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EgyptAir, SAA And Ethiopian Detail Co-operation Scheme

posted Nov 29, 2010, 12:34 AM by Elaine Bell

By Victoria Moores



EgyptAir, South African Airways (SAA) and Ethiopian Airlines have joined forces in an informal co-operation which could ultimately lead to equity investments in smaller carriers.

Both EgyptAir and South African Airways are members of Star Alliance, while Ethiopian Airlines is preparing to join, but EgyptAir chairman Hussein Massoud insists the partnership extends beyond their alliance ties.

"It started even before even Ethiopian Airlines announced its plan to join Star Alliance; we started talking more than a year ago," said Massoud, speaking to ATI at the African Airlines Association annual general assembly in Addis Ababa. But he adds that a Star representative is helping the partners with co-ordination and facilitation.

Through the informal tie-up, the three airlines will see where they can make their African coverage more complete. They plan jointly to fill network gaps and offer connections to countries with weak carriers or no air links.

"We are the three biggest airlines on the continent," says Massoud. "A lot of destinations, especially in central and west Africa are not covered, and if passengers want to get from 'A' to 'B' they need to go via Amsterdam, Brussels, Paris or wherever. We feel guilty about this and we want to do something about it."

The three African majors are also planning to help smaller carriers via partnerships and joint ventures. "Why create new airlines when we can work together to strengthen the ones we have?" says Ethiopian Airlines chief executive Girma Wake.

"We are working to see how we can support the regional airlines which already exist. We are beginning to start working together so connecting in Africa will be easy."

Wake says some of the smaller carriers were initially resistant to the idea: "There was that type of feeling, but we have talked to each of them and now smaller carriers are convinced that they have something to benefit from this."

EgyptAir, Ethiopian and SAA are "definitely not" looking at an equity partnership, says SAA chief executive Siza Mzimela, although she adds: "It may include [the three carriers] taking equity stakes in smaller airlines."

She uses Togolese carrier ASKY, which is already part-owned by Ethiopian Airlines, as an example of where EgyptAir and SAA could get involved in some capacity. But she also notes that partnerships with smaller carriers could simply take the form of shared expertise in areas such as fleet planning.

Mzimela says the group has already identified "one or two" potential opportunities, although these are yet to be finalised.

Massoud from EgyptAir says the three airlines have already been approached by The Economic and Monetary Community of Central Africa (CEMAC), which previously had aspirations to create pan-African carrier, Air CEMAC, in partnership with Royal Air Maroc.

"We have been approached by CEMAC to see if we can help as a group. It is now under discussion, but we don't know the result yet and it is too premature to announce anything. The baby is not yet born and the shape is not even clear, but the discussions are ongoing," he states.

SAA's Mzimela concludes: "It is quite a big change in attitude for us to all agree, but all three airlines are totally committed and serious about doing these things. We need to sit down and figure out what will work. Some things might give one airline greater benefit than the other two, but we are not worried about that."