Airline – BartonHeyman

Africa Update: Sky’s the limit as Africa makes major move towards aviation single market

Barton Heyman — Mon, 26 Feb 2018 10:02:17 +0000

Back in 1999, under what is known as the Yamoussoukro Decision, African countries planned to free their skies for air travel.

Last Sunday the African Union (AU) took its first big step towards this goal, launching the Single African Air Transport Market (SAATM).

The landmark announcement unveiled by Rwandan President Paul Kagame, the new chair of the AU, aims to transform intra-African air travel, lower prices and increase connectivity.

The initiative has 23 signatories. There are 32 AU members still to come on board.

Take off for African aviation

Opening up the continent’s skies could be a huge coup for African airlines, which would work under a common regulatory framework.

It could also benefit intra-continental travellers who are often bound to illogical and time-consuming routes via Europe and the Middle East when flying between African countries.

The agreement will also hope to increase the continent’s global share of the aviation industry. The total population of Africa accounts for around 17% globally, but the continent’s proportion of air travel passengers varies between 2-4%.

In a statement, Rapahel Kuuchi, Vice President for Africa at the International Air Transport Association (IATA) said: “Greater connectivity will lead to greater prosperity.”

“An IATA survey suggest that if just 12 key African countries opened their markets and increased connectivity an extra 155,000 jobs and US$1.3 billion in annual GDP would be created in those countries.”

The approach follows in the footsteps of similar single market aviation agreements such as the EU’s Internal Market for Aviation, which are generally recognized to have reduced costs and increased routes.

Chris Zweigenthal, CEO of the Airlines Association of Southern Africa, told CNN: “We see this as a renewed commitment from — at the moment — 23 states who committed themselves to a single aviation market.”

“The important thing now that there’s been the announcement is that there is an implementation phase and I think there’s still a lot of work to be done to ensure full implementation.”

Africa 2063

The launch of the SAATM is part of the AU’s Africa 2063 project to encourage pan-African integration.

The recent relaxing of visa restrictions for African citizens in a number of countries and the launch of an African Union passport in 2016 for heads of states and senior officials — with plans to distribute to all Africans by 2020 — show a growing commitment to intra-continent development.

All this amounts to much less time wasted for African citizens filling out bureaucratic visa forms or on bizarre travel routes, and greater freedom for airlines to set-up shop in neighbouring countries.

The AU claims it is also on the cusp of agreeing a free trade deal, the Continental Free Trade Area (CFTA), for goods and services to be launched by the end of 2018.

While the European Union steps from crisis to crisis, the pursuit of Pan-Africanists towards a more integrated and united continent is slowly taking flight.

Africa Update: South Africa’s main airport evacuated in bomb scare

Barton Heyman — Tue, 20 Feb 2018 10:48:03 +0000

Johannesburg’s O.R. Tambo airport, Africa’s largest, was evacuated on Monday and passengers forced to wait for two hours to return after South African officials identified a suspect bag.

Images of the deserted terminal were posted to social media while other photographs showed crowds of passengers waiting on roadways for the all-clear to return inside.

The airport’s international arrivals hall was evacuated around 0915 GMT after the errant baggage was spotted and airport users were unable to re-enter until after 1115 GMT, airport spokeswoman Leigh Gunkel-Keuler told AFP.

“To ensure the safety of passengers and customers in the airport terminal building, people were evacuated from the area,” she added in a statement.

“(The police service) has now provided airport management with the assurance that passengers and customers can now return to the airport terminal building.”

The incident caused delays to several flights although the airport had largely returned to normal operation, she added.

“We apologise to clients, passengers, retail concessionaires and all other stakeholders for the inconvenience and ask that they plan accordingly.”

More than 20.6 million passengers use the airport every year and 41 airlines serve the facility according to its operator, Airports Company South Africa.

World Update: Russian plane carrying 71 people crashes near Moscow

Barton Heyman — Mon, 12 Feb 2018 09:42:31 +0000

A Russian passenger plane carrying 71 people crashed outside Moscow on Sunday after taking off from the capital’s Domodedovo airport, Russian media reported.

The Antonov An-148 plane operated by the domestic Saratov Airlines was flying to Orsk, a city in the Urals, and crashed in the Ramensky district on the outskirts of Moscow. Russian news agencies reported 65 passengers and 6 crew were on board.

News agencies said witnesses in the village of Argunovo saw a burning plane falling from the sky.

