Kenya Airways CEO Titus Naikuni reportedly proposed a merger between Kenya Airways, Ethiopian Airlines and South African Airways (SAA) to compete with larger foreign airlines (The Reporter, 01-Dec-2012). Ethiopian Airlines CEO Tewolde Gebremariam reportedly agreed with the proposal in principle.
Kenya Airways CEO proposes merger with Ethiopian and SAA
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Africa Outlook: Ethiopian Airlines and Air Mauritius grow, but others face strong headwinds
Africa is a region of huge opportunity - as has been observed for decades - but even bigger challenges. Africa’s airlines continue to struggle and collectively remain in the red while airlines in every other region in today’s favourable environment are profitable.
Structural changes and a new mindset from African governments are desperately needed. Political interference and government meddling in airlines is a common problem, as well as protectionism and unnecessarily high taxation.
In this report CAPA looks at the continued struggles of South African Airways and the new business models being pursued by Air Mauritius and TAAG – both of which are keen to develop new transit hubs. Ethiopian’s rapid growth and remarkable success highlight the opportunities in Africa that can be exploited with the right strategy.
Mauritius Pt 2: Air Mauritius faces intensifying competition and challenges in developing a new hub
Air Mauritius has returned to profitability and is keen to pursue expansion in support of an ambitious hub strategy by its government shareholder. The airline turned an EUR18 million operating profit in the year ending Mar-2016 as passenger numbers grew by 9.4% - representing the fastest growth in five years.
Mauritius is geographically well positioned to attract sixth freedom traffic between Africa and Asia, a fast-growing market. However, competition is intensifying in the Africa-Asia market and in Mauritius, which could make it difficult for Air Mauritius to succeed at developing a new east-west hub while maintaining its new-found profitability.
This is the second part of an analysis report on Air Mauritius and the Mauritius market. The first report looked at Air Mauritius' expansion in Asia, and the need to bolster its network in continental Africa in order to secure more sixth freedom traffic between Asia and Africa. It also examined the impact of AirAsia X’s Oct-2016 launch of services to Mauritius. In this half of the report CAPA will look in more detail at the intensifying competition in the Mauritius market; how this may impact Air Mauritius’ new-found profitability and its ability to further develop an Africa-Asia hub.