African carriers bank on interline pacts, networks to remain afloat

Saturday January 08 2022
Africa carriers

South African Airways and Kenya Airways are close to establishing a joint African airline next year after the carriers signed a Strategic Partnership Framework in South Africa in November. PHOTO | FLICKR


African airlines are banking on inter airline agreements, expansion of networks, and cargo lines to remain afloat in 2022 even as pandemic restrictions continue to nibble away at their bottom lines.

Kenya Airways (KQ) is banking on its agreement with South African Airways (SAA) to have a better year, as its main competitor, Ethiopian Airline looks at its interline agreement with Airlink (4Z), an airline based in Johannesburg, South Africa, and the revamping of several African airlines as its source of traffic and growth this year.

Uganda’s national carrier the Uganda Airlines, on the other hand, is pegging its growth on route expansion, a process that was thwarted for nearly two years by the Covid-19 pandemic.

Jennifer Bamuturaki, the airline’s interim chief executive officer told The EastAfrican that currently, verification teams are doing feasibility studies on eight potential routes in the Middle East, Europe, Asia, West and East Africa, a process that will conclude this month.

By the end of 2021, the airline had planned to fly to at least 18 routes on its schedule, but is currently behind by seven routes.

“We have gone back to the drawing board because we want to make sure that we are flying routes that are commercially viable.


‘‘Even for those that were planned for earlier, we are going back into feasibility studies because the market landscape and the traffic flows have changed,” Ms Bamuturaki said.

These studies, which will inform the management’s decision on which routes to fly, will identify top markets, traffic destinations, new routes and other market needs.

Currently, the airline flies about nine regional routes out of the 16 that were on the initial regional master plan at its revival two years ago. These are Dar es Salaam, Juba, Kilimanjaro, Mogadishu, Mombasa, Nairobi, Zanzibar, Kinshasa and Johannesburg.

According to Ms Bamuturaki, the airline is looking at linking traffic from West African cities like Abuja, Lagos and Accra to its London and Dubai routes this year. Other additions will be Lubumbashi, Goma and Kisangani.

The pandemic forced the airline to reduce frequency on routes like Juba, Mogadishu and Nairobi from two to three flights a day, to one.

This year, it has drafted a new schedule that will see the frequency on these routes gradually increase.

“This new schedule will improve our aircraft utilisation. In April, we shall release a schedule that has more connectivity for places like Zanzibar, Mombasa, Juba, Mogadishu, Dubai, and Kinshasa,” Ms Bamuturaki said.

In October last year, the airline launched its first intercontinental flight to Dubai, which has been one of its most lucrative, but a recent ban on passenger services from Uganda to Dubai means the airline can now only rely on cargo, thus a dip in its revenues.

State support

Officials note that its capacity to haul cargo is getting better and revenues increasing. Initially, cargo fetched around $13,000 a week, and that has now risen to between $30,000 and $45,000. The target is between $70,000 and $100,000 per week.

Uganda Airlines is currently using four Bombardier CRJ900 craft for regional routes and two newly acquired Airbus A330 Neo craft for long-haul flights.

The airline had planned at least three long-haul routes by the turn of 2021 after it acquired its two Airbus A330 Neo, but these plans were thwarted by travel restrictions and delays in clearance.

Ms Bamuturaki said that while the current fleet can support this year’s planned expansion since the fleet is underutilised, the airline needs a bridge type of craft between the CRJ900 and the bigger Airbuses on particular routes.

The government says it is ready to lend its support.

“We will definitely need an aircraft that will do a range to destinations like Lagos, Johannesburg, and Accra without limiting baggage or numbers,” she said.

The craft that could fit this role are the A220-300 from Airbus and E195-E2 from Embraer with Airbus being the most likely contender for the contract given Uganda Airlines’ eagerness to maintain manufacturer commonality.

The airline is this year also looking at extra revenue sources to increase its purse.

“Most of the revenue we make goes to operation costs but when it comes to huge costs like the wage bill, the government still supports us.

‘‘We are making sure that we get to a point where we are independent or reduce the financial burden on the government,” she said.

Some of the extra revenue sources the airline is banking on include ground handling with its newly recruited team currently in training; reservation systems with external players, baggage and private charters.

The airline is also holding talks with established players to sign interline agreements like Ethiopian, Qatar, Emirates, Fly Dubai, and KLM, however, many are requiring that it first becomes a member of the IATA.

KQ and SAA also moved closer to establishing a joint African airline next year. This is after the two carriers signed a Strategic Partnership Framework in South Africa in November, in a move that will see the two carriers eventually form a Pan-African carrier.

The signing, which happened on the back of an official visit by President Uhuru Kenyatta to South Africa, will see the two carriers work together to increase passenger traffic, cargo opportunities and general trade by taking advantage of their respective strengths in South Africa, Kenya, and the continent in general.

It is expected the partnership will improve financial viability of the two airlines. Customers will also benefit from more competitive price offerings for both passenger and cargo segments.

“This co-operation aligns with Kenya Airways’ core purpose of contributing to the sustainable development of Africa and is based on mutual benefit,” said KQ chairman Michael Joseph in a statement in November 2021.

“It will increase connectivity through passenger traffic, cargo opportunities while enhancing the implementation of the Africa Continental Free Trade Area Agreement (AfCFTA),” he added.

They belong to different networks as Kenya Airways is a member of the Sky Team — second-largest airline network — while South African carrier belongs to Star Alliance, the largest of the three major aviation clubs with a membership of 28 airlines.

On December 31, President Uhuru Kenyatta said the airlines will combine assets to form a Pan-African carrier.

“To boost tourism, trade, and social engagement; and to bolster continental integration; our national carrier Kenya Airways will join hands with our partners in South Africa to establish a Pan-African Airline with unmatched continental reach and global coverage,” said President Kenyatta in his New Year’s Day address to the nation.

In 2020, South Africa granted Kenya Airways a third freedom right, allowing it to fly cargo from Johannesburg to other cities in southern African countries without returning to its hub in Nairobi.

Ethiopian on the other hand has been implementing various partnership agreements with African and global carriers to expand accessibility to its customers.

“The partnership with Artlink in particular will increase seamless connectivity options for customers in the regions of South Africa with the vast network of Ethiopian Airlines in the continent and beyond,” the airline said in a statement, adding that its connectivity options are crucial in fulfilling the increasing demand of its customers.

It added: “Airlink provides services between smaller, under-served towns and larger hub airports. Hence, through the interline agreement signed with Ethiopian, customers from southern Africa will benefit from more than 60 African destinations of Ethiopian.”

The Addis Ababa-based carrier has also partnered with CarTrawler, a leading provider of online car rental distribution systems, launching car hire and transfer services for its passengers globally. The partnership enables Ethiopian to offer seamless transport service to passengers throughout their journeys.

“We are glad to partner with CarTrawler, which enables our passengers to book car rental and transfer services at their destinations. As a customer centric airline, we always look for opportunities to maximise passengers’ comfort through end-to-end services which augment their travel experience. We have integrated the service digitally so that passengers can make their bookings through our website and mobile app from anywhere,” Ethiopian Airlines Group CEO Tewolde GebreMariam said.

The service will now enable passengers to rent vehicles from third-party vehicle rental suppliers and book ground transportation services including taxis and ride-hailing services, airport transfer services and chauffeur-driven vehicle rental, among others. Globally, CarTrawler offers attractive rates for car hire in over 30,000 locations in more than 145 countries, and with over 1,200 international suppliers.