Cote d'Ivoire

EgyptAir grows its hub role, expanding 60% in Africa as European tourism slowly recovers

EgyptAir is pursuing rapid expansion in Africa as it looks to drive further increases in transit traffic, which has helped the carrier recover from the crisis of early 2011. The Star Alliance carrier expects to post a break-even result for the fiscal year ending 30-Jun-2013 (FY2013) and be back in the black in FY2014, featuring a vastly different and more balanced network than it had prior to the Jan-2011 revolution.

Over the last two years EgyptAir has more than doubled its international capacity within Africa, albeit from a modest base. The increased focus on Africa will continue in 2H2013 as four more destinations are added.

Africa and a bigger operation in the nearby Middle East has helped EgyptAir reduce its reliance on Europe in the aftermath of the crisis, which led to a significant drop in inbound tourist traffic. The larger regional network also has supported a significant increase in transit traffic, from only 3% prior to the crisis to about 17% currently. The increase in transit traffic along with more local traffic within the Middle East/Africa region, where demand has been rising rapidly, significantly improves EgyptAir’s outlook.

African airline start-ups hold the key to unlocking the continent’s riches

Africa’s potentially rich aviation pickings are attracting a new breed of start-ups. Some, like Starbow and FastJet, have ambitions to develop pan-African networks through franchise models. Others, including Africa World Airlines and Korongo Airlines, are focused on their domestic markets and regional services to neighbouring states. Yet a third grouping, led by ECAir, have established inter-continental operations.

While several of the start-ups are backed by their respective governments, it is notable that the strongest contenders are either largely or wholly privately owned and funded.

This new generation of carrier could provide the answer to Africa’s lack of domestic and intra-continental air services by increasing route options, lowering fares and making air travel affordable to the growing middle class.

Aviation enjoys a natural advantage as a means of connecting cities, where most of Africa suffers from poor or non-existent ground transport infrastructure.

New national Air Côte d’Ivoire plans domestic and international route launches this year

Côte d’Ivoire’s new national carrier, Air Côte d’Ivoire, has been formed in a partnership with Air France and the Aga Khan Fund for Economic Development (AKFED) and is due to launch international services by the end of Jul-2012 and domestic routes later in the year.

The Côte d’Ivoire Government will control 65% of the carrier with another 20% controlled by Air France and the remaining 15% held by AKFED through an airline holding company, Aérienne de Participation-Côte d’Ivoire. Initial capital was set at XOF2.5 billion (USD4.9 million) and will rise in the short term to XOF25 billion (USD48.6 million).

State ownership will reportedly drop to 51% once the capital raising is complete, with private investors taking the 14% stake in the airline. Air France initially was to control 35% of the carrier, but in early 2012 AKFED agreed to take a 15% stake.

The hope is that the founding of the airline will be a watershed for aviation in the small West African nation, which has been without a national carrier since the bankruptcy and collapse of Air Ivorie in 2011.