in Air Transport / Features

DRC flag-carrier wants to wave goodbye to the past

Posted 17 November 2016 · Add Comment

With a little help from Air France, Congo Airways is mapping out a safer future for the Democratic Republic of the Congo's notoriously deadly skies. Martin Rivers spoke to deputy chief executive Jerome Maillet about the one-year-old flag-carrier's progress.

In June, Congo Airways became the first airline registered in the Democratic Republic of the Congo (DRC) to be granted an internationally recognised air operator’s certificate (AOC). The flag-carrier now plans to launch regional flights in the fourth quarter, expanding beyond its existing domestic footprint.
The fact that DRC’s Civil Aviation Authority (CAA) previously lacked the technical expertise to issue AOCs – one of its core regulatory functions – speaks to the deficiencies and safety lapses that have long dogged the country. There have been at least 24 aircraft crashes in the DRC since the turn of the decade, claiming 167 lives and dragging down Africa’s overall air safety record.
Yet, despite being notorious for lax standards, the continent’s second-largest country remains a hugely attractive aviation market – boasting territory the size of Western Europe, a population of 85 million, and an average economic growth rate of 8% per year.
Having been set up with help from Air France Consulting, state-owned Congo Airways is now leading the charge to unlock the sector’s true potential.
The flag-carrier began operations in October 2015 and has, to date, received $100 million of start-up capital from the government, most of which went on acquiring two Airbus A320s and two Bombardier Dash 8 Q400s. As well as reforming DRC’s tainted reputation overseas, management are confident that they can usher in a new era of prosperity at home.
“We are at the right moment really to grow this airline, and to turn a page from the past,” explained Jerome Maillet, Congo Airways deputy chief executive and accountable manager. “We have the strong fundamentals, we know where we want to go, and the idea is just to execute. Our issue, as with any start-up, is having perfect execution.”
Congo Airways presently flies between eight domestic points: capital city Kinshasa, Goma, Kananga, Kindu, Kisangani, Lubumbashi, Mbandaka and Mbuji-Mayi. Both A320s and one Q400 are based in Kinshasa in the west, while the second Q400 operates from Goma in the east.
Negotiations over an order for “several brand new” narrow-bodies have reached an “advanced” stage, with the aim being to deploy 10 single-aisle aircraft by the end of the decade. Fleet commonality will be preserved in order to keep cost and complexity low, though management does not rule out acquiring some stretched A321s.
Asked about planned route launches, Maillet said that Johannesburg in South Africa and Luanda in Angola would become the first international destinations in December. Other regional points being considered include Pointe Noire in Congo-Brazzaville, Douala in Cameroon, and Libreville in Gabon. Domestic expansion will, meanwhile, focus on four cities: Bunia, Kalemie, Bukavu and – pending upgrades to fire-fighting equipment at its airport – Gemena.
“Domestic is a big market for us. We have sectors of more than one-and-a-half hours, so when we say domestic it’s like regional for other carriers,” he affirmed.
“But it helps because that’s good for the economics of the airline. Usually domestic routes are really lossmaking. This is not the case in this country. The domestic routes are a foundation to build a sustainable operation and that will help us go outside, internationally and regionally.”
Despite the attractive yields on offer for many internal DRC routes, Congo Airways is exercising caution before entering new markets. The allure of profits has, at times, prompted questionable decisions by its local rivals, compromising safety standards and ultimately costing lives.
“The mandate we have is really to work on safety, which is the core of any airline,” Maillet stressed. “It means a lot in the DRC because, unfortunately, the country has been plagued by poor accident statistics. We have been working very hard to raise the standards.”
Mbuji-Mayi in south-central DRC is one macabre case study. Last December, Congo Airways suspended A320 flights to the city after its inspectors determined that the airport runway was poorly maintained.
Other airlines failed to follow suit – lacking any instructions from the CAA – and within days a fatal incident had occurred. An A310 freighter overshot Mbuji-Mayi’s runway on Christmas Eve, ploughing into nearby houses and killing eight people. The disaster came just four months after a Boeing 737-300 operated by Korongo Airlines, the now-defunct local partner of KLM, was damaged by loose tarmac slabs at the same airport.
“The CAA said you can go [and operate the route] but we said we are not happy,” Maillet recalled.
“Now we have resumed this destination thanks to the Q400, but we don’t want to place a narrow-body into this city. Our competitor [FlyCAA] continues to fly there [with A320-family jets], and we have nothing to say about it. What we care about is that we did our analysis and we decided it was not as per our standards. We lost money not flying, of course, but we were very happy because we could demonstrate it’s not just words when we say we place safety as our core value.”
A similar story is unfolding in Gemena, where the “totally crazy” yields on offer have failed to overshadow management’s concerns about fire-fighting equipment.
“Others are flying; they are very happy, fully booked,” Maillet shrugged. “Fair enough, good for them. But that is not how we want to play. This [safety-conscious approach] is the vision of the chief of state; it is the vision of the prime minister. It serves Congo Airways, it serves the CAA, it serves the country, and it serves to bring back credibility and respectability.”
