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Three African Airlines To Form New Carrier

posted Sep 30, 2010, 5:06 AM by Temp User

Three of Africa’s leading airlines are in talks to establish joint ventures, and could launch their first collaboration in Central Africa early next year.

Details are still being negotiated, although the CEOs of Egyptair, Ethiopian Airlines and South African Airlines tell The DAILY they expect a formal announcement in the coming months. Egyptair Chairman and CEO Hussein Massoud also says the first venture should launch early next year.

All three executives were in Addis Ababa to celebrate Star Alliance’s formal acceptance of Ethiopian’s application to join the airline group. The three said they would discuss their proposed ventures after the event.

Central and West Africa are the group’s primary concern, and the first venture will be located in one of the six central nations—Cameroon, Central African Republic, Chad, the Democratic Republic of Congo, Equatorial Guinea and Gabon—because the region has a more advanced aviation sector, says SAA CEO Siza Mzimela.

Mzimela adds that this company will be a new airline, although she confirms that future ventures could include investment in existing airlines.

She also confirms that any new entity will focus on intra-African traffic. “There is little feed or de-feed in the region,” she notes. None, for now, will adopt a low-cost model, she adds.

Various business models are being considered, and while Ethiopian CEO Girma Wake noted the potential for direct investment akin to his airline’s involvement with Togo startup ASKY, Mzimela notes that their participation could include non-monetary support.

Egyptair’s Massoud also confirmed the airlines could provide aircraft from their own fleets, although he stressed that many options were still being discussed. “Africa is too big for five or six carriers,” says Wake. “The three of us are working together, so we can create a critical mass.”

The Star Alliance acceptance yesterday of Ethiopian is an “integral part” of Star’s expansion across the continent, which already includes Egyptair’s and South African Airways’ networks. “Demand will mainly stem from economic growth made possible by increasing political stability and creating a better business climate,” said Star CEO Jaan Albrecht. “Moreover, we will in future have three main hubs in Africa—Addis Ababa, Cairo and Johannesburg.”

Star’s CEO also noted an area in Central Africa that is unserved by Star, which he expects to be resolved by Ethiopian’s addition. This proposed expansion is in addition to the 24 new destinations Ethiopian brings to Star’s network.

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 By Darren Shannon