Uganda Airlines has announced it will start flying from its hub at Entebbe to Johannesburg, South Africa from the 31st of May 2021.
The news will come as welcome relief to frequent fliers who were robbed of a direct connection between the two countries after South African Airways pulled out of the route as it desperately restructured its network under business rescue in February 2020 in a bid to avoid collapse.
SAA’s former franchise partner, Airlink subsequently took over the route among many other axed SAA routes but eventually cancelled flights due to a due restrictions brought about by the Covid-19 pandemic. Airlink is expected to re-launch direct services to Entebbe in the near future
Uganda Airlines will operate the route 4 times weekly and has announced through social media that prices will start at a competitive $341 return
The Uganda national carrier is awaiting certification for its wide-body Airbus A330 NEO aircraft to start flying to planned long haul destinations which will include Dubai, London, Mumbai and Guangzhou
Kenya’s legacy carrier is continuing with its momentum in 2021 by partnering with advanced air mobility (AAM) company Skyports. The airline has signed a Memorandum of Understanding (MoU) that will see the launch of permanent Unmanned Aerial Vehicle (UAV) operations in the East African country.
The collaboration is already in effect and will include drone delivery and Airport inspection operations.
The aim of the partnership in the coming three months is to explore the commercial viability and impact of a variety of medical, logistical and inspection use cases alongside Kenya’s leading public and private institutions. The target for the launch of the first drone delivery flights is during Q3-Q4 2021.
“Aligning with our purpose of the sustainable development of Africa, this partnership with Skyports will support our diversification plans in drone technology application. This will give us access to available equipment and established operations that will lay the foundation for the Kenyan and regional drone market through our drone and emerging aviation technology subsidiary, Fahari Aviation,” said Allan Kilavuka, chief executive officer Kenya Airways
Duncan Walker, chief executive officer at Skyports, said, “Our partnership with Kenya Airways can unlock significant opportunities for drone deliveries and inspections in Kenya. This will create time and cost savings for our customers and contribute to the growth of the country’s tech and aviation ecosystem. This important partnership underscores the growth potential of Skyports’ tech-agnostic operator approach as a flexible offering which is suited to varying global market requirements. We look forward to working with Kenya Airways and to further demonstrate the viability of AAM in different geographies.”
Kenya Airways seeks to lead the application of drone technology in the region, with the collaboration enabling KQ to be one of Africa’s leading carriers offering training, operations and traffic management services through its wholly owned subsidiary, Fahari aviation.
Skyports is a mobility company developing and operating landing infrastructure for the electric air taxi revolution, as well as operating cargo drone deliveries. The company obtained regulatory approvals to fly the UK’s first beyond visual line of sight (BVLOS) medical drone deliveries for the National Health Service (NHS), with operations currently under way. Similarly, Skyports operated the UK Royal Mail’s first drone parcel delivery in Scotland in December 2020.
Budget carrier Air Cairo has taken the delivery of its first Airbus A320neo aircraft that will be joining Air Cairo’s all Airbus fleet consisting of 7 aircraft. The Airbus is on lease from ICBC Leasing and is equipped with CFM LEAP-1A engines.
The new aircraft will be deployed on Air Cairo’s regional and international network to serve countries across Europe, Africa and the Middle East.
This new delivery also coincides with Air Cairo’s fleet expansion and modernization plans while opening more routes and fostering closer links with countries across continents.
Air Cairo’s A320neo is configured with 186 seats in an all-economy-class cabin with passengers on-board the aircraft benefiting from the widest cabin of any single-aisle aircraft and the latest generation in-flight entertainment system.
The first A320neo aircraft conducted its Maiden flight program in September 2014 and has won over 7,450 orders from over 120 customers worldwide. Key innovations of the A320neo include latest-generation engines, Sharklet large wingtip devices and multiple cabin improvements. Together, the aircraft delivers 20% in fuel savings and CO2 reduction compared to previous generation Airbus aircraft.
Kenya Airways and Congo Airways have today 22, April, announced the signing of memorandum of understanding (MOU) strengthening aviation ties between the two airlines that aims at boosting passenger and cargo businesses between the two markets internationally.
The partnership involves the areas of technical capacity building, commercial cooperation and human resource training that will help in promoting the exchange of knowledge, experts and innovation while supporting the viability of these two companies through financial collaboration in the face of the COVID-19 travel slowdown.