Congo Airways can afford to take the high ground over such matters thanks to its financially strong shareholder, but Maillet knows that the government will not be writing large cheques forever.
To the contrary, officials are already talking to prospective investors about a 20-25% part-privatisation of the flag-carrier. Ethiopian Airlines boss, Tewolde Gebremariam, has publicly announced his involvement in the process. The Addis Ababa-based airline previously planned to establish a subsidiary in DRC, building on a regional partnership strategy that has seen it acquire stakes in Togo’s Asky Airlines and Malawian Airlines.
Maillet declined to comment on specific negotiations but confirmed that “major players in the industry” are engaged with the government. African and Middle Eastern investors have shown the most interest, he said, while Asian entities are also in the running. Air France has ruled out buying equity in Congo Airways.
With political interference an endemic problem across Africa, the deputy chief executive praised Kinshasa’s “hands-off” approach to management. “The government understands it is not its job to run an airline,” he stressed. “It wants private eyes to oversee and conduct the strategy.”
One way of underlining this commercial mind-set is demonstrating that the political class receives no special treatment from the flag-carrier.
“Everyone pays. All ministers pay, all government members, senators, parliament members – they all pay for their tickets,” Maillet enthused. “And if they are late, they don’t board. We’ve had stories like that – at minister level – where we said ‘no’ and we closed the door. This is absolutely key to the success of any airline, and it is one of the things usually said about Ethiopian Airlines: [that there is] no interference.”
Kinshasa’s appetite for an efficient, transparent and open civil aviation market is evident in other ways. Whereas many African flag-carriers lobby for protectionism in the form of restricted traffic rights – a regressive strategy that keeps them in business, but only by preserving high ticket prices – Congo Airways has a clear mandate to boost affordability.
The government understands that lower fares will “democratise” air travel in the country, in turn catalysing price-sensitive demand and accelerating economic growth.
“Really, to unlock the potential and to tap into the mass market, we need to decrease the yields,” Maillet affirmed. “And that’s what we are going to do as we grow the fleet size, as we reach critical mass. We want reasonable fares. We are not going to take advantage of monopoly.”
In tandem with the domestic and regional expansion, Congo Airways is also working on a “standalone project” to launch wide-body flights by 2018. Talks are under way with Boeing, Airbus and several lessors about the induction of two long-range aircraft for flights to Europe, the Middle East and Asia. Maillet identified Kinshasa-Dubai-Guangzhou as “very probably” one of the inaugural routes, while the wide-bodies would also be deployed to one unspecific African destination.
However, expansion into Europe will not be as straightforward. DRC is currently listed in annex A of the European Union’s air safety list, meaning that all operators registered in the country are banned from EU skies.
The hope is that Congo Airways can secure an exemption from the blacklist by being re-designated in annex B – the same mechanism that allows TAAG Angola to fly to Portugal in spite of its home nation’s ban.
The first step towards reassuring Brussels will be passing the International Air Transport Association (IATA) operational safety audit (IOSA) – the global benchmark for aviation safety compliance – which Maillet expects to happen in January 2017. Congo Airways will then seek EU recognition as an approved third country operator (TCO) by the second quarter, paving the way for route launches to the continent.
If this is successful, Air France will ultimately deserve much of the credit. Its consultancy division was responsible for drafting the initial business plan – at the time recruiting Maillet as a freelancer – while its maintenance unit, Air France Industries, still supports the flag-carrier on a daily basis.
The International Civil Aviation Organisation (ICAO), the aviation body of the United Nations, is now assisting with broader efforts to reform the DRC’s safety culture. ICAO personnel visited Kinshasa in May to finalise preparations for a “safety oversight capacity-building project” funded by the World Bank.
“The project will involve a review of the DRC’s aviation legislative framework, its CAA’s structure and organisation, and training needs for technical personnel with safety oversight functions,” a spokesman for the UN agency said.
If the multi-pronged reforms fail to secure EU access for Congo Airways, Maillet said the company would consider wet-leasing wide-bodies from an approved operator. ECAir, the flag-carrier of Congo-Brazzaville, has adopted that strategy by sub-contracting Switzerland’s PrivatAir to serve Paris with a 767-300ER. But the partnership model is costly and lacks prestige when compared with deploying your own metal.
With a growing reputation, a financially stable government shareholder, and an extensive network of foreign support, doors are also opening for Congo Airways to engage global aircraft financiers.
“It is true that, when we started, no lessors wanted to talk to us,” Maillet smiled. “This is why we decided to go down the acquisition path. Now, we have many lessors talking to us.”
 

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