Why Do So Many African Airlines Fail
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Why Do So Many African Airlines Fail
I know that airlines all over the world are failing all the time, but the African continent seems to have more than its fair share of these. I wonder if there's a common factor in all of them - government interference, corruption, mis-management, poor planning, external factors (exchange rates). So many airlines, especially national carriers have failed over the years; among them Benin Airlines, Botswana Airways, Cameroon Airlines, Air Gabon, Ghana Airways, Air Guinea, Air Afrique, Air Ivoire, Air Liberia, Air Mali, Air Senegal, Royal Swazi National Airways, East African Airlines, Uganda Airways, Zambia Airways, Air Zimbabwe, Nigeria Airways. So many others are really struggling and may not be around at the end of the decade, amongst them Kenya Airways, SAA, Air Tanzania, Fastjet, Arik Air.
The major hubs in Africa seem to be in the north, west and south - Cairo, Casablanca, Lagos, Abuja, Johannesburg, Capetown, with Nairobi being the only major hub in the east.
At the moment we have KQ, 'The Pride of Africa' in a huge financial mess, selling aircraft and laying off staff, while ET; 'The Lion of Africa' is the African success story.
Ethiopian has been government owned for its 70 years but maybe because the government has not interfered, but pretty much left it to be run by competent managers, but are there common factors in the failed airlines? Undoubtedly one big factor has to be currencies with many major costs such as fuel, servicing, spares, leases being paid in hard currency while most African currencies have greatly depreciated. Corruption has also been a large factor in many failures. Another problem in many African airlines is CEOs with little or no airline management experience allowing their egos to influence decisions and failing to heed their managers. There have also been so many failures caused by allowing the same lousy managers who oversaw one failure to repeat their failures with new airlines. Many airlines also have very poor business and route plans partly caused by a lack of qualified, experienced, competent managers with proven records of success.
I'm just an ancient rotary aviator so I'd be interested to hear f opinions rom those with much more knowledge than I'll ever have as to whether they think there's a common factor or whether it varies by country or region in the continent.
The major hubs in Africa seem to be in the north, west and south - Cairo, Casablanca, Lagos, Abuja, Johannesburg, Capetown, with Nairobi being the only major hub in the east.
At the moment we have KQ, 'The Pride of Africa' in a huge financial mess, selling aircraft and laying off staff, while ET; 'The Lion of Africa' is the African success story.
Ethiopian has been government owned for its 70 years but maybe because the government has not interfered, but pretty much left it to be run by competent managers, but are there common factors in the failed airlines? Undoubtedly one big factor has to be currencies with many major costs such as fuel, servicing, spares, leases being paid in hard currency while most African currencies have greatly depreciated. Corruption has also been a large factor in many failures. Another problem in many African airlines is CEOs with little or no airline management experience allowing their egos to influence decisions and failing to heed their managers. There have also been so many failures caused by allowing the same lousy managers who oversaw one failure to repeat their failures with new airlines. Many airlines also have very poor business and route plans partly caused by a lack of qualified, experienced, competent managers with proven records of success.
I'm just an ancient rotary aviator so I'd be interested to hear f opinions rom those with much more knowledge than I'll ever have as to whether they think there's a common factor or whether it varies by country or region in the continent.
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I worked in Lagos shortly after the national carrier disappeared and saw the remnants of the aircraft and spoke to people who had worked on the field for many years. One thing I remember them saying was there were 6000 ghost workers on the payroll. Talk about a bloated workforce.
A national airline is simply a way for politicians to make money. Bribes get taken from suppliers, contracts entered into which may not make commercial sense, assets sold cheaply, workforce gets bloated with connected but incompetent people. Unviable routes are maintained "in the national interest". Tickets get given to friends and relatives.
Even private airlines battle with red tape and demands for money under the table, eg if an aircraft is grounded while a part sits in customs and they want a couple of hundred dollars or wait two weeks what are the managers going to do ?
Add in poor infrastructure and shortage of skilled manpower and it's a wonder any of them make a profit at all.
Even private airlines battle with red tape and demands for money under the table, eg if an aircraft is grounded while a part sits in customs and they want a couple of hundred dollars or wait two weeks what are the managers going to do ?
Add in poor infrastructure and shortage of skilled manpower and it's a wonder any of them make a profit at all.
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I'm agree with you Raski... totally agree... When corrupt politicians are in a business, this business will fall down soon or later.
Don't forget North Africa. Some major airlines like Tunisair, Air Algérie, Royal Air Maroc or Libyan look healthy economically, but behind that image there is a dark side full of shenanigans...
