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African governments struggle to turn around loss-making airlines
Kenya Airways planes are seen parked at the Jomo Kenyatta International Airport near Nairobi, Kenya, November 6, 2019. PHOTO BY REUTERS/Thomas Mukoya
09/12/2019
(Reuters) - 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".
FLEET SIZE: 48
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.
FLEET SIZE: 41
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.
FLEET SIZE: 116
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.
SIZE OF FLEET: 7
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)
NUMBER OF DESTINATIONS: 4
PASSENGER NUMBERS: 230,000
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.
FLEET SIZE: 4
NUMBER OF DESTINATIONS: 7
PASSENGERS CARRIED: Not disclosed
(Reporting by Omar Mohammed in Nairobi, Elias Biryabarema in Kampala, Fumbuka Ng'wanakilala in Dar es Salaam, MacDonald Dzirutwe in Harare and Alexander Winning in Johannesburg; Writing by George Obulutsa; Editing by Emelia Sithole-Matarise)
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