African Airlines Association (AFRAA) secretary general Elijah Chingosho stated (19-Nov-2012) high taxes and charges on airlines and passengers were holding back airline industry growth and making it uncompetitive. Airport charges of between USD60 and USD80 in Africa were well above the world average, Dr Chingosho said at the 44th AFRAA AGA held in Johannesburg from 18-Nov-2012 to 20-Nov-2012. “The excessive airport taxes, charges and fees being levied on airlines and passengers, in addition to the generally high cost of operations, is making African airlines less competitive compared to their foreign counterparts,” he said. Dr Chingosho called for airports to set charges in consultation with airlines.
Airport taxes and charges holding back African airline growth
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The surprise departure of Flybe CEO Saad Hammad on 26-Oct-2016 "by mutual agreement" raises questions about the future strategic direction of Europe's largest regional airline. Mr Hammad joined in Aug-2013 and implemented a restructuring programme, returning Flybe to profit in FY2016 (March year end).
Capacity reduction during the restructuring has been followed by a period of accelerating growth. So much so that Flybe is Europe's fastest-growing airline group among the top 20 in Europe by seat numbers this winter, with an increase of 19%. CAPA has identified 45 new Flybe routes in calendar 2016 (compared with a late summer total of 165), on the majority of which Flybe has no airline competitor.
Despite low competition on its network, Flybe's FY2016 operating margin was one of the lowest among listed European airlines and coincided with weakening unit revenue. Pricing has softened further, not least due to uncertainties such as Brexit, just as Flybe's capacity growth has accelerated.
Until a replacement for Mr Hammad is found, Flybe's Chairman Simon Laffin will assume executive responsibility. Significant strategic change may be unlikely in the interim, but a key question for the next CEO will be whether to continue with such aggressive capacity growth in the face of falling fares.