Finance

Crumbling under a $110 million debt, Air Senegal loses its operating licence

Thursday, 14 April 2016 12:05

Though it was revealed on April 11, 2016, Senegal Airlines was stripped from its operating licence by Senegalese Civic Aviation agency ANACIM on April 2nd after the agency noticed that the airlines had no more planes, and a debt of $110 million. “Despite the government’s financial support, Senegal Airlines could not reach the development targets it set in its concession agreement. The agreement granted the firm exclusivity over Senegal’s air traffic rights,” government said according to information reported by local press.

The company was launched in 2009 after Air Senegal International shut down as tensions arose between its shareholders. It operated up to four aircrafts (three A320 and ATR 42-500) toward 11 destinations. However, their last two planes were sent back to their leasing companies and it kept using a small plane with 50 seats to serve Ziguinchor, Guinea Bissau and Cape Verde.

It should be recalled that the firm was supported by Karim Wade, the son of the former President, Abdoulaye Wade, when he was Minister of Transport. The government then held 35% of the capital and the remainder was divided among private investors. Senegal’s government while announcing the withdrawal of the licence, revealed upcoming launching of a new airline company.

Minister of Finance, Economy, and Planning, Amadou Bâ who made the announcement regarding the establishment of a new airline company, mentioned the ambition to make Senegal a “regional hub”. No detail was published regarding how the former firm will be sold, and most importantly how the new one will be financed. Despite indicators showing a 12% hike in volume of flying passengers in Africa, not all airlines in the region ride on that wave.

Many are the companies such as Camair-Co in Cameroon who, close to four years after it was launched, still struggle to restart their business, or position themselves in the market, both local and the international. Low-cost transports like Fastjet are also looking for a solid model. South African Airways and Kenya Airways still hold with the support of their respective governments. They are also successes such as Ethiopian Airlines, Asky Airlines or Ecair who still fare well in a market disputed by major international airlines (Air France, Brussels, Turkish Airways, etc).

Idriss Linge

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