Libyan Airlines and Afriquiyah in merger talks to fly again
Halted by the Libyan unrest, Libyan Airlines and Afriqiyah have gradually resumed operations. But their traditional African routes may undergo revision due to financial constraints, especially as the Mediterranean region promises more lucrative routes. Nonetheless, the two companies may need to consider dire measures if they intend to make profits.
After the fall of Muammar Gaddafi and the advent of the National Transitional Council (NTC), the two Libyan airline companies, subsidiaries of the holding company Libyan Airlines Authority (LAAH), have re-emerged from near collapse.
Libyan Airlines, the national carrier and Afriqiyah, founded in 2001 to serve the African continent, suffered heavy losses during the uprising.
Rammah Ettir, CEO of Afriqiyah since 2008, talks of a difficult return to business.
“After the air blockade, between March and August 2011 [October 2011 for international flights, Ed], we focused on the repairs of our fleet. In addition to the one that burned in August [Airbus A300-600], four of our Airbus A320 were damaged.
“At the end of the fighting in Tripoli, we only had two aircraft in flying condition!”
Afriqiyah, which is being assisted in the rehabilitation of its Airbus fleet by its supplier, now has five operational aircraft.
“We first made humanitarian flights to Tunisia and Egypt in September and October. And in November, we opened our routes to Tripoli, Benghazi, Sabha, Sirte and Misrata,” Ettir said.
The head of the airline group however evokes a “catastrophic financial situation.”
“We are surviving by virtue of government subsidies,” he said without being precise of the amount in subsidies the company receives from the government.
The future remains bleak for Afriqiyah, which carried 709,900 passengers in 2009 and by the end of November this year counted some 1,100 employees.
“We are in a transitional phase”, indicates Ettir. “It is too early to decide which of our old sub-Saharan destinations will be kept, although some of them, including Accra and Lagos, were profitable before the war.
“At the regional level, we have planned to reopen connections to Cairo, Tunis, Istanbul and Alexandria in early 2012,” says the CEO.
Libyan Airlines, which lost an A300 aircraft during the conflict, resumed domestic flights as well as flights to Tunisia and Egypt in October and November, respectively, with a fleet of six aircraft.
Ettir says the two companies, Libyan Airlines and Afriqiyah, share the same financial turmoil.
According to Tommy Fathi, CEO of Ajwa Aviation Services, an aviation service provider at Tripoli airport “both companies share a history of loss… (they were) heavily subsidised and connected to (the Gaddafi administration), which made them take decisions that went contrary to their business interests”.
Fathi believes that the merger of two public companies, announced in 2010, will return to the fore.
“This is not an easy task… To turn Libyan Airlines and Afriqiyah into a single and profitable entity, leaders must assume a downsizing of both the workforce and salaries, some of which are higher than in Europe,” says Fathi Tommy.
The new organisation appears to be focusing on the Mediterranean region in order to exploit a potential tourist market that has long been ignored.
The new plan demands a strengthening of the North African country’s airport capacity. Development work to increase the capacity of the airport of Tripoli from three to 20 million passengers, interrupted by the conflict, is expected to be completed in 2012.
Meanwhile, works on the expansion of the airport in the historic opposition stronghold of Benghazi, which were abandoned by Gaddafi, are also expected to be relaunched.