The MOU was signed by Kenya Airways Group Managing Director & CEO Allan Kilavuka and Désiré Balazire Bantu, CEO of Congo Airways, and was witnessed by Congo’s President Felix Tshisekedi and his Kenyan counterpart President Uhuru Kenyatta in Kinshasa, on the last day of President Kenyatta’s three-day State visit of DR Congo
According to Kenya’s State House, the MOU will span 2 years with viability and sustainability of the airlines a priority . It also includes a route and code sharing provision aimed at expanding the carriers domestic, African and international networks
Unease, shock and nerves describe the current mood at Uganda Airlines where a shake-up is currently underway. According to sources, the top hierarchy including the CEO, Cornwell Muleya have been sent packing after a dramatic intervention by my transport minister General Katumba Wamala, on orders from the state house
State owned media has reported that up to 10 of Uganda Airlines top management including the CEO, financial director, head of safety and human resource director have gone on 3 months leave.
But the move, according to a source, is due to allegations of corruption, mismanagement and poor performance within the state-owned entity and will allow for a full investigation into the matter.
A new acting CEO, Captain Steven Wegoye has been appointed to oversee a transition
Both the transport minister and head of Uganda Airlines board have maintained in a response to state owned media that the entire management team has simply taken up their accumulated leave. This at a time when the airline is stepping up preparations for route expansion to Johannesburg and network expansion to long haul destinations in the Middle East, Europe and Asia.
The Auditor General noted that 10 State enterprises had debt ratios of more than 50%, implying that their total assets were insufficient to cover their total debt. This list included the Uganda Civil Aviation Authority (UCAA) with a gearing ratio 51.17% in the 2018-19 financial year and a ratio of 48.88% in the 2019-20 financial year. Uganda National Airlines Company Limited had a gearing ratio of 2.37% in the 2018-19 financial year and a ratio of 0.48 in the 2019-20 financial year.
But in a media release, the airline denied the existence of any form of debt, saying: “Uganda Airlines is fully capitalised by the shareholders and has no debts on its balance sheet. All the aircraft and other assets were paid for by cash from the shareholders. Uganda Airlines therefore does not have any loans or interest payments to any financier.”
South African Airways subsidiary, Mango Airlines has completed a chaotic day of flight disruptions and negotiations over owed debt. The low cost carrier was earlier suspended from operating at airports owned by Airports Company South Africa, due to outstanding debt.
A social media statement from the airline reads:
“Mango Airlines apologises for today’s flight interruptions and delays.
We can confirm that our services and all flights are temporarily suspended for today only, due to outstanding payments to ACSA”
Airline representatives spent the day locked in negotiations with ACSA and evidently found a breakthrough with ACSA later announcing a lifting of the afore-mentioned suspension
An official statement from ACSA reads:
“Airports Company South Africa can confirm as reported earlier today that it had suspended Mango Airlines from using its airports due to outstanding debt.
Airports Company South Africa has since lifted the suspension on Mango Airline with immediate effect. This follows negotiations that were entered into earlier between the two entities.
The airline has made part payment today (Wednesday) towards the amount owed to Airports Company South Africa for landing fees, parking fees and passenger service charges.
The airline has made further undertakings to settle the remaining debt. It is under these circumstances that Airports Company South Africa has agreed to lift the suspension on Mango Airline.
The approach of Airports Company South Africa to our business relationship with Mango Airline is consistent with our approach to other airlines based on the terms and conditions entered into contractually, details of which remain confidential.”
ACSA has not disclosed exactly how much is owed by Mango but it is reported that up to 3000 passengers could have been affected by the suspension
Despite being a subsidiary of South African Airways, Mango Airlines has not been under business rescue, but the Airline has been expecting a sum of R2.7 Billion from the R10.5 Billion that was allocated to SAA towards business rescue. However, Mango Airlines has not received the funding from Department of public enterprises and lessors have given the airline an ultimatum which could see the carrier grounded on the 1st of May
The airline is likely to be put under business rescue and has officially made a request that is awaiting approval
Ethiopian Airlines has become the first African airline to conduct a flight using the IATA Travel Pass app to manage passenger health and personal data. The trial will be conducted on flights out of Addis Ababa to Washington DC and Toronto as well as on flights out of London and Toronto to Addis Ababa, effective 25 April 2021.
Ethiopian has gone digital in all of its operations to avoid physical contact and combat the spread of the pandemic and now, embarks on this initiative which will allow passengers to relish unparalleled flight experience.
