Zambia banks on a long-term strategy

Increased service: Proflight’s CRJ-100 started flying daily to Johannesburg in December. Picture: Proflight.

Zambia air carriers operating domestic and regional services are busy trying to re-establish as many routes as possible following the reopening of borders, which largely started from October across the continent.

Jim Belemu, CEO at Mahogany Air, said the unprecedented situation caused by the Covid-19 pandemic had created significant challenges for the airline. “Soon after the declaration of the coronavirus we saw a drop in passengers and the cancellation of forward bookings,” he recalled.

With the suspension of South African Airways’ services on the key route to South Africa, Proflight Zambia, with a base in Lusaka, increased its frequency to Johannesburg to a daily service from mid-December.

The airline said following months of steep declines owing to travel restrictions brought about by the pandemic, the increase in frequencies on local and international routes is a sign that the industry may be headed for a recovery.

It also stated that the uptick in travel demand was a positive sign after what had been, and still is, a challenging time for the Zambian aviation industry. However, while signs of recovery abound, the airline is still not relenting on its Covid-19 prevention measures.

Recently established Royal Zambian Airlines, a subsidiary of Royal Air Charters, also launched services on the Lusaka to Johannesburg route in December 2020 with EMB145 equipment.

In the meantime, Mahogany Air has been looking to secure routes around the region and, most importantly, the Johannesburg route too.
Weston Mapani, a Lusaka-based air transport consultant and once chief of operations at the former Zambia Airways, believes there is a direct connection between the demand for air travel and the performance of the local economy.

“There is also the issue of sovereign debt by the Zambian Government. Most of the income is spent on paying debts, but even this is failing. The result is there is no public spending to stimulate the Zambian economy,” he explained.

Real gross domestic product (GDP) is projected at negative 4.3% in 2020, the first recession since 1998, according to Mapani.

“Disruptions in the supply chains and containment measures have had a severe impact on sectors such as tourism, construction, wholesale and retail trade, as well as manufacturing,” he said.

It is anticipated that the ongoing airport developments around the country will have a long-term positive impact on the future development and demand for air travel, not just in Zambia but the entire sub-region.

Just as the pandemic hit Zambia in March, construction progress at the Kenneth Kaunda International Airport (KKIA) in Lusaka had reached 87% completion, with the new passenger terminal at 98% complete.

Local sources say the new airport facility is expected to open for commercial services before Zambia’s general elections in August 2021.

Just prior to the onset of the pandemic, the Zambian Government had finalising a joint venture with Ethiopian Airlines (ET) for launch of the new Zambia Airways. The project has been in the works for several years. However, among the professional aviation community in Zambia there have been growing calls for caution over the venture.

“The partnership with Ethiopian Airlines was single-sourced, which was not put to the wider world to bid,” Mapani said.

He feared that the partnership agreement signed by the Industrial Development Corporation of Zambia and Ethiopian Airlines, which includes damp lease, where ET will provide aircraft, maintenance, flight dispatch, management, financial control, passenger-handling, catering, and sales, tips in favour of Ethiopian.

“A lot of Zambian Government money will be lost and the airline is not expected to make any profit in the next 10 years of the agreement. However, Ethiopian will make money through all these services it will be providing,” he explained.

There are also concerns that the new airline will be confined to a small regional feeder for ET, with no scope for intercontinental growth.

There are currently three local airlines providing air travel services on both domestic and regional operations – Proflight, Mahogany Air, and Royal Zambian Airlines. “If Zambia Airways begins its operations, that will make the small Zambian market overcrowded, coupled with low demand because of the Covid-19 pandemic. The four airlines will compete themselves out of business and the ones with lesser muscles will close. The market right now is only good for one domestic airline and the rest are surplus to the industry requirements,” Mapani warned.

In June last year, the Zambian Government approved an eight billion Kwacha ($439 million) economic stimulus package through a Covid-19 bond.