May 10, 2007

Promoting firm seeks investors for African start-up

By Victoria Moores

Promoters of a new West and Central African carrier have begun seeking potential investors with the aim of starting regional and long-haul operations by the year-end.  The as-yet unnamed network carrier is planning a fourth-quarter launch. It will initially serve ten destinations, evenly split between African regional and European services, using a fleet of four long- and short-haul aircraft.

It is being created by Togo-based regional airline promotion company SPCAR, which has CFAF800 million ($1.7 million) in equity. This capital is being used to study the project, prepare the airline for launch and formulate a business plan.

SPCAR project manager Francis Alemdjrondo tells Flight's sister publication ATI: “For the time being we are working right now on funds formalisation. This should be achieved around the end of May or middle of June. Our business plan is completed and we have to submit this to our next board meeting, which is scheduled for the end of May.”

Details of the airline’s name, headquarters and its long- and short-haul operational bases will not be available until after this meeting, says Alemdjrondo.

SPCAR is owned by Ecobank, the Economic Community of West African States (ECOWAS) Bank for Investment and Development and the West African Development Bank. It is headed by former Togo Government minister and Ecobank chairman Gervais Djondo.

The banks are not presently shareholders in the proposed airline company. But once the carrier is created, in about two months, the banks will take a third of its equity and the remainder will go to private investors. “We are working on this,” says Alemdjrondo. “It will take a maximum of one to two months and we will have a new distribution of capital for the airline.”

The team’s focus will then switch to recruiting top management, securing operating licences and sourcing wet-leased aircraft. Alemdjrondo says: “In the beginning we will wet-lease aircraft and will operate with the air operator’s certificate of the company which owns the aircraft.”

Alemdjrondo says that the airline will launch with two 150-seat aircraft for its short-haul routes and two 250-seat long-haul aircraft. It will offer business and economy class cabins on all of its routes.

Under the airline’s five-year business plan, and depending on network development, a further four aircraft will be added each year. “We think that the airline’s development will be stabilised five years after beginning operations,” says Alemdjrondo.

Priority will be given to re-establishing some of defunct Air Afrique’s former routes, such as Abidjan-Paris and Accra-London, although destinations will depend on the start-up carrier’s securing route rights. Routes such as Dakar-New York will only be possible once the airline is established and audited, says Alemdjrondo.

Alemdjrondo says that the project initially involves the 15 ECOWAS states and will later be expanded to include six countries in Central Africa. He says that the new carrier will fill the gap left by the demise of several African carriers.

“We have a gap in which to create a West African air transport system. Today this system is not performing well and passengers have difficulties flying from one point to another in West Africa and other African countries. This is why the decision has been taken to create the airline,” he says.

Ultimately the start-up is planning to serve destinations in West and Central Africa, Europe, the USA and the Asia-Pacific region. It plans to tap a significant upturn in the sub-Saharan African market, which registered 30% traffic growth in 2006.