AIR TRANSPORT SPECIAL REPORT Libya’s two international airlines are due to join forces. But when? The timetable for the long-planned merger between Libyan Airlines and Afriqiyah Airways continues to drag, with no clear indication of precisely when the two Tripoli-based carriers will become one. Keith Mwanalushi and Alan Dron have been looking at the airlines. ANATOMY OF A MERGERibya’s booming oil and gas-driven economy, coupled economies of scale but also greatly enlarge their route with the construction of new airports, is attracting network, giving far more travel options to passengers. Llucrative business and leisure opportunities. Assisting Bringing the two airlines together has been mooted for to drive that growth are the country’s two national carriers, several years and, in 2007, a move towards this goal was put now bracing to enjoy the tailwind. in place with the creation of a new state-owned entity, Libya When the Libyan government granted approval for the Afriqiyah Aviation Holding Company (LAAHC). This merger of Afriqiyah Airways and Libyan Airlines, it was not became the parent body for both carriers, as well as to several quite clear as to what direction the merger would take. other related companies covering such fields as aircraft Taking into account the complexities involved in airline maintenance and catering. mergers, question marks are still hanging over the deal. Ultimately, the aim is to privatise these various component Industry experts in Libya have been quoted as saying that companies, although no timescale has been publicly the intention is to have one carrier; but with different announced for privatising the two carriers. functions, similar to that of Qantas, which operates both the At the Arab Air Carriers Organisation (AACO) annual mainline and Jetstar Airways. meeting in Cairo last October, Afriqiyah chairman Sabri Combining the two airlines’ strengths would transform Shadi was quoted as saying the airlines were on Continued them from moderately-sized operators to a much more the verge of merging, a process that was likely on Page 16 substantial entity. This would not only give them improved to happen within weeks rather than months. 15 AIR TRANSPORT SPECIAL REPORT CONTINUED FROM PAGE 15 However, other senior Afriqiyah officials have since told Arabian Aerospace that no timetable for combining the two carriers has yet been set. “Discussions are going on but the date has not been decided,” said CEO Rammah Ettir. He suggested the end of 2011 was a likely timescale but admitted: “That’s only a guess – there’s a lot to be done.” Similarly, commercial director Khaled Sawese admitted he was not sure when the merger would be consummated. Among details to be thrashed out was the name under which the companies will operate. It was possible that both names and liveries would be retained, but with a single management team, said Sawese. However, links between the two airlines are already increasing, he said. Co-operation is under way in the fields of planning and pricing, and code-sharing has been adopted on several routes. Both companies have joined Arabesk, the informal ‘network co-operation project’ created under AACO’s aegis. Arabesk, whose membership now consists of 11 carriers, including major players such as Etihad, Gulf Air and Egyptair, aims to co-ordinate schedules, reduce duplication of effort and link members’ destinations. “The benefits will amount to at least a three to five per cent increase in revenue,” said Sawese. “We will codeshare with many airlines to destinations where we don’t operate.” “The market is growing and promising new tourism sectors. In Tripoli, Apart from their Arabesk venture, 2011 will see alone, at least 10 five-star hotels are under both carriers aiming to increase their passenger very fast in Libya...you can construction with a similar number of four and numbers, said Ettir. see this by the demand in three-star hotels already complete. The two carriers have different passenger Captain Zaghonni said: “The market is growing profiles. Analysts indicate that Libyan nationals flights to Tripoli. All the very fast in Libya, with the development of new are more inclined to fly with Libyan Airlines, airports, construction and oil exploration. You can whereas Afriqiyah has a broader clientele of main airlines fly in at least see this by the demand in flights to Tripoli. All the African and European passengers travelling from main airlines fly in at least once daily, even twice north to south. once daily, even twice daily during the summer season.” Libyan Airlines currently serves domestic and The latest newcomer on the scene is British regional routes, while Afriqiyah is strong in the daily during the summer Midlands (bmi), which announced the start of African and long-haul sector. Libyan Airlines – season.” Heathrow-Tripoli services from February 2011. simply