AFTER NEARLY 10 YEARS IN THE SKIES OVER WEST AFRICA, WHERE IS ASKY HEADING?
(Posted 11th September 2019)
Nowel NGALA
Directeur commercial et des opérations au sol
ASKY AIRLINES
Q1 – ASKY airline received its 8th New Generation B737-800 aircraft, what does this new acquisition represents to you ?
We are always very pleased when we have the opportunity to add an additional aircraft to our growing fleet. It gives us inspiration, as we have a high level of gratification to our passengers and to Africans in general for their continuous patronage.
This enables us fulfill our primary objective of serving the public, promoting regional integration, tourisme and our contribution to the economic growth and development of the African continent.
Since January 2010, ASKY has gradually expanded its operations into all countries within West and Central African regions, operating into two markets in some countries. We have grown our fleet to eight aircraft all B737s – 700s/800s and only one Bombardier Q400 aircraft which will be returned before the end of this year 2019, for an acquisition of two additional Boeing 737 aircraft with bigger capacity, to make our fleet size increase to 10 aircraft before the end of the first
Quarter of 2020 when we will be celebrating our 10 years of successful and uninterrupted service to Africa.
Q2 – ASKY Airline was launched in January 2010, very soon 10 years of operation, what is the results of your performance for all these years ?
For the past three decades, Africa has witnessed the creation and extinction of over 40 airlines in the continent. A continent with a very high record of airlines closing down.
After the defunct Air Afrique in 2002, ASKY was founded and has been in operations since January 2010, with a solid business plan estimated to be profitable after its first three years of operations.
Although the initial capital stake of over 63 billion FCFA was not successfully raised at commencement of its activities as required by the starting business plan, however, approximately 30 billion FCFA was available to launch the airline. This affected cash-flow and the first four years of activity was not good for the airline as its main focus was on establishing and making itself known in the region, which led to huge investments on brand presence.
The Ebola epidemic seriously affected the airline’s operations in 2014 ; with over five months (August – December), typical high season period saw a big fall in travel within the region as a result of the impact of the epidemic. Several markets were closed down and load factors and revenue fell tremendously.
2015 experienced an increase in travel across the region as a result of the slow down during the last two quarters of 2014 caused by the epidemic. ASKY was able to change its network strategy launching a two bank system that increased aircraft utilisation and provided more capacity to markets to absorb growing demand.
Serious pilot shortage which led to operational deficiencies, combined with a tremendous increase in fuel prices due to the world economic recession had a very huge impact on the airline in 2016.
Despite the undercapitalization, increase in fuel prices that represents over 40% of the airline’s operating cost, among so many other market constraints such as fierce competition across the region by other non profit driven airlines and state owned flag carriers with very huge state subventions, ASKY has been able to keep its head above waters in 2017 and 2018 respectively, with an annual regional contribution of over $85 million in the form of direct cash injections into the economy of West and Central African regions as a result of it’s presence and activities.
With this positive trend, the airline is set to be on the right direction as 2019 projects good results. This continues to push the airline to expand its network into new regions and markets such as South Africa – Johannesburg, Point Noire and Praia.
Q3 – The African aviation sector is reputable for being very competitive and difficult, what are you doing in ASKY to make a difference ?
The challenges posed by the African aviation operating environment are considerable and, although detail discussion is beyond the scope of this interview, it is important to take stock of them.
Revenue pressures – that is being able to balance yield and load factor while avoiding high ticket prices and still be profitable is a major and
fundamental challenge for the survival of the airline on the one hand, and on the other hand:
Cost pressures – such as airport and navigation charges, fuel costs, distribution costs, maintenance costs, labor costs, insurance and ownership costs, mostly supplied by service providers that are monopolies is also a serious challenge.
But the operating environment – with issues such as infrastructure, safety and security concerns, excessive protection of national carriers, discriminatory practices against African carriers, limited skilled man power in the industry, barriers to open skies and liberalization, cumbersome immigration/customs controls and restrictions amongst Africans and the non-respect of international ratified conventions such as the Yamoussoukro Declaration and the SAATM – Single African Air Transport Market by some states for the awards of traffic rights particularly to privately designated airlines as ASKY crowns it all.
Despite all these odds, ASKY still struggles to keep its head above the water. With a very rigorous cost saving effective strategy to minimize all possible excesses and retained absolutely the basics that is required to keep the business alive. Since it is a heavy capital intensive business with very little profit margins, as a result, this continues to enable huge savings.
Mindful of the high and uneven competition in the markets, ASKY has successfully engaged with over 35 different commercial agreements with other international carriers in the form of interlines/SPAs, codeshares and basic transfer of passengers and cargo agreements, which have enabled for full visibility and by extension visible presence in offline markets globally.
It is a permanent need to partner with other carriers in order to provide an extensive service across the globe, which has enabled a strong support of the airlines network, bringing in fresh and new traffic into and out of it’s network. As a network carrier partnerships and continuous improvement on connectivity is key to the airlines’ sustainability goals.
Q4 – Ethiopian Airline has 40% capital share in ASKY, How do you manage your daily relationship with the mother house of Ethiopian Airlines ?
There is a perfect and cordial relationship between both airlines. In fact, a part of being one of the major shareholders of ASKY airline, Ethiopian airline have a management and technical contract with ASKY, which is purely an excellent example of South – South cooperation that needs to be emulated as a success story in Africa. Meaning, it can be done by Africans, for Africa and within Africa.
With Ethiopian Airlines’ extensive experience of over 70 years in the business, operating in a very complex environment and being the most successful airline in Africa today, it is essential to take stock of this as we continue to nurture the existing relationship moving forward.
However, the day to day management of ASKY remains the sole responsibility of ASKY’s management team as directed by its Board of Directors chaired by the founder Mr. Gervais Koffi Djondo.
Q5 – What are your short and long term expansion plans in Africa ?
Despite the progress made so far and the gap we have successfully filled in the past nine years, enabling Africans to travel from one country to the other within a day and connecting to many cities as possible, we still strongly believe a lot more needs to be done to improve intra-Africa traffic.
Today, ASKY operates to over 24 markets within Africa, with the most recent being Johannesburg – South Africa. As we continue to grow our weekly passenger uplift of over 14,800 passengers, our plan is to strengthen the network by providing more seats and frequencies to enable connectivity to all markets daily in a short, immediate and continuous terms provided we obtain the required traffic rights. This will be by opening secondary markets within African countries different from political and economic capitals.
We recently since July 2019 extended flights from Libreville and Douala to Johannesburg which has improved aircraft utilization and volumes, while connecting West and Central African regions directly with a daily service to the South African region.
In the same light we are looking at the East African region and other markets such as Dubai, Lebanon and Paris.
However, to achieve this, our market studies have to be right and we should be able to obtain traffic rights to these markets and acquire the right aircraft type for our passenger’s comfort.
Thank you very much for this opportunity to share our thoughts with you and the public.