A source from Russia’s emergency services told Interfax that the 71 people on board “had no chance” of survival.

The same news agency reported that the wreckage of the plane was spread over a wide area around the crash site.

Russian state television aired a video of the crash site, showing parts of the wreckage in the snow. Russia has seen record high snowfalls in recent days and visibility was reportedly poor.

The Russian-made plane was 7 years-old and bought by Saratov Airlines from another Russian airline a year ago.

Russian media reported that the emergency services were unable to reach the crash site by road and that rescue workers walked to the scene on foot. Emergency services said in a statement that over 150 rescue workers were deployed to the site.

A source at Domodedovo, Moscow’s second largest airport, told agencies that the plane disappeared from radars within two minutes of take off.

The Russian transport minister was on his way to the crash site, agencies reported. The transport ministry said several causes for the crash are being considered, including weather conditions and human error.

The governor of the Orenburg region, where the plane was flying to, told Russian media that “more than 60 people” onboard the plane were from the region.

Prosecutors opened an investigation into Saratov Airlines following the crash.

Plane crashes are common in Russia, where airlines often operate ageing aircraft in testing flying conditions.

A light aircraft crashed in November in Russia’s far east, killing six people on board.

In December 2016 a military plane carrying Russia’s famed Red Army Choir crashed after taking off from the Black Sea resort of Sochi, killing all 92 people on board.

The choir had been due to give a concert to Russian troops operating in Syria.

Pilot error was blamed for that crash.

In March 2016, all 62 passengers died when a FlyDubia jet crashed in bad weather during an aborted landing at Rostov-on-Don airport.

Africa Update: ‘Foreign airlines dominate 80% traffic in Africa’

Barton Heyman — Mon, 08 Jan 2018 10:09:19 +0000

Managing Director, Ethiopian Airlines International Operations, Mr. Esayas Woldemariam Hailu, has decried the lack of cooperation among Governments of African countries noting that the trend had created a loophole for foreign carriers to continuously exploit the continents aviation sector to the detriment of local airlines. Hailu spoke in an interview with some Nigerian journalists at Addis Ababa, Ethiopian, recently, where he lamented that despite the agreement between the continent’s governments on open sky policy with other foreign countries, its implementation had been skewed in favour of foreign carriers.

He said the open sky policy had only ended up allowing western and middle east carriers to benefit more by airlifting over 80 per cent of air travellers out of Africa, leaving local airline operators with the abysmal 20 per cent. “Some of the African countries grant free sky to other airlines that are operating from out of the continent, but unfortunately, such rights are not given to their fellow African carriers,” he said.

World Update: World Busiest Airport in Chaos

Barton Heyman — Mon, 18 Dec 2017 10:48:34 +0000

Nearly 11 hours after a power outage paralyzed the world’s busiest airport, Atlanta’s Hartsfield-Jackson International got its electricity back late Sunday night.

The lights flickered on shortly before midnight, after an exhausting day for travellers, that had left thousands stranded in dark terminals and on planes sitting on the tarmac. A ground stop in Atlanta disrupted air travel across the United States and led to cancellations of more than 1,000 flights in and out of the airport.

Shortly after power came back, some passengers lined up at security screening, hoping to beat the crowds as the TSA checkpoints re-opened at 3:30 a.m. The airport could see a logjam of passengers and delays as more than 400 flights have been cancelled Monday.

The outage, which affected all airport operations, started with a fire in a Georgia Power underground electrical facility, Atlanta Mayor Kasim Reed said. The electrical fire’s intensity damaged two substations serving the airport, including the airport’s “redundant system” that should have provided backup power, Reed said.

Atlanta airport outage complicates insanely busy holiday travel

Atlanta is the heart of the US air transport system, and the disruption led to 1,180 flight cancellations to and from the airport Sunday, according to flight tracking service FlightAware.

A traveler sleeps on a baggage carousel at Hartfield-Jackson Atlanta International Airport on Sunday.

Delta, which has its largest hub in Atlanta, canceled 300 flights Monday, most of which are morning, inbound flights to Hartsfield-Jackson. Delta tweeted that it expects flight schedules “to return to normal by Monday afternoon.”

But weather could complicate matters in the morning as a dense fog advisory is in effect.

Sunday’s standstill at the airport ripples beyond Atlanta, said Desmond Ross, principal of DRA Professional Aviation Services.