known as LN by its employees – dates The new flights are in addition to those already back to its establishment in 1964 and was Captain Fauzi Zaghonni offered by Libyan and British Airways. previously known as Libyan Arab Airlines. The LN hopes to offer a competitive product to company faced the full brunt of UN sanctions; the Zaghonni confirmed that Libyan Arab had 6,500 counter competition. An MOU signed with political landscape made it difficult to maintain employees, a drastic reduction to the current Airbus covered the purchase of 15 new aircraft, normal commercial operations. workforce of 2,100. including four A350s, four A330s and seven “Aviation in Libya suffered damage but we kept A US embargo continued for four years after A320s. The first new A320 was delivered in working while the embargo was on,” said Captain UN sanctions were lifted, placing Boeing as a September 2010 and the A330s are expected by Fauzi Zaghonni, assistant commercial director supplier out of range, so the airline turned to the end of 2011. The older leased A320s are for planning and development at Libyan Airlines. Airbus to equip its fleet. A letter of intent was expected to be phased out gradually. Libya’s isolation meant that there was a ban on signed in 1999 but the backlog of orders meant With the arrival of the new A320s, LN is keen all flights to and from the country and the supply that LN had to wait until 2006 to receive its new to showcase a modern side to Libya. The new of aviation equipment was prohibited. By 1992, fleet. Lease agreements were signed in the interim. Airbus deliveries are equipped with Internet all international operations came to a halt. After the establishment of Afriqiyah, there was connectivity supplied by OnAir – a trend that is Prior to the sanctions, the fleet consisted of a general restructuring of the airline industry in sweeping the airline industry. some 35 aircraft – this was reduced to just two, a Libya that led to a change in name from Libyan The airline also operates the CRJ-900, Fokker F28 and a Boeing 727 by 1999. Arab to Libyan Airlines. including the next generation versions fitted with For a little more than 10 years, the company In recent times Libya has embarked on reforms all leather interiors. “We have configured the was forced to fly only domestic routes with ageing aimed at rationalising its public and private CRJs with six business class seats in addition to equipment. Reportedly, there were some days sectors and promoting trade and foreign economy, which is unique – you don’t see a that not a single aircraft was in the air with some investment. The opening up of the economy has premium offering in Europe with Continued 450 pilots sitting idle. triggered the interest of opportunity seekers this type of aircraft,” boasted on Page 18 Over-employment was also an issue; Captain attracted by the lucrative energy, construction Captain Zaghonni. 16 What’s your personal best?... AkzoNobel Aerospace Coatings are bringing consistent, reliable quality to the Base Coat/ Clear Coat arena. The all new Aerodur© Base Coat/Clear Coat system provides a cost effective solution for every paint shop that wants to produce top-quality fi nishes with a faster turnaround, allowing you to set record process times. 3001 Base Coat 3002 Clear Coat • Can save up to 30% process time • Extends durability • Provides high gloss and color retention www.akzonobel.com/aerospace AIR TRANSPORT SPECIAL REPORT CONTINUED FROM PAGE 16 a 737-400 that carried 75 passengers from Tripoli route from Tripoli to the Far East. In addition to the five CRJ-900s already in to Khartoum. As expected, the new flights are carefully service, the airline recently placed an additional The airline was established within the planned to connect with several African cities order for three CRJ-900 Next Gens plus three framework of linking Africa to Europe and the such as Abidjan, Accra, Bamako, Lagos and options. The order is valued at $131.5m and if all rest of the world, and providing year-round Niamey. options are exercised it could rise to $267.8m. cheaper fares. In fact, the airline is popular with Additional capacity has been added on the Captain Zaghonni is keen to have on-board adventure-seeking backpackers and independent Tripoli-Cairo route that is now served six-times connectivity on the CRJs too. He said that LN has travellers between Europe and Africa. per week. Also, the airline rescheduled its flights asked Bombardier and OnAir to study the The airline’s goal is to improve accessibility to to Amsterdam, adding a fourth weekly flight that possibility of retrofitting the CRJs. “It is an option major African cities through Tripoli with took effect from January 2011. – we are trying to get a compromised deal from connections that make it possible for travellers to Ettir is determined to see more long-haul both parties.