As a Moroccan, I've heard a lot about Royal Air Maroc, a big airline, with hundreds of destinations and a large fleet... This airline is ONLY making money with Africa (well, they also takes advantage in the Hajj period and in the Montréal-Casablanca route). It's one of the few airlines that have an extensive network in Africa and she takes advantage asking for exorbitant prices . Now she is fighting against Air Arabia because this last one also wants part of the delicious African cake... She fighted also against Turkish and Ethiopian offering "low fares flights"... Anything to keep her market. I traveled with RAM to some African destinations paying the price of a transoceanic flight and sincerly the attention on board is insufferable. In these trips it has become clear to me that the RAM makes money with these routes... a lot of money.
Air Algérie or Tunisair are in the similar case too. They are a clear example of corrupt airlines. Thanks to God Morocco has signed the Open Skies agreement and many European airlines are operating in the country. Now I can travel to Europe without selling an organ :P
Answering your question I'm going to tell you one word : corruption. That is the basis of the problem.
Cheers
Don't forget North Africa. Some major airlines like Tunisair, Air Algérie, Royal Air Maroc or Libyan look healthy economically, but behind that image there is a dark side full of shenanigans...
As a Moroccan, I've heard a lot about Royal Air Maroc, a big airline, with hundreds of destinations and a large fleet... This airline is ONLY making money with Africa (well, they also takes advantage in the Hajj period and in the Montréal-Casablanca route). It's one of the few airlines that have an extensive network in Africa and she takes advantage asking for exorbitant prices . Now she is fighting against Air Arabia because this last one also wants part of the delicious African cake... She fighted also against Turkish and Ethiopian offering "low fares flights"... Anything to keep her market. I traveled with RAM to some African destinations paying the price of a transoceanic flight and sincerly the attention on board is insufferable. In these trips it has become clear to me that the RAM makes money with these routes... a lot of money.
Air Algérie or Tunisair are in the similar case too. They are a clear example of corrupt airlines. Thanks to God Morocco has signed the Open Skies agreement and many European airlines are operating in the country. Now I can travel to Europe without selling an organ :P
Answering your question I'm going to tell you one word : corruption. That is the basis of the problem.
Cheers
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Each failed African airline has a slightly different scenario behind it's failure but for what its worth, I think that one of the largest causes is the size of the figures involved in an airline. When you're talking millions of dollars for a plane, millions and millions of dollars in operating fees (legit or otherwise), hundreds of staff in a number of locations, offices and departments, fees paid to dozens of offices in each region/country operated over or into, it becomes all too easy to 'lose' just how many staff are actually required, how much money is actually being spent well or spent badly, how much is creamed off the top, how much is 'paid' to facilitators, what the real cost of operations are, and how many fees are really necessary or even paid. Airlines have operations in several different countries, so it becomes even easier to disguise how much is being re-directed out of the country of origin, and under different rules and laws.
When you start talking airline anywhere in the third world, it conjures up glamour, money and prestige. And as soon as politicians or governments smell the size of money required, they become involved in some form or other. And suddenly one's overheads become 'heavier' than planned, and staff selection becomes biased towards family members, contractors have family connections requiring additional salaries and corruption starting at the top, starts to filter all the way down the chain. Add to this a government minister demanding a plane for a private trip and to hell with the schedules, costs and paying passengers, and the trouble starts to accelerate. Factor in that an airline almost always has more than the minimum staff required to attract trade union or labour laws about hiring/firing, and now you can't get rid of dead wood staff without massive issue. Bring in politics - your benefactor is now out of favour and needs his money back in a hurry for a court case, or the facilitator who promised that whatever issue would be sorted out, suddenly is under impeachment and things get very difficult.
Lastly, air travel is still the privilege of the rich/middle class person, and beyond most people in Africa, even if its budget orientated. Because of the legitimate overheads, prices are still more than most people can afford, and because of the illegitimate overheads, costs are kept down by cutting maintenance costs (the plane still flies, why do we need this), training (just get someone local to train the next guy), and standards (we've always done it this way, it works, why change it). For a while, egos and money will keep things afloat, but eventually the bubble will pop, and another airline struggles to keep above water.
When you start talking airline anywhere in the third world, it conjures up glamour, money and prestige. And as soon as politicians or governments smell the size of money required, they become involved in some form or other. And suddenly one's overheads become 'heavier' than planned, and staff selection becomes biased towards family members, contractors have family connections requiring additional salaries and corruption starting at the top, starts to filter all the way down the chain. Add to this a government minister demanding a plane for a private trip and to hell with the schedules, costs and paying passengers, and the trouble starts to accelerate. Factor in that an airline almost always has more than the minimum staff required to attract trade union or labour laws about hiring/firing, and now you can't get rid of dead wood staff without massive issue. Bring in politics - your benefactor is now out of favour and needs his money back in a hurry for a court case, or the facilitator who promised that whatever issue would be sorted out, suddenly is under impeachment and things get very difficult.
Lastly, air travel is still the privilege of the rich/middle class person, and beyond most people in Africa, even if its budget orientated. Because of the legitimate overheads, prices are still more than most people can afford, and because of the illegitimate overheads, costs are kept down by cutting maintenance costs (the plane still flies, why do we need this), training (just get someone local to train the next guy), and standards (we've always done it this way, it works, why change it). For a while, egos and money will keep things afloat, but eventually the bubble will pop, and another airline struggles to keep above water.
