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Is ASKY Airlines Setting a New Normal in Africa?

Is ASKY Airlines Setting a New Normal in Africa?

If you are familiar with the African aviation market, you would agree that air connectivity within the African continent is challenging. And if you are familiar with African aviation history, the name Air Afrique would certainly ring a bell. Similar to the Scandinavian multinational air carrier, SAS, Air Afrique was a multinational airline, owned by eleven West and Central African States.

The vision behind Air Afrique was ambitious, forward-thinking and brilliant. The reason for that being the very fact that many airlines have later formed alliances in order to gain access to much wider markets, to share a pool of resources to some extent and ultimately to benefit by association.

Unfortunately, the airline would suffer among other things from its multi-state ownership status and go bankrupt in 2002.

The Need for a Vibrant Pan-African Airline

The dismantling of Air Afrique did leave a tremendous void, which until recent years made air travel within West Africa even more difficult. In many instances, going from one country to another within the African region, required intercontinental flights to Europe and back to the African destination. Unfortunately, delaying a full implementation of the nearly 30-year old Yamoussoukro Declaration to open up the sky for the benefit of African States themselves, still maintains such an absurd way of air travel

alive and well. As a matter of consequence, travelling by air within Africa is often much more expensive than flying from Africa to other parts of the world. This reality needs to change, in order to allow African people and their respective countries to achieve their full economic potential; which one might add is huge beyond measure.

Africa is a rich continent, not just in natural resources, but more importantly in human resources and market opportunities. Now combine that with the catalytic power of aviation and you get a powerful economic engine, which has the potential to deeply transform the African continent to unbelievable heights of economic and social progress.

To fully grasp this viewpoint, one simply needs to consider how Gulf States such as the United Arab Emirates (UAE) and Qatar have harnessed the power of aviation to their economic advantage.

The Creation of ASKY Airlines

Gervais Koffi Djondo, Chairman of ASKY (Right) with Raphael Kuuchi, IATA VP for Africa. Photo Credit: ASKY Airlines

After Air Afrique ceased operations in 2002, there was an urgent need to establish a similar yet a much better structured airline to fill the void. The lessons learned from the Air Afrique venture clearly suggested that another multi-state owned airline was not a viable option.

Another obstacle to such a possibility was the fact that some of the major stakeholders had their own State-owned airlines alongside Air Afrique. Therefore, although smaller, the renewed ambition to grow them to fill some of the void was palpable.

Some three years later, the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA) jointly supported the creation of a new air carrier. The ambition was to replace the defunct Air Afrique with a better alternative. Thus, SPCAR, an interim company was formed in 2005 under the leadership of Gervais Koffi Djondo to conduct feasibility analysis and create a business plan leading to the foundation of a regional airline. Mr. Djondo who will later receive many distinctions in recognition of his outstanding contribution to the progress of the African aviation industry, was a very successful Togolese and pan-African business man. Prior to taking on the challenge to set up a new private pan-African airline, Mr. Djondo had already set a record by creating Ecobank, the first private pan-African bank with two business associates from Nigeria.

Pulling on the extensive experience and talent of former Air Afrique human resources, for instance Francis Kankoe Alemdjrodo as Project Manager for SPCAR, a new airline named African Sky Airlines or ASKY for short was effectively founded in 2007.

An Impressive Progress despite Early Challenges

Beyond enlisting the collaboration of former Air Afrique staff from various African countries, ASKY Airlines also benefitted from the success of Ethiopian Airlines. Indeed, Ethiopian was involved in the creation of the new airline as a strategic and technical partner. Ethiopian airline, which has an equity participation in this new venture also became responsible for the management of ASKY Airlines. As such, the East African carrier has transferred some experienced managers to assume key management roles within ASKY. For instance, Henock Teferra, the CEO was formerly Vice President of Strategy, Alliances and Communications at Ethiopian. Furthermore, ASKY acquired its fleet of aircraft, namely Bombardier Q400 and Boeing 737 through Ethiopian Airlines.

The operational and financial beginnings were somehow difficult. ASKY Airlines operated its first revenue flight in January 2010. Subsequent revenue flights were reported to have had less than dozen passengers, which suggests load factors of below 20%. However, turnout grew progressively to reach one million revenue passengers carried by March 2013. At some point, ASKY reached an average load factor of 80%. Considering the average passenger load factor (PLF) for the African airline industry is around 60% or less, attaining 80% PLF is quite an achievement.

Moreover, after just five years of operations, ASKY has declared profits for the first time: a decent four million US dollars for its 2015 financial year. That is yet another impressive record for a fairly new African airline, especially given the fact the African airline industry was expected to lose collectively some US$ 0.7 billion 2015, according to IATA.

Good Perspectives for the Future

As of June 2016, ASKY serves 22 destinations across 19 countries in West and Central Africa, which represents a significant portion of the network Air Afrique used to cover. Its partnership with Ethiopian Airlines is a strong asset. A more recent testament to that is the Addis Ababa – New York (Newark) route, which Ethiopian Airlines inaugurated in July 2016 via Lome, its West African regional hub. The attractiveness of this new route, which is operated with a Boeing 787 Dreamliner, has led Ethiopian to increase the frequency from an initial three to four weekly flights.

Additionally, the opening in April 2016 of a brand new, state-of-the-art terminal at the International Airport of Lome, offers a unique opportunity to expand, since this will be attracting other international airlines, in addition to Air France, Brussels Airlines, Royal Air Maroc and Ethiopian Airlines who already operate weekly flights to Lome.

Besides, according to a recent interview given by Mr. Teferra, the award-winning ASKY is planning to serve Paris in the near future.

Furthermore, the open sky agreements, which Togo has concluded respectively with the neighbouring Burkina Faso and with China will undoubtedly present opportunities to further expand the ASKY’s regional network, but also future intercontinental routes to Asia.

Finally, Tewolde GebreMariam, CEO of Ethiopian Airlines, was recently reported to be in discussions with the Togolese Government in order to set up an MRO facility and a training center in Lome. When achieved, this move will contribute among other things not only to strengthen ASKY’s base of operation, but also make it a regional aviation hub of choice in the West African region.

Summary

In less than a decade after starting operations, ASKY Airlines has beat the odds to not only grow its network, but more importantly to become profitable in a relatively short period of time. What makes it special is the fact that the regional operational environment of the airline is not very conducive to the airline business. This is partly due to heavy taxation, limited intra-connectivity and shortage of qualified personnel. It is becoming more and more obvious that ASKY Airlines is not only meeting, but also exceeding the basic quest of filling the void left by the dismantling of Air Afrique over a decade ago.

We hope that the pan-African airline will maintain the upward climb, while striving to differentiate itself in terms of customer and employee satisfaction and loyalty. In our opinion, these are but a few determining factors, which will sustain ASKY and turn it into an unprecedented success story within the African airline industry.

 

 

 

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Kofi Sonokpon

Kofi Sonokpon

Managing Editor of Airline Profits, the first aviation magazine devoted to improving airline effectiveness and profitability, Kofi Sonokpon has more than 20 years of international experience in aviation. Kofi holds an IATA sponsored Master of Business Administration (MBA) in Air Transport Management from the John Molson School of Business at Concordia University in Montreal. Kofi Sonokpon is a speaker, an airline business thought-leader, and author an innovative book series intended for the 21st century airline, namely Airlines for Business and Airlines for Technology.