Kenya Airways plans to sell 15% of its 49% stake in PrecisionAir to investors in Tanzania by the end of 2010 (All Africa, 12-Jul-2010). The IPO will increase Tanzania's ownership of the carrier from 51% to 66%, leaving 34% with the airline. The shareholders have made an application to the Tanzania Capital Market and Securities Authority to authorise the airline to list on the Dar es Salaam Stock Exchange (DSE). PrecisionAir has already finalised discussion with the DSE for listing on the bourse.
Kenya Airways to sell 15% of 49% stake in PrecisionAir
You may also be interested in the following articles...
Africa Fleet Outlook: Illustrates Continuing Under-achievement
African airlines currently have less than 150 aircraft on order compared to an active fleet of approximately 1,600. In the neighbouring region of the Middle East, there is a similar sized fleet but 1,400 orders. Fast expansion from Middle East airlines have made it extremely difficult for African airlines to compete. But this is hardly an excuse for African airlines falling short; over many decades they have demonstrated their capability to do that without any help from outsiders. Given the diverging order books of the two regions the outlook for the African airline sector remains relatively bleak.
Airline disruption: it will happen in the next decade - but no one is preparing for it
Why so unprepared? It seems inconceivable that the structure of an industry with so many artificial constraints can remain intact much past 70 years, while all around it has changed.
This decade alone has been witness to major disruptions in the travel and transportation industries. Most prominent have been in ride sharing – Uber – and in hospitality – Airbnb. Telecommunications, media and music industries have also been turned on their heads; banks and payments are in the firing line; retail generally is being rapidly transformed. There is scarcely an industry whose fundamental structure remains intact. Except the airline industry.
In all cases disrespectful startups, usually applying relatively simple but sophisticated IT solutions, have taken on legacy operations. The legacy industries under attack typically involve extensive capital investment, and are often characterised by significant, unhelpful, and highly intrusive government regulation that restricts competition.
Certainly the legacy airlines have had to deal with a new breed of low cost operations, long and short haul. But almost without exception those legacy operators are still there, fundamentally unchanged.
In terms of other industries, this is no more than fiddling around the margins. And time is running out.