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Very true Foxcotte. A few overseas companies have come in and thought they can change this, however, the fact is that this is Africa and they can never change it; it will always change them - or they'll just go down the crapper.
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There is an old joke about corruption in Africa.
Why has Asia boomed in recent decades, while Africa has sunk into penury?
The pithiest answer is a joke I first heard in Nigeria. An African and an Asian make friends at Oxford before becoming politicians.
Years later, the African visits the Asian and is impressed by his mansion, with a Mercedes-Benz in the drive.
"How can you afford this?" he asks. The Asian points to a majestic highway outside. "See that road?" he says with a wink. "Ten per cent."
Later the Asian visits the African's home - a palace with a dozen Mercedes-Benzes.
Anticipating the question, the African says: "See that road?" The Asian sees only bush. "100 per cent."
Why has Asia boomed in recent decades, while Africa has sunk into penury?
The pithiest answer is a joke I first heard in Nigeria. An African and an Asian make friends at Oxford before becoming politicians.
Years later, the African visits the Asian and is impressed by his mansion, with a Mercedes-Benz in the drive.
"How can you afford this?" he asks. The Asian points to a majestic highway outside. "See that road?" he says with a wink. "Ten per cent."
Later the Asian visits the African's home - a palace with a dozen Mercedes-Benzes.
Anticipating the question, the African says: "See that road?" The Asian sees only bush. "100 per cent."
In my opinion none of the above (nice one Zaphod!) is beyond human control, except for Foxcotte's first sentence in his last paragraph. Even in Africa an honest company could be run, given the will (and I doubt if Fastjet is far from that, knowing Ed Winter). Their corruption problems will be with contractors and external support agencies.
Africa's population at large simply isn't wealthy enough to travel by air regardless of cost, most can't even afford shoes, let alone a bus fare for Heaven's sake and neither do they have the peculiar western desire to forever be somewhere else 1000 miles away when 10 miles would do just as well. The mass demand for city breaks that established European locos but are completely unknown in Africa. Commerce, such as it is, works just fine by phone and internet not by largely unnecessary indulgence travel.
Want African locos to thrive? Fix Africa's economy. Fix Africa's attitude to corruption. That's all. (!!) Give it 50 years of cultural revolution continent wide but don't hold your breath. Unfortunately the cultural revolution facing Africa just now is a toxic one and although it is gaining much from China's integrity and general wealth isn't on the list and it shows little if any sign of getting there under its own initiative. Even so most routes would be long and thin by European standards which doesn't make things any easier.
Bahati nzuri
Africa's population at large simply isn't wealthy enough to travel by air regardless of cost, most can't even afford shoes, let alone a bus fare for Heaven's sake and neither do they have the peculiar western desire to forever be somewhere else 1000 miles away when 10 miles would do just as well. The mass demand for city breaks that established European locos but are completely unknown in Africa. Commerce, such as it is, works just fine by phone and internet not by largely unnecessary indulgence travel.
Want African locos to thrive? Fix Africa's economy. Fix Africa's attitude to corruption. That's all. (!!) Give it 50 years of cultural revolution continent wide but don't hold your breath. Unfortunately the cultural revolution facing Africa just now is a toxic one and although it is gaining much from China's integrity and general wealth isn't on the list and it shows little if any sign of getting there under its own initiative. Even so most routes would be long and thin by European standards which doesn't make things any easier.
Bahati nzuri
Last edited by Wageslave; 12th Apr 2016 at 08:10.
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Even in Africa an honest company could be run, given the will (and I doubt if Fastjet is far from that, knowing Ed Winter)
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Airline business is per part low margin and only due to huge masses a profitable business. Even with appropriate risk uplift (which no Airline of the world can afford) volatility of the business is so high that bankruptcy is not an avoidable situation. Given the instability of many African Societies failure rates look totally normal.
Last edited by Fly4Business; 12th Apr 2016 at 12:59.
Corruption.
Lack of vision.
Poor management.
Poor infrastructures and no will to fix them (money taking another route...).
Extremely poor training system.
Africa is behind ages compared to western aviation.
I've bet and i lost, leaving this continent soon.
Lack of vision.
Poor management.
Poor infrastructures and no will to fix them (money taking another route...).
Extremely poor training system.
Africa is behind ages compared to western aviation.
I've bet and i lost, leaving this continent soon.
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RwandAir is doing pretty well. The national airline is usually a pretty good barometer of the country as a whole. Its neighbors are a different story altogether....however, transparency, vision and cooperation have allowed the country and airline to grow.
Why Do So Many African Airlines Fail
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And is East African Civil Aviation Academy (mentioned in the article) able to produce a sufficient supply of pilots into the airline ?
