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P.O. Box: 19002 – 00501 Nairobi, Kenya
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Precision Air Services
Kenya Airways is the national airline of Kenya. The carrier is based at Jomo Kenyatta International Airport, Nairobi, and operates an extensive network of regional services within Kenya and Africa as well as flights to Asia, the Middle East and Europe. Kenya Airways became a member of SkyTeam in Jun-2010.
Location of Kenya Airways main hub (Nairobi Jomo Kenyatta International Airport)
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664 total articles
48 total articles
Zambia's booming economy increasingly reliant on Kenya and Ethiopian Airways. A flag carrier needed?
As southern Africa enjoys a commodities boom, Zambia, like its neighbour Zimbabwe lacks an international airline of its own, leaving the country reliant on a small number of foreign airlines to provide connections to tourism markets and trading partners. British Airways' decision to pull out of Zambia in Oct-2013 after 80 years of service is a considerable blow to European connections. BA will redeploy the capacity to Ghana where greater returns are in view following Virgin Atlantic's withdrawal.
Privately owned Proflight Zambia operates a domestic network in Zambia and the seemingly prudently run airline has regional expansion plans, but is unlikely to be able to extend its business beyond Africa in the foreseeable future.
Zambia’s Government has been attempting to negotiate a funding deal to relaunch a flag carrier to replace Zambia Airways, liquidated in 1995 after 31 years' operation. However, the unhappy history of African governments meddling in the affairs of their national carriers means private investors are reluctant to become involved. Meanwhile, Africa's hub carriers like Kenya Airways and Ethiopian Airways are increasing service.
Africa’s unenviable record of government interference in the continent’s aviation system is demonstrated by no less than nine carriers currently surviving at the behest of their respective governments through a variety of financial support mechanisms collectively worth about USD2.5 billion.
In most cases this support serves only to distort any prospect of a level playing field, preventing privately owned carriers from competing effectively. Nigeria is even taking this a stage further as state support of private carriers is being undermined by a desire to relaunch a government owned national flag carrier. In other cases, such as Uganda, new state-owned airlines are planned to compete with successful privately owned operators in markets that often lack sufficient demand to support them both. Whatever the motives, and many of them are questionable at best, the outcome is sadly predictable.
In most cases Africa’s national carriers suffer at the hands of government mismanagement and interference, key among them is the continent’s largest airline, South African Airways (SAA) which is the subject of the biggest turnaround plan currently under way. This could offer a vital precedent if it succeeds - and if it doesn't.
Cameroon’s overall aviation market has grown by 46% in the year to Sep-2013, driven by an influx of Western African carriers competing on regional routes and national carrier Camair-Co adding 77% to its domestic capacity.
The bulk of the growth has come from Western and Central African carriers including Karinou Airlines from the Central African Republic and Rwandair, while Turkish Airlines has provided the country with its third European link.
Camair-Co continues to hold a monopoly, but profitability remains elusive and the Cameroon Government in Sep-2013 replaced CEO Matthijs Boertien after just nine months in the job, naming a former finance minister as chairman to lead a turnaround and to find an investor willing to take a 51% stake in the carrier.
Nigeria’s aviation transformation programme is making good progress with the government’s extensive airport renovation project of 22 federal airports reaching the half-way stage and the remaining 11 airports to be remodelled by 2015.
Foreign carriers, attracted by Nigeria’s 170 million population and economic potential are also bringing in more capacity, in particular Ethiopian and Emirates, while Arik and Gol are preparing to reopen a direct link between Nigeria and Brazil for the first time in about 20 years.
But domestic carriers continue to struggle under the burden of massive debt, high operating costs and the prospect of increased competition from a proposed new national carrier and potential start-ups.
Air Zimbabwe is about to move into the next phase of its rebuilding programme with the launch of three more regional services and its first long-haul service to London since the carrier was grounded under a mountain of debt in Jan-2012.
The Zimbabwe flag carrier plans to commence regional services from its Harare hub to Lusaka, Zambia and Lilongwe, Malawi, as well as to Durban, South Africa in Oct-2013. This will be followed by the resumption of service to London Gatwick in Nov-2013 with refurbished 767-200s.
Air Zimbabwe relaunched in Nov-2012, operating Harare to Johannesburg followed by domestic services from Harare to Bulawayo and Victoria Falls in Apr-2013. As part of a recovery plan the workforce has been cut from over 1,000 to about 300 and fares have been slashed as part of a three month campaign to restore public confidence the carrier which previously linked Zimbabwe to its neighbours as well as Europe and Asia.
Tanzania’s largest carrier, Precision Air has belatedly reported a TZS30.5 billion (USD18.9 million) loss for the financial year to 31-Mar-2013, compared to a TZS633.8 million (USD392,814) profit in the year prior. The poor result is largely due to Precision’s over-ambitious expansion during FY2012 which saw the carrier lease three Boeing 737-300s to operate regional routes, including Dar es Salaam to Johannesburg.
The situation has been compounded by a disappointing initial public offering in Nov-2011 which raised less than half the TZS28 billion (USD17.3 million) sought to pay for Precision’s fleet and route expansion plans. The carrier listed on the Dar es Salaam Stock Exchange (DSE) in Dec-2011. The arrival of LCC fastjet on two key domestic routes, forcing down fares, has also had an impact.
Precision is now urgently seeking a USD32 million bailout from the Tanzanian Government and other investors to meet bank and aircraft loan payments. A request to the government for a USD4 million capital injection was reportedly rejected earlier this year. But the government could be persuaded to take an equity stake in Precision to ensure air access to outlying regions is maintained.
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