“There’s a lot of other issues downstream to all other airports, where flights should be arriving and departing, connecting to Atlanta, that are going to be disrupted as well. So we’re talking possibly millions of people disrupted over the next few days and it is certainly not going to be fixed in one day,” he said.

Article update: 6 reasons to invest in Africa

Barton Heyman — Mon, 09 Oct 2017 11:57:37 +0000

The conversation about Africa is shifting from one of “deficits” and “gaps” to one about opportunities, prospects, ventures and creativity. That’s not news to companies that have paid close attention to the continent and invested there. The fast growing youth population, the urbanization expected to drive over 50% of Africans to cities by 2050, and Africa’s formalizing economy are all well known. These trends and other developments have driven a half century or more of growth in Africa, and will continue to do so.

It’s important to acknowledge that Africa tests an investor’s patience. Time horizons and return models that fit other markets don’t always work in there. Even the most experienced, sophisticated companies can be forced to recalibrate, as Nestlé did last year when it announced a 15% cut in its workforce across 21 African countries.

Deficits remain. What’s important is that investors now realize there is money to be made for those bold enough to help close the gaps. As that takes place, the promise of greater prosperity for Africans and African businesses will be realized. Why is it a good time to invest?

1. Africa needs ‘connectors’

Missing across much of sub-Saharan Africa are the roads, rails, ports, airports, power grids and IT backbone needed to lift African economies. This lack of infrastructure hinders the growth of imports, exports, and regional business.

Companies that can connect Africans and markets can prosper. Sub-Saharan Africa is plagued by power outages – almost 700 hours a year on average – sapping productivity, adding cost and leaving businesses captive to back-up and alternative power options. Massive investment is leading to major upgrades and expansion at African ports and airports, but much of Africa’s growth potential depends on in-country and intra-African road, rail and air connections.

Roads and rail lines are sparse, decrepit and over-burdened. A lack of aviation agreements has limited intra-African air connections. Africa’s lack of efficient storage and distribution infrastructure hinders businesses, entrepreneurs and farmers. Up to 50% of African fruit and vegetables spoil before reaching markets.

There’s a soft infrastructure deficit, as well. Outside of South Africa, the data and information critical to decision-making by businesses is missing or hard to obtain – credit and risk information, market data, consumption patterns, you name it. Lessons from Dubai and Singapore tell us that once an infrastructure race is on in a rapidly expanding market, being the first-mover is a significant advantage for investors.

2. African trade barriers are falling and intra-African trade holds enormous potential

With the 54-nation Continental Free Trade Area – Africa’s own mega-trade deal – even the smallest African economies could see a lift. If duties are lowered and incentives introduced, manufacturers could see benefit from setting up production and assembly operations in multiple African countries. That could lead to development in electronics, machinery, chemicals, textile production and processed foods.

As a first step, free trade between and within the African economic blocs would make a huge difference. Africa’s share of global trade – a meager 3% – can only increase if the continent’s commodity and consumption-led economies begin to produce a broad array of goods for home markets and export.

And an increase in local beneficiation in the commodities sector could be a driver of growth – processing local commodities (such as minerals, coffee, cotton) in country rather than exporting them in raw form. That said, it will continue to be a challenge for regions with poor power and infrastructure to compete as global manufacturers.

3. Customers are changing

With the growth of Africa’s middle class, we’re seeing development of new expectations. Educated, urban professionals are young, brand-aware and sophisticated in terms of their consumption. Retailers and consumer brands want to anticipate and drive buying preferences in fashion, home and lifestyle products, but they know they need international standard supply chains if they are to meet demand. The largest economic forces in Africa are small to medium enterprises, working to meet this new demand and competing with global brands.

4. Digital transformation

Africa leads the world in mobile adoption, which continues to offer the biggest cross-sectoral economic opportunities. Mobile payment networks, pioneered in East Africa, opened the wired, global economy to poor, unbanked city and rural dwellers. Companies such as Novartis are using mobile communications to manage their supply chain; Olam has used mobile to reach out to new African suppliers and farmers. These mobile initiatives have achieved huge successes.

To illustrate: In 2014, Ethiopia set up a telephone hotline allowing small farmers immediate access to advice from agronomists, with over 3 million calls done in the first six months of the pilot programme. Mobile is the area where Africa has pushed beyond the boundaries in the developed world, and African tech incubators are pushing to innovate. So what’s next?

