodity – one with flexible working conditions, no or limited unionisation, less hierarchical layers etc.

Perhaps that explains why there are more women CEOs in the low cost carriers with their much more progressive cultures. We believe that prospects for more women getting into the industry are bright. As carriers change from thinking of themselves as being in the airline business to being in the service business where the customer is king, we now see more young ladies than ever before joining airlines. For example at EgyptAir Training School, there are more women engineers than men. As African aviation develops to catch up with the rest of the world, we expect to witness new, gender-blind airlines coming up. The focus then would likely be on the capability, expertise and attitude of the employee where diversity is celebrated and encouraged.


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November 2011-January 2012

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