Regarding the trial of the IATA travel pass, Mr. Tewolde GebreMariam, Group CEO of Ethiopian Airlines said, “Digital technology is vital to solve many of the problems that arise from the pandemic. We are glad that we are offering new digital opportunities to our passengers so as to fully and safely restart air travel. Our customers will enjoy efficient, contactless and safer travel experience with their travel pass digital passport. As a safety first airline, we have become the first African airline to trial IATA’s travel pass initiative to facilitate travel. The new initiative will increase travellers’ confidence in travel, encourages governments to reopen their borders and expedites industry restart.’’
Nick Careen, IATA Senior Vice President for Airport, Passenger, Cargo and Security said, “Ethiopian Airlines is once again showing its leadership position in Africa becoming the first carrier to implement a live trial of IATA Travel Pass. The trial will help build confidence among governments and travelers that digital health apps can safely, securely and conveniently help restart aviation. The app gives travelers a one-stop-shop to help them comply with the new rules for travel. And for governments complete assurance in the identity of the passenger and the authenticity of the travel credentials being presented. We urge Governments in Africa to accelerate the acceptance of digital health credentials for travel across the continent.”
IATA travel pass is a mobile app that can be used by passengers to obtain and store their COVID-19 test results from accredited laboratories. Passengers will be able to share their pre-departure COVID-19 polymerase chain reaction (PCR) test results with their airline during check-in and on-arrival at the immigration checkpoints at Addis Ababa’s Bole International Airport.
IATA echoes that the Travel Pass will help create a digital passport, receive test and vaccination certificates and verify that they are sufficient for their route, and share testing or vaccination certificates with airlines and authorities to facilitate travel. The digital travel app will also avoid fraudulent documentation and make air travel more convenient.
Contactless technology is re-defining passenger experiences at an increasing number of airports across the world after the 21st century’s second pandemic turned the world of travel upside down and rapidly accelerated the pace of biometric deployment.
Are Vaccines passport a good idea? What are your thoughts
Airlink has today 21, April, unveiled its new FlyAirlink App that will make it easier for its customers to book flights, update personal travel needs, review flight status and speak to their dedicated customer service teams.
The app is compatible with IOS and Android devices and can be downloaded from the Apple App Store and Google Play Store.
“This intuitive and easy-to-use new App is designed for ease of convenience and efficiency. We want to make the entire process simple and effortless for our customers to plan their travel, book their flights, check-in and store their digital boarding pass, and monitor the status of their flights or of a flight they may have interest in.” said Airlink CEO and Managing Director, Rodger Foster.
The FlyAirlink app allows customers to:
Search and book domestic and regional flights on the go.
Manage their travel preferences and payment methods from anywhere.
Check in and download digital boarding passes.
Monitor flight status and receive real-time flight update notifications.
Retrieve details from past trips
Meanwhile, Airlink continues to strengthen its route network adding flights between Johannesburg and Livingstone that is aimed at strengthening connections between South Africa and Zambia with the flights going for sale beginning May, 26.
Airlink will also resume services between Nelspruit and Livingstone from May 1, enabling travellers to visit the Victoria Falls as well as the Kruger Park also connecting on to Airlink’s South African destinations such as Cape Town and Durban.
“There is pent-up demand among local and international travellers to visit our region, which is home to some of the world’s most spectacular sights and destinations. With Covid-19 vaccination programmes ramping up in some of our traditional markets, we are seeing the first signs of light after a devastating 2020. Our Livingstone flights together with our recently-launched mainline South African domestic services put some of the region’s key tourist destinations within easy and convenient reach,” explained Airlink CEO and managing director, Rodger Foster.
Uganda, Kenya and Rwanda are the latest African countries to suspend flights originating from India as the Asian country reports a surging average of 314,000 cases a day testing positive for COVID-19. The suspension has naturally extended to destination carriers Kenya Airways and RwandAir who have cancelled all flights “Until further notice”
For flights cancelled by the airlines, passengers are nevertheless assured of being able to re-book their flights or get a refund for the unused portion of their ticket at a later date.
The ferocious surge in the new cases seems to be reversing the industry’s biggest travel comebacks, as Asian carriers were the first to show signs of recovery. Indian carriers had reached 87% of their pre-pandemic seat capacity through early April, according to Bloomberg analysis of data from flight tracker OAG, but that progress has now unravelled led by a pullback in domestic flights, which make up the vast majority of the market.
The pandemic surge has also prompted United Arab Emirates’ national airline, Emirates, to also suspend flights between Dubai and India for 10 days effective Sunday, April 25, a critical blow for India, as Dubai is a key connecting city for the country.
The International Air Transport Association (IATA) expects net airline industry losses of $47.7 billion in 2021 (net profit margin of -10.4%). This is an improvement on the estimated net industry loss of $126.4 billion in 2020 (net profit margin of -33.9%).
