Ethiopian Airlines

Airlines in Transition 5. Lighting Candles: Innovating to make profits: Big Data, Advanced Analytics

“It is better to light a candle than to curse the darkness” – Confucius

The size, variety, speed and complexity of data available to the airline industry is growing rapidly, as with other industries. The importance of data use, the roles of intermediaries, the arrival of new players into the aviation data arena – such as social media, Google and Apple – and developments in consolidation, partnerships and collaboration along the supply chain make innovation essential.

Moreover, airlines need to work with airports, to facilitate connections and passenger flows, to reduce costs and to enhance revenues; and with IT solution providers to improve data interfaces across the “aviation ecosystem”, to improve efficiency and to enhance the revenue-generating opportunities arising from data sources. In this fifth report on CAPA’s Airlines in Transition conference, we examine the framework presented by airline strategist Nawal Taneja and the subsequent panel discussion.

Ethiopian Airlines expands its global footprint to link the world's high growth regions

Ethiopian Airlines will extensively expand its network in 2013, adding Asian destinations as well as increasing its footprint in Africa and linking the two high growth regions to South America.

In Africa, Ethiopian added flights to Blantyre in Malawi and Ndola in Zambia on 31-Mar-2013, increasing its African network to 45 destinations, including 16 domestic points. The carrier also has begun negotiations with the Malawi Government to take a 49% strategic stake in failed flag carrier Air Malawi after being selected as the preferred bidder among eight chosen applicants.

The Asian network will be expanded with the addition of Ho Chi Minh City, Manila and Seoul Incheon in Jun-2013 operating from Ethiopian’s existing Asian hubs, Hong Kong and Bangkok. And Ethiopian will become the first African carrier to take advantage of the natural transfer traffic synergies that link the three regions, and form part of its strategy to develop its Addis Ababa base into a Dubai-style hub of Africa.

RwandAir moves to expand its network as new aircraft join the fleet

RwandAir will focus on route and fleet expansion in 2013, launching direct services to Accra, Douala and Juba coinciding with the delivery of new Boeing 737-700 aircraft and the introduction of a revised schedule at its congested Kigali hub.

RwandAir has reportedly recorded strong growth in recent years, including a 67% increase in passenger numbers in 2012 and increasing revenue by 60% compared to 2011 without increasing capacity.

The state-owned carrier’s CEO John Mirenga said in Jan-2013 that he was "hopeful" the airline will be profitable by 2015, at which time Rwanda's Government may consider selling down part of its holding in the carrier to private investors with a view to a possible stock exchange listing by 2020.

Mr Mirenga expects the airline will handle about 600,000 passengers in 2013, a 50% increase on 2012. The carrier does not expect to increase revenue by the same margin due to the pressure on fares.

The airline said in Nov-2012 it plans to expand its fleet from seven to 17 aircraft over the next five years and commence services to Europe and China in 2015.

Kenya Airways boosts China services, with new Etihad codeshare, but has political and economic risks

Kenya Airways will boost capacity to China and switch its Nairobi-Bangkok-Hong Kong service to instead transit via Dubai from Apr-2013 as the airline seeks to take advantage of growing Chinese interest in Africa’s economic growth prospects.

The airline's overall Nairobi-Dubai frequency will increase from daily to 10 times weekly. The carrier will also add three weekly frequencies on its Nairobi-Bangkok-Guangzhou service moving to a daily service.

Kenya Airways CEO Titus Naikuni said China has been looking for economic opportunities in Africa and the daily service will facilitate movement of traders and goods between these regions, noting: “This daily service will contribute towards sustainable development in Africa by linking it to the rest of the world".

This, combined with an extensive codeshare agreement with Etihad, means Kenya Airways is well positioned to advance its 10 year growth plan and position Nairobi as the Eastern African hub over Addis Ababa, particularly addressing China as well as Indian markets.

Kenya Airways-Etihad alliance will create a powerful force in Eastern Africa, challenging Ethiopian

Africa's airline industry may not be large, but there is no shortage of activity as growing interest in the region's natural resources piques global attention.

Now Etihad Airways, which has consistently pursued an active alliance strategy, has concluded a reciprocal code share agreement with Kenya Airways, giving access to each others' networks and paving the way for greater collaboration and cost savings.

Kenya Airways will launch a new three-times weekly Nairobi-Abu Dhabi service from about Jul-2013 to improve connections in support of Etihad’s current daily service. The alliance is the latest from Etihad to cut across marketing alliance boundaries: Kenya Airways is a member of SkyTeam, complete with a 27% equity investment from KLM. Etihad and SkyTeam leaders, Air France-KLM concluded a "strategic alliance" in Oct-2012.

Air Algerie plans large fleet order and an increased long-haul network to boost Algerian economy

Algeria’s national carrier Air Algerie has announced plans to order 16 new aircraft as part of a government push to expand the airline’s international reach to attract investment and grow tourism – which lags well behind the rest of North Africa.

Air Algerie has ordered eight Boeing 787-8s, five 737-800NGs and three A330-200s. The 787s will replace three 767-300s as well as develop its long-haul network. The 737-800NGs will be used on domestic and regional routes on which Air Algerie enjoys a protected monopoly.

It is not clear whether all of the new 737-800NGs will be additional to the fleet or if some will be replacements for existing fleet of 22 737s, which includes five 737-600s and 17 737-800s manufactured between 2002 and 2011.

The A330-200s will be additional to the five A330-200s already in the fleet and will be used to open new long-haul routes to Johannesburg, New York, Sao Paulo and Shanghai.