in Air Transport / Features

Angola's goal

Posted 27 November 2019 · Add Comment

Fly Angola’s general manager, Belarnicio Muangala, tells Martin Rivers why the start-up airline is betting on one of Africa’s most restricted aviation markets.

Angola’s aviation sector took a symbolic step forward in April, when the European Union lifted all restrictions on TAAG Angola operating in its airspace.
The state-owned flag-carrier had been trying to shake off its EU ban for more than a decade: first gaining an exemption for Portuguese flights; then securing the right to serve elsewhere in Europe with specific aircraft; and finally, being given unfettered access to the continent.
By removing TAAG from its blacklist, Brussels signalled that the mismanagement and corruption associated with the airline no longer poses a danger to the safety of flight.
On a broader commercial level, however, there remains little positive to say about civil aviation in Angola.
The government still keeps foreign airlines on a tight leash by restricting traffic rights at Luanda’s Quatro de Fevereiro International Airport, the country’s main hub. Its grip on the domestic market is even firmer: the closest thing TAAG has to a competitor is another state-owned entity, SonAir, which is a subsidiary of national oil firm, Sonangol.
It was in this stagnant business climate that Gestomobil, an Angolan investment firm, last year launched its own scheduled airline: Fly Angola.
“Since 2017 we have been forecasting the market for overall investment in the economy of Angola, and we identified a big opportunity in aviation,” explained general manager, Belarnicio Muangala.
“TAAG and SonAir were the only operators on some routes, and all the markets were underserved. We had non-regular operators like AeroJet, which is our air operator’s certificate (AOC) holder. We had Guicango. But all these operators mainly operated charter flights. And, obviously, because Angola has a big road and railway network problem, we identified this opportunity for aviation.”
Fly Angola currently sells tickets from capital city Luanda to Saurimo and Dundo in the east of the country, and Benguela and Lubango in the south.
Its route network – a mixture of direct roundtrips and triangle flights – is operated with a fully owned 50-seat Embraer ERJ-145 (registration D2-FDF) that has been placed on the registry of AeroJet, a local charter carrier.
Sub-contracting technical providers is an expensive way of launching an airline, but Muangala described the set-up as a temporary measure.
“It made no sense to go through certification and to invest before we were sure the market confirmed our business plan and all our forecasts,” he argued. “Now we are acquiring an AOC ourselves to gain operational control, and we think financially it makes more sense to add aircraft under our own AOC.”
As well shifting D2-FDF to its own registry, Fly Angola plans to acquire a second ERJ-145 “as soon as we can get the certification process concluded”. That unit will primarily be a “back-up” aircraft to keep flights running smoothly during scheduled maintenance work and aircraft-on-ground (AOG) incidents.
Before then, however, management expect to sign a dry lease for a smaller EMB-120 that can grow the network while AeroJet is still handling operations.
Muangala said the 30-seat aircraft would spend four days of the week based at Benguela’s Catumbela Airport, which he envisages becoming a “mini-hub” for Angola’s south-western provinces.
“This is something, I think, in the last five years no operator has done,” he noted. “But, because of the traffic we have carried from Luanda to Benguela and vice versa, we have been able to survey the passengers and see that not all of them have Benguela as [their] end destination. So, we are trying to now see the option to feed Benguela from Namibe, Lubango and Ondjiva.”
The EMB-120 will spend the rest of the week in Luanda, running triangle flights to Soyo and the northern exclave of Cabinda – the beating heart of Angola’s petro-economy thanks to its vast off-shore oilfields.
Fly Angola conducted test flights from Luanda to Cabinda in February and has already opened a sales office in the province. But, despite calling it the country’s “biggest route in terms of demand”, Muangala is braced for tough market conditions.
TAAG currently deploys mid-size Boeing 737-700s to both coastal cities, dramatically undercutting the seat costs that Fly Angola can achieve with its regional fleet. SonAir’s Beechcraft 1900Ds also make regular appearances at the two northern airports. Though smaller than the EMB-120, their presence eats up demand from contractors working with Sonangol.
Asked about opportunities for route development in the east of the country, Muangala noted that Luena is already served on a charter basis – primarily catering for financial companies – but there are no plans to make the link scheduled.
“The perspective for Luena is different,” he explained. “Luena is in the province of Moxico – bordered by Zambia – and to the south you have [the province of] Kuando-Kubango, which borders Namibia. So, in terms of trade and the social perspective, the populations of these provinces find it easier to go to Zambia or even to Namibia. Passengers don’t really seek to come to Luanda.”
Demand for air freight in the town is also limited due to the presence of the Benguela Railway line – the largest of its kind in Angola – which runs eastward from the coast through Luena and into the Democratic Republic of the Congo (DRC).
“So, we think [scheduled] flying in Luena would [involve] making a new hub again like Benguela and flying to the other points in the east like Saurimo or Dundo, or to the south to Menongue. This makes sense… but it’s worth experimenting with the Benguela hub first.”
When it comes to international markets, Fly Angola is pragmatic about the restrictions imposed on domestic carriers by the government.
The company has identified several destinations of interest across Angola’s northern borders with the DRC and Congo Brazzaville. Without naming specific cities, Muangala said his team is “one step ahead” of the competition and would be ready to launch flights “tomorrow” if given the green light.
That permission, however, will almost certainly not be forthcoming in the current climate. Management’s only realistic chance of cross-border flying thus hinges on striking up a partnership with a foreign airline that already has traffic rights at Luanda. Though not an impossibility, Fly Angola’s small size and limited operational experience makes this an unlikely near-term prospect.
Even so, Muangala believes planning for all eventualities is prudent – especially given strong support for open skies elsewhere in Africa.
“We don’t want to take any steps before we see that there is a political willingness for this. But we think it’s a matter of time,” he said. “The government will eventually have to think about internal companies being able to fly [overseas], because when they open up to the regional markets we will obviously see companies from Ethiopia, Kenya [etcetera] coming to Angola.”
Changing fortunes at the flag-carrier could also speed up the pace of liberalisation.
President Joao Lourenco has made privatisation a mainstay of his policy agenda since taking over from Jose Eduardo dos Santos in 2017, with TAAG front and centre of the sweeping reforms.
An earlier attempt to curb losses at the flag-carrier saw his predecessor award a management contract for TAAG to Dubai’s Emirates Airline. But the partnership quickly collapsed when the government – reeling from low energy prices – blocked Emirates and other carriers from repatriating funds.
Adamant that TAAG needs private owners as well as managers, Lourenco has upped the ante by reincorporating the flag-carrier as a public limited company and pledging to sell its equity. He has also ditched plans for a public-private consortium of domestic operators – dubbed Air Connection Express – handing the group’s order for six De Havilland Canada Dash-8 Q400s back to TAAG.
What all this means for Fly Angola remains to be seen, but Muangala is hopeful that its positive contribution to the country will not go unnoticed.
“We hope the government can reduce its influence in TAAG so that the private operators have a chance,” he said. “Angola is a country coming out of a recession and it’s tough for the private companies to fight against a company that has support from the state.”
 

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