By Jeff Kapembwa
Lusaka - Zambia Airways that was scheduled to take off in October, has to wait until January 2019 due to administrative formalities that remain incomplete.
The national airline was expected to take to the skies on October 24 for the first time since it went under in 1984. The maiden flight was to coincide with Zambia’s 54th independence anniversary.
Zambia Airways and Ethiopian Airlines have partnered in a US$30 million joint venture to revive the national carrier. The Industrial Development Corporation and Ethiopia Airlines signed a shareholder agreement for the establishment of Zambia Airways in Lusaka on Saturday, August 19, 2018.
As strategic equity partners on the national airline project of Zambia, IDC will hold 55% equity in the carrier, with Ethiopian Airlines holding 45%. The initial investment as we start-up the national carrier will be US$30 million.
IDC chief executive officer Mateyo Kaluba is hopeful the re-establishment of the national airline would deepen and strengthen growth in the country’s industrialisation agenda.
“For IDC, this investment represents our commitment to deepening and strengthening Zambia’s industrialisation. The establishment of the national airline will spur growth in the tourism sector and will have a significant multiplier effect on job creation through the different businesses in the aviation supply chain such as hotels, restaurants, travel agencies, publishers, and others.
“With the Zambian Government’s drive to build transportation infrastructure from the new airports, good road networks, and now the airline, we are confident that Zambia is destined to become Southern Africa’s regional aviation and logistics hub,” Kaluba said in a joint statement.
The new airline is expected to operate 12 aircraft and carry over 1.9 million passengers by 2028. Zambia Airways will launch local and regional routes while the intercontinental routes including Europe, the Middle East, and Asia will be added in due course. According to IDF, the company will only be expected to launch on January 1, 2019, after completing the certification process. Tewolde GebreMariam, the Ethiopian Airlines Group Executive Officer says his company needs to work with Zambia in reviving the national airline despite concerns from some players and is optimist the venture will succeed.
Some critics have argued against the revival of Zambia Airways claiming it will be a burden to the State that the money should instead be ploughed into other productive sectors including agriculture, now the new lifeline other than copper mining.
Tentatively, shareholders want Zambia Airways to fly the efficient turboprops for domestic and some regional routes. The Boeing 700 will be used for routes such as the Lusaka-Dubai and Airbus for the international routes such as Lusaka-New York.
However, information available to The Southern Times shows that the signing of the agreement has inspired the Ethiopian Airlines to expand its business to at least 14 countries on the continent as part of its Vision 2025 growth plan, with the carrier hoping to become the leading aviation group in Africa.
From Zambia and Malawi in the south, Chad and soon the Democratic Republic of Congo in Central Africa and Togo, with a likelihood of Nigeria and Ghana in the West, the carrier is seeking to dominate the continent’s aviation space.
“We should see more collaboration from African airlines in order to withstand the stiff competition from the non-African carriers that are now carrying more than 75% of the traffic. It is only through such collaborations that we can guarantee the existence of home-grown airlines in the next decade,” GebreMariam is cited as saying.
According to results of the past financial year, Ethiopian Airlines’ profits swelled to US$233 million from US$229 million earned the previous year. Revenue streams grew 46% to US$3.2 billion, from the 10.6 million passengers that the airline ferried across the globe.
The airline already has running maintenance work contracts with two Nigeria-based carriers, Arik Air and Medview Airline, which are being undertaken by its maintenance repair and overhaul business unit.
Ethiopian Airlines is already in talks with Chad, Djibouti, Equatorial Guinea and Guinea to set up carriers through joint ventures. Ethiopia and Chad have agreed on a 49:50 venture for the national carrier, with Ethiopian Airlines taking the minority share.
In Southern Africa, the Ethiopian Airlines has a joint venture with the Malawian national carrier. Plans are afoot to establish a wholly owned airline in Mozambique, with a contract having been signed to start an airline in Guinea.
It is also doing business with Congo Airways, through a technical agreement. In West Africa, the continent’s biggest and most profitable aviation market, Ethiopian Airlines has partnered with Togolese carrier, Asky Airlines. It is also doing business with Air Côte d'Ivoire. “We have taken a 49% stake in the national airlines for Guinea and have taken over management of CEIBA International in Equatorial Guinea,” GebreMariam is further cited.
However, some airline experts have contended that the expansion by the airline across Africa is ostensibly to push a monopolistic agenda that will stifle its competitors, many struggling to maintain a foothold on the sector.
“Ethiopian Airlines has a fantastic growth strategy but risks becoming a continental monopoly, which would be bad for competition,” Nicanor Sabula, chief executive of the Kenya Association of Travel Agents was cited as arguing.