Africa is full of interesting airline stories. Ben recently wrote about the comical situation of Air Zimbabwe and their missing 777, as well as the promising progress RwandAir has made in acquiring an A330neo to start flights to New York. Last month Ben wrote about how the Nigerian government planned to start a national airline,…
Continue reading: Ethiopian Airlines Wants To Help Launch Nigerian Airline
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Fairly wealthy? Need i remind you Nigeria is Africa's largest economy. We also defined have bo shortage of wealthy individuals and businesses.
The Nigerian airline market is right now going through some turmoil. In addition to this airline, there are 2-3 others attempting to launch. Each is essentially backed by a different wealthy Nigerian business person and a different government official who they need to support them. Regardless of the official say in operations, government officials have full power to make the business financially viable or politically in feasible.
Ethiopian through Asky in particular has created the most credible demonstration of how new airlines can be successful in without government sponsorship, so I hope they win the proposal!
I honestly hope ET has luck with this investment. I’d be very sad to see them go the Etihad way.
A few comments :
1) The government of Nigeria already owns equity in a handful of airlines as public-private partnerships. These include Arik Air which reached the point of near insolvency at which time it was partially nationalised (some assets taken over by Asset Management Corporation of Nigeria – AMCON) to prevent a complete shutdown as it was deemed a strategic national interest and “too big to fail”.
2) The Government of Nigeria actually approached ET after AMCON’s takeover of Arik’s assets with a proposal for ET to take over management of Arik. It was evaluated at the time and ET walked away as they felt that the rot at Arik was too deep. However, ET has to keep the Nigerians friendly as Nigeria is a huge source of ET’s revenue (they fly to Lagos, Abuja, Kano, Kaduna and Enugu) and in the past they have been restricted from repatriating their earnings out of Nigeria when they have upset the Government. Whether this is simply one of those moves to appease the Government of Nigeria by indirectly lending their name to the venture at the beginning to build credibility, or whether they genuinely intend to be involved as a minority stakehoulder, remains to be seen.
3) ET’s strategy of partnership/investment in other African carriers to support the “multiple African hub concept” has been around for 15 years since the days of Ato Girma Wake. Tewolde has inherited and built on the strategy (he was part of the Executive Team too back then although not in charge of this area – Tewolde was in marketing while Kinfe Kahssaye drove their strategic projects). Their initial plan was an investment/strategic partnership with Ghana’s new national airline in 2004-5 which was fully negotiated and ready to close, but that deal fell through at the last minute due to local Ghanaian politics. They then moved their focus to Togo next door and the result was ASKY which has grown from strength to strength, but with very strict Ethiopian management control. Malawian Airlines is another carrier where ET maintains strict management control despite a minority stake. Other deals in Africa have fallen through over the issue of management controls – ET has shown its willingness to walk away if their conditions are not met. Tewolde is no fool and despite the huge expansion of ET under his watch, is actually a very conservative manager with a low risk appetite. The anti-James Hogan if you will.
4) Of the airlines you listed, only ASKY and Malawian are actually operating. The "partner" airlines in Guinea, Chad, Congo and Zambia are either dead in the water or still to launch.
I won't fly it, have had my share of African airlines of the previous generation, Air Afrique, Cameroon Airlines, Air Madagascar (a survivor...), Air Gabon and the like but it is true that Ethiopian is probably the only engine with a chance to reactivate African Airlines. They have been VERY disappointed with Asky ( but who wouldn't given the Togolese corruption and inefficiency) and have still managed to keep it afloat.
Nigeria is better placed than Togo to route long haul flights from Addis to North America via Lagos, and if anybody can handle the Nigerians, it is Ethiopian.
Pan Am (remember them?) had a wonderful announcement touching down in Lagos on their JFK-Dakar-Monrovia-Lagos-Nairobi... "Transit Passengers may disembark if they wish to do so but we advise them not to". A favorite trick to accomodate overbooked Nigerian passengers was for the airport police to seize transit passengers under some pretext and to give their seats to those individuals for a bribe.
I was talking to a Nigerian airline executive just a few weeks ago and he said they were "very close" to getting the national airline up and running. We just happened to cross paths while traveling in a third country - I have no specific insights on this, but am watching closely. Nigeria would indeed be a huge market for a well run airline if politicians and cronies can be kept at arms length. Its middle class is larger than the entire populations of quite a few European countries. When I was in Israel and West Bank a few months ago, it seemed several times there were more Nigerian tourists than Westerners around. Lagos-Tel Aviv will be an excellent route, I predict.
I think Ethiopian should first work on their own internal management as they are one of the most disorganised airlines I've ever flew in my life. Their airport transiting process is very inconvenient and most of their employees are also lost. I missed my flight because I was told wrong infos by 3 different employees and Bole airport doesn't have PA anmouncements, their TVs don't display the correct information or one is about flights are missing. The employees are very rude and bottom line disrespectful to passengers and they storm off while you are still talking to them or trying to communicate with them at the counter. I can't imagine how disorganised the other airlines they are trying to start up will be, where many of their operations have many flaws that really negatively affect the passenger's experience. I recently flew with them, and had the worse expensive of my life, and I wrote an article about it, and hoped to share it with people, but I haven't figured out how to do that yet. However, to be fair, I think the airline is growing, and they have good business strategies, which is really important to any airlines. But I just truly feel they are really lacking the effort in making the passenger's expensive on board and at the airport acceptable, and also their own reservations systems and their websites.
@Junse You are absolutely right, but in spite of all this, they are by far the best and most efficient airline in Africa.
@Junse - I have flown nearly 200 sectors with Ethiopian in the last 5 years and cannot disagree with you more. Ethiopian is one of the best managed airlines in the world - their success and profitability are evidence of this. Certainly, their Addis hub is infrastructurally constrained until the new terminal is ready and can result in a sub-obtimal experience for non-status/economy passengers, but the fact that you (and your bags) can still make 20 minute connections there in the middle of a hub bank without breaking too much of a sweat is remarkable. There is nothing fancy about flying with Ethiopian, but they will usually get you safely and reliably to your destination more or less on time - which is better than any other airline in the region is able to do.
If ET can control the dominant hub in West Africa as well as its existing East African hub, it will have a choke hold on the continent. It would also suit Nigeria for Lagos to become the major hub.
One could see Royal Air Maroc also being interested though.
A strong and reputable Nigerian Carrier, especially on the international sector is long overdue and intra-African connectivity is key to the growth of the African economy. It will take experienced and successful airlines to assist and build Nigeria Air. Ethiopian is a successful African & International Carrier and Qatar is one of the Top 10 Airlines in the world. I wish them both "Good luck" in their bids. The winner will need experienced executives in the industry to help with the launch activities and lay the foundation for success and either Carrier will be able to attract the right candidates.
YES! I will fly Nigeria Air as I have full confidence in the commercial and business acumen of either Ethiopian or Qatar Airways. Go Nigeria Air Go!
Is there any chance that these ET partner airlines flights eventually can be purchased with Star Alliance miles? I’m hoping to fly with the new Chadian airline in 2019. The flight is purchasable on ET’s website with an ET flight number using money but currently not miles.
@ AM do you mean using ET miles? The partner flights should be bookable with those miles but not with other Star partner miles (ie United miles).
I was hoping for United miles, but when I try to buy with Sheba Miles, the flight doesn’t come up at all on ET’s website (and I doubt the award seats are sold-out because it’s 8 months away and an obscure route: NDJ to NIM on July 4).