Tue. Jun 2nd, 2020

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African Governments Struggle To Turn Around Loss-Making Airlines

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NAIROBI/JOHANNESBURG – Governments from Kenya to South Africa are struggling to turn around loss-making state-owned airlines through restructuring or by bringing on board private partners.

Ethiopian Airlines has bucked the trend, providing a model that others hope to emulate.

Following is a summary of the financial position of major African airlines:

SOUTH AFRICAN AIRWAYS

State-owned South African Airways (SAA) has not made a profit since 2011. It has made losses of more than 5 billion rand ($340 million) for each of the past three financial years, according to company documents reviewed by Reuters.

South Africa’s President Cyril Ramaphosa instructed the government to put SAA into a business rescue – South Africa’s form of bankruptcy protection – after an eight-day strike in November left it close to collapse. He said on Monday it was the “only way to secure its survival”.

NUMBER OF DESTINATIONS: 32

PASSENGERS CARRIED: 6.8 million passengers in 2016/2017

KENYA AIRWAYS

The airline reported revenue of 114.45 billion shillings ($1.1 billion) for the year to December 2018, up from 106.17 billion a year earlier, while narrowing its pretax loss to 7.59 billion shillings from 9.44 billion.

NUMBER OF DESTINATIONS: 54

PASSENGERS CARRIED: 4.84 million

ETHIOPIAN AIRLINES

The airline posted operating revenue of $3.9 billion in its 2018/19 financial year, up from $3.3 billion a year earlier. Its net profit rose to $260 million from $207.2 million.

NUMBER OF DESTINATIONS: 143

PASSENGER NUMBERS: 12.14 million

AIR TANZANIA

It posted a net operating loss of 16.21 billion shillings ($7.1 million) in 2016/17 (July-June), down from a loss of 38.72 billion in 2015/2016, according to the latest report from the government’s chief auditor general.

NUMBER OF DESTINATIONS: 19
PASSENGER NUMBERS: Not disclosed.

AIR ZIMBABWE

The airline owes creditors $350 million and has not published financial results in nine years. Its monthly losses totalled $2 million in 2017, government figures showed.

FLEET SIZE: 6 (Only one in service)

UGANDA AIRLINES

The revived national carrier made its maiden flight in August. Expected operating costs are $70 million over the next two years, Chief Executive Ephraim Bagenda told Reuters.

Uganda Airlines was liquidated in the 1990s under a programme to privatise troubled state firms and open up the economy to private enterprise. But last year officials started pursuing plans to relaunch the airline to share in East Africa’s growing aviation business.

NUMBER OF DESTINATIONS: 7

PASSENGERS CARRIED: Not disclosed

EWN

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