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A transport-related memorandum of understanding signed between South Africa and Ethiopia on Friday was hailed as a precursor to an increasingly concerted effort by South Africa to ensure a further opening of the skies over the continent.

Speaking at the signing ceremony, South Africa’s Transport Minister Jeff Radebe, reiterated South Africa’s call for a more rapid liberalisation of the continent’s air-transport regime, in line with the Yamoussoukro Declaration of 1999, which committed states to an ‘open skies’ policy.

Currently, bilateral agreements are required to access destinations in most African countries. And while many countries, including South Africa, have paid lip service to the Yamoussoukro agreement, they still continue to stoutly defend their routes.

Radebe and his Ethiopian counterpart, Transport and Communications Minister Juneydi Saddo, announced that aviation transport was a key feature of the cooperation agreement.

In this area, the deal covered the liberalisation of air-transport services, including double designation and improving relations between South African Airways and Ethiopia Airlines. Technical cooperation on safety, security and airports development was also envisaged.

“One of the critical things indicating the robust relationship between Ethiopia and South Africa is the issue of opening the skies between the two countries. A few weeks ago, our government adopted an airlift strategy, which is the first step in ensuring that we liberalise our skies for the furtherance of the objective of connecting Africa. Ethiopia and South Africa will be taking the lead in making sure that we open the skies between our two countries. I hope our two airlines and others will take advantage of this space,” Radebe stated.

Government would unveil its airlift strategy, which supports the further liberalisation of the skies over Africa, at an Africa conference on aviation safety taking place in Johannesburg on Monday.

Pressured by unexpected surge in passengers, particularly those flying to and from North America, Ethiopian Airlines has been forced to scout for additional aircrafts. Its management is under negotiations with Varig, a Brazilian Airline and member of Star Alliance, to acquire two Boeing 777 airplanes through a long-term lease.

Varig Airlines has been flying the skies of Brazil since 1927. It now has a fleet of 81 aircrafts, boasting Boeing 727, 737, 767 and 747 airplanes as well as DC-10 equipment, according to its website.

Although leasing aircraft is not a new practise both for airlines and constructors, it will be the first time Ethiopian enters an agreement for a period of five years, assuming the deal is concluded successfully. One of the airplanes is expected to arrive in a month, when one of the two aircrafts leased from World Airways for the summer gets returned, according to sources with the airline.

Airline officials say, Ethiopian is entering this negotiation due to a gush in passengers this year, especially during what is summer in the United States. The airline is fully booked for August with passengers to and from North America due to the higher number of economy class passengers coming to Ethiopia, for the Ethiopian New Year, said officials from the booking services of the airline.

The number of passengers is consistently growing. Ethiopian carried 1.77 million passengers from July 2005 to June 2006, an increase of 14pc from the previous year.

Kagnew Fisseha, Ethiopian’s chief of Public Relations Department, attributed the increasing number of passengers to the season.

“Summer is usually the peak season for airlines all over the world,” he told Fortune.

Etihad, a national airline of the United Arab Emirates, has launched a new cargo flight to and from Addis Abeba.

On Friday July 28, Etihad’s inaugural cargo freighter landed at the Addis Abeba International airport at 4:40pm and departed with seven tonnes of exports less than an hour later.

The flight will operate every Friday, departing from Addis Abeba, stopping over in Abu Dhabi for about an hour, and continuing on to Frankfurt. This service is operated with one of Etihad’s Crystal Cargo A300-600F freighters, which offers 44tn of cargo capacity per flight.

“Ethiopia is one of Africa’s fastest growing economies, which is very much based on its blooming floriculture market,” said Ingo Roessler, vice president of cargo service at Etihad Airways. “By adding Addis Ababa to our Khartoum rotation, we will be expanding our customers’ opportunities across the region, and also further developing our perishable services.”

In addition to flowers, Etihad expects to transport meat and leather products from Ethiopia to Gulf