5. Africa is diversifying

African economies are finally beginning to diversify beyond commodities, though this is still in the early stages. Africa is seeing a returning diaspora that recognizes the potential and opportunities in their own countries. This population supports local economic growth with their skills and talent, by acting as “first movers”, investing back in their communities.

At the same time, African countries are beginning to place bets on non-commodity areas where they can be competitive. And they are packaging themselves to appeal to a broader set of investors. Recognizing they can no longer count on growing investment from China, every country now has what are called “Investment Promotion Agencies”, which act as one-stop shops for investors, assisting with registration, taxes, and other steps to establish companies locally.

6. Africa can lead in sustainable development

In energy, technology, supply chain design and other areas, Africa has the ability to look at what works elsewhere then fashion its own answers. It can openly embrace new technology and ideas, with no historical imprint from which to break free. It can develop flexible fuel grids that generate power with a mix of abundant wind, solar, hydro and bio energy, alongside conventional fuels such as oil and gas, which are also abundant. Nowhere on Earth is there as much unused or poorly used arable land, so look for big agricultural breakthroughs and productivity gains in food production in Africa.

Business leaders are hungry for vibrant new markets and consumers know the reality: globalization means there are too few remaining frontiers. As the developed world matures, and becomes increasingly difficult to trade in as a result of factors from legislation to terrorism, opportunities for corporate growth are limited. There are too few places where entrepreneurs and businesses with ideas and an appetite for risk can bring value and find long-term growth if they are persistent, creative and determined. But there’s something else they know: Africa is still such a place.

Africa Update: AfDB to decide fate of $296MN Ivorian Airbus purchase

Barton Heyman — Wed, 04 Oct 2017 07:38:52 +0000

The African Development Bank [AFDB.UL] is expected on Wednesday to decide the fate of a $296 million financing package for Ivory Coast national airline Air Cote d‘Ivoire’s purchase of five new Airbus (AIR.PA) A320s, a bank document seen by Reuters showed.

While the Abidjan, Ivory Coast-based lender has participated in loan packages to commercial airlines in the past, some board members have raised questions about the deals and whether the loans fulfil the AfDB’s development vocation.

Air Cote d‘Ivoire, which aspires to become West Africa’s premier airline and make Abidjan a regional travel hub, ordered three A320neos and two A320s last year. Using a stop-gap loan, it took delivery of the first aircraft in July, bringing its total fleet to 10 planes.

“It’s to finance the purchase of the five Airbuses, the training of the crew and mechanics and the maintenance center,” the company’s General Manager Rene Decurey told Reuters of the loan request.

The size and structure of the package have not been made public, and Decurey declined to confirm the amount.

But according to an AfDB document seen by Reuters, it includes a $60 million sovereign loan from the bank to the Ivorian state, which owns a 65 percent stake in the airline. The bank would also provide $55 million in non-sovereign loans and a $20 million partial risk guarantee.

Specialist bank Investec (INVP.L) will contribute $30 million, with other commercial banks providing loans totaling $81.5 million.

Air Cote d‘Ivoire will bring equity of over $50 million to the deal. In addition to the Ivorian state, the airline’s other shareholders are Air France (AIRF.PA) with a 20 percent stake and private Ivorian investor Goldenrod, which holds 15 percent.

The airline, which boasts service to 20 African and five domestic destinations, has previously said the expansion will help grow its business. Its proposal argues that the request is in line with the AfDB’s goals of supporting improved transportation and infrastructure in underserved markets.

The bank has lent to airlines before, most recently contributing nearly $93 million alongside Delta (DAL.N) to finance Ethiopian Airlines’ [ETHA.UL] investment plans.

However, Wednesday’s board meeting could prove contentious, Abidjan-based diplomats said.

Some board members have questioned whether financing Air Cote d‘Ivoire’s aircraft acquisition fits with the AfDB’s stated mission of reducing poverty in Africa by spurring “sustainable economic development and social progress”.

Others have been critical of the deal’s unique structure, which would create a special vehicle allowing the Ivorian state to transfer its sovereign loan to the airline with an AfDB guarantee.

The bank’s rotating board of directors is composed of 13 representatives from its 54 African member countries as well as seven from the 27 non-African nations that contribute to its capital.

France, Germany and Spain, whose governments hold stakes in Airbus, currently sit on the AfDB board.