“This crisis is longer and deeper than anyone could have expected. Losses will be reduced from 2020, but the pain of the crisis increases. There is optimism in domestic markets where aviation’s hallmark resilience is demonstrated by rebounds in markets without internal travel restrictions. Government imposed travel restrictions, however, continue to dampen the strong underlying demand for international travel. Despite an estimated 2.4 billion people travelling by air in 2021, airlines will burn through a further $81 billion of cash,” said Willie Walsh, IATA’s Director General.
The outlook points to the start of industry recovery in the latter part of 2021. In the face of the ongoing crisis, IATA calls for:
Plans for a restart in preparation for a recovery: IATA continues to urge governments to have plans in place so that no time is lost in restarting the sector when the epidemiological situation allows for a re-opening of borders.
“Most governments have not yet provided clear indications of the benchmarks that they will use to safely give people back their travel freedom, In the meantime, a significant portion of the $3.5 trillion in GDP and 88 million jobs supported by aviation are at risk. Effectively restarting aviation will energize the travel and tourism sectors and the wider economy. With the virus becoming endemic, learning to safely live, work and travel with it is critical. That means governments must turn their focus to risk management to protect livelihoods as well as lives,” said Walsh.
Employment Support: Industry losses of this scale imply a cash burn of $81 billion in 2021 on top of $149 billion in 2020. Government financial relief measures and capital markets have been filling this hole in airline balance sheets, preventing widespread bankruptcies. The industry will recover but more government relief measures, particularly in the form of employment support programmes, will be needed this year.
“Owing to government relief measures, cost-cutting, and success in accessing capital markets, some airlines appear able to ride out the storm. Others are less well-cushioned and may need to raise more cash from banks or capital markets. This will add to the industry’s debt burden, which has ballooned by $220 billion to $651 billion. There is a definite role for governments in providing relief measures that ensure critical employees and skills are retained to successfully restart and rebuild the industry,” said Walsh.
Cost containment/reduction: The whole industry will come out of the crisis financially weakened. Cost containment and reductions, wherever possible, will be key to restoring financial health.
“Containing and reducing costs will be top of mind for airlines. Governments and partners must have the same mentality. And that must be reflected in items big and small. There can be no tolerance for monopoly infrastructure suppliers gouging their customers to recoup losses through higher charges. Equally, we demand an end to the extortionate costs for COVID-19 testing with governments taking their cut on top of that with taxes. Everyone must be aligned in understanding that increased travel costs will mean a slower economic recovery. Cost reduction efforts on all sides are needed,” said Walsh.
Industry Outlook Highlights:
Demand: Travel restrictions, including quarantines, have killed demand. IATA estimates that travel (measured in revenue passenger kilometers or RPKs) will recover to 43% of 2019 levels over the year. While that is a 26% improvement on 2020, it is far from a recovery. Domestic markets will improve faster than international travel. Overall passenger numbers are expected to reach 2.4 billion in 2021. That is an improvement on the nearly 1.8 billion who traveled in 2020, but well below the 2019 peak of 4.5 billion.
International passenger traffic remained 86.6% down on pre-crisis levels over the first two months of 2021. Vaccination progress in developed countries, particularly the US and Europe, is expected to combine with widespread testing capacity to enable a return to some international travel at scale in the second half of the year, reaching 34% of 2019 demand levels. 2021 and 2020 have opposite demand patterns: 2020 started strong and ended weak, while 2021 is starting weak and is expected to strengthen towards year-end. The result will be zero international growth when comparing the two years.
Domestic passenger traffic is expected to perform significantly better than international markets. This is driven by strong GDP growth (5.2%), accumulated consumer disposable cash during lockdowns, pent-up demand, and the absence of domestic travel restrictions. IATA estimates that domestic markets could recover to 96% of pre-crisis (2019) levels in the second half of 2021. That would be a 48% improvement on 2020 performance.
Cargo: Cargo has outperformed the passenger business throughout the crisis. That trend is expected to continue throughout 2021. Demand for cargo is expected to grow by 13.1% over 2020. This puts the cargo business in positive territory compared to pre-crisis levels (2020 saw a full-year decline of 9.1% compared to 2019). Total cargo volumes are expected to reach 63.1 million tonnes in 2021. That’s nearly at the pre-crisis peak of 63.5 million tonnes which occurred in 2018.
Revenues: Industry revenues are expected to total $458 billion. That’s just 55% of the $838 billion generated in 2019 but represents 23% growth on the $372 billion generated in 2020.
