AviationTop StoryTrending StoryWorld News

Reason behind Air Afrique Airlines Failure

202

 

The fact that Air Afrique airlines met an ignominious end is common knowledge. However, not a lot of people are familiar with the story of the once mighty regional airline company. Such a company deserves to have its story told, even if it is used as a cautionary tale for other upcoming airline companies.

When the Ivory Coast based airline was established in the 1960s the owners namely Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Gabon, Mauritania, Niger, the Republic of the Congo, and Senegal all French colonies in Africa had high expectations from the company.

At the time, many African countries, including newly independent former French colonies, couldn’t afford to operate their own national airline. But sensibly enough, many of those countries teamed up and set up the airline together with help from France. Originally, Air Afrique was owned by Air France and Union Aéromaritime de Transport (later to become UTA) alongside  the eleven countries.

Air Afrique flew for the best part of 40 years, operating as a pan-African carrier that had a decent reputation. But it progressively became more bloated and inefficient.

As at 2001, the airline had 4,200 employees to look after eight planes. In a report by The Economist,  the airline was close to collapse, “crippled by ballooning debts, appalling service and ludicrous over employment.

Passengers were calling Air Afrique “Air Maybe” because it had become so unreliable and prone to delays and cancelations.

Before the end of 2001, Air Afrique brought in outside help to save the airline. With funding from a World Bank grant, a US airline executive came to town to try to turn things around. But employees were protesting and the airline was carrying US$431 million in debt. This was hardly a new experience for Air Afrique. The airline had benefited from three financial bailouts since 1993.

With World Bank money disappearing at a rapid rate, the Washington D.C. based lender soon pushed for Air Afrique to be liquidated. One World Bank official referred to the airline as “technically insolvent.” The push by Washington to liquidate the airline further inflamed local employees.

Later in 2001, some radical financial restructuring attempted to save Air Afrique. Air France upped its stake in the airline from 12.2% to 35% and became the major shareholder. Those eleven African countries reduced their stake from 70.4% to 22%. Employees owned a further 5%, and various private investors owned the remaining share.

Despite this, Air Afrique stopped flying in January 2002.

One critical issue that hampered Air Afrique was the amount of regulation that stymied flights and growth between various African countries. Among other things, regulation limited how many flights could operate between various countries and how frequently. The rules were variable, inconsistent, and frequently inexplicable. For a pan-African airline like Air Afrique, it was a serious handicap to long-term growth and profitability.

 

 

Leave a comment

Related Articles

Food security: 1.3m Nigerians to benefit from Ukraine’s grain donation, says WFP

About 1.3 million Nigerians impacted by the rising cost of food in...

Forex crisis: FG slams $10bln fine on Binance

The Federal Government has fined a crypto trading platform, Binance, $10 billion...

Corruption will go away from Nigeria, says Pres. Tinubu as he inaugurates Lagos rail project

President Bola Tinubu inaugurated the Red Line rail project of the Lagos...

NNPC Ltd, OPEC pledge collaboration to attract investments, grow production

The Nigerian National Petroleum Company Limited (NNPCL) and the Organization of the...

Just in: Senate grants Tinubu’s request to sack FCCP boss

The Senate has approved President Bola Tinubu’s request to sack the Federal...

Why we suspended our nationwide protest – NLC

The Nigeria Labour Congress (NLC) has suspended its two-day national protest as...

CBN to sell dollar at N1,301 to authorized BDC

In its bid to increase liquidity, strengthen the naira, and curb distortion...

Oransaye report: List of FG’s agencies, depts, corporations to be scrapped, merged

Following the adoption of the Steve Oronsaye’s report for immediate full implementation...

USAF soldier self-immolates outside of Israeli Embassy to protest Gaza ‘genocide’

A 25-year-old, Aaron Bushnell, has died after setting himself on fire outside...

Breaking: Merger, scrapping of many govt agencies underway as Tinubu orders full implementation of Oronsanye Report⁣

12 years after the Steve Oronsaye panel submitted its report on restructuring...

CJN swears in 11 new Supreme Court justices

The Chief Justice of Nigeria, Justice Olukayode Ariwoola, swore in the newly...

Tinubu inaugurates Economic Advisory Committee with Elumelu, Dangote as members

A tripartite Economic Advisory Committee, consisting of the Federal Government, subnationals, and...

Breaking: Fire destroys FCT Minister’s home

A morning fire on Sunday completely destroyed the private residence of the...

Shun NLC protests, rallies, Afenifere urges Nigerians particularly Yoruba, says will escalate tension

The pan-Yoruba socio-political organisation — Afenifere — has urged Nigerians particularly Yoruba...

Breaking: Tinubu announces suspension of sanctions on Guinea, Mali, Niger, Burkina Faso

President Bola Tinubu has demanded that the Economic Community of West African...

ECOWAS Chair, Pres. Tinubu, presides over regional body’s summit in Abuja

President Bola Tinubu on Saturday presided over Extraordinary Summit of heads of...

Blackout: COAS laments decomposing corpses in Army mortuaries

The Chief of Army Staff (COAS), Lt.-Gen. Taoreed Abiodun Lagbaja, has frowned...

Harsh economy: NIN required as Customs begins distribution of seized food items to poor Nigerians

In a bid to alleviate the current hardship in the country, the...

APC’s Sen. Okpebholo emerges candidate for Edo governorship poll

Sen. Monday Okpebholo of the All Progressives Congress (APC) has been declared...

ECOWAS faces most difficult challenges since its formation – Ejime

A public affairs analyst, Mr. Paul Ejime, has lamented that the Economic...