Passenger revenues are expected to total $231 billion, up from $189 billion in 2020, but far below the $607 billion generated in 2019.
Cargo revenues are expected to reach $152 billion, a historic high. This is up from $128 billion in 2020 and $101 billion in 2019. Capacity remains constrained owing to the large-scale grounding of the passenger fleet. This removed significant belly capacity, driving up yields 40% in 2020, with a further 5% growth expected in 2021. In 2021 cargo will account for a third of industry revenues. This is significantly above cargo’s historic contribution, which ranged around 10-15% of total revenues. The improvement in cargo, however, is not able to offset the dramatic decline in passenger revenues.
Costs: Airlines have not been able to cut costs as fast as revenues have fallen. Recently we have seen worrying cost trends in fuel and infrastructure:
Fuel: The cost of jet kerosene fell to $46.6/barrel in 2020. But, with the pick-up in economic activity fuel costs are on the rise. Jet kerosene is expected to rise to an average of $68.9/barrel in 2021, nearing the 2019 average price of $77/barrel.
Non-fuel: Non-fuel unit costs rose by 17.5% in 2020 as fixed costs were spread over dramatically reduced capacity. As capacity grows in 2021and airline cost-cutting efforts mature, this will partially reverse itself with a 15% decline. “We have seen some worrying signs from our airport and air navigation service providers. Heathrow, for example, is attempting to recoup pandemic losses by expanding its regulated cost base. We are in this crisis together with our partners. Recouping losses from one another is not the answer. We all need to tighten our belts. And the regulators need to act and stamp out monopolistic behaviours,” said Walsh.
Capacity: Capacity is likely to return at a slower pace than demand. That reflects the pressure on airlines from debt and fuel prices to operate only cashflow-positive services. Taking cargo and passenger traffic into account, the overall weighted load factor is forecast to rise a little to 60.3% in 2021. This is considerably below the 66% we estimate to be breakeven for profitability in 2021 – even though cash costs of operations are being covered.
Significant differentiation is emerging between regions with large domestic markets and those relying primarily on international traffic. Losses are highest in Europe (-$22.2 billion) with only 11% of its passenger traffic (RPK) being domestic. Proportionately, losses are much smaller in North America (-$5.0 billion) and Asia-Pacific (-$10.5 billion) where domestic markets are larger (66% and 45% respectively, pre-crisis).
2021 CAPACITY VS 2019
(% OF REVENUES)
(% OF REVENUES)
North American carriers are best placed to take advantage of the rapid vaccination boost to domestic travel in the US, as well as the strong economy driving air cargo demand. Losses are reduced to the lowest in any region at -2.7% of total revenues. In 2020 net losses were -26.8% of total revenues.
European carriers are highly dependent on international passenger revenues, with domestic markets representing only 11% of RPKs. Along with testing, vaccines will play an important role in reopening international travel. Uneven vaccination rollout was already expected to limit the number of international markets opening this year. Slower vaccination in Europe will also restrict the recovery of the important within-Europe market and the North Atlantic. Net losses are expected to be reduced at the slowest rate among the major regions. The region’s carriers are expected to see net losses fall to -23.9% of revenues for 2021 (from -43% in 2020).
Asia-Pacific carriers see 45% of their RPKs generated on domestic markets and will benefit from the strength of the Chinese domestic market recovery, as well as the relative importance of air cargo to the region. Net losses are expected to be reduced from -31.1% of revenues in 2020 to -8.8% of revenues this year.
Middle Eastern carriers will benefit from relatively rapid vaccination rates on home markets. They will be hampered, however, by continued travel restrictions on many of the routes to emerging economies that are served through Gulf hub connections. Net losses in 2021 are forecast at -13.8% of revenues (reduced from -28.9% of revenues in 2020). It will be the third smallest regional loss.
Latin American carriers are advantaged by having almost half (48%) of their RPKs being generated on domestic markets, in particular the large Brazilian home market. They are starting from relatively large losses in 2020 and, in some parts of the region, a slow rate of vaccination. Revenues from the growth in domestic travel are forecast to cut net losses by more than two-thirds this year—to -20.4% of revenues in 2021 from -80.1% in 2020.
African carriers will see slow vaccination rates limit international travel. With only 14% of the region’s RPKs generated on domestic markets this will provide little cushion. Relatively weak economic growth will also limit the extent of pent-up demand. Nonetheless, net losses are expected to fall this year, from -32% of revenues in 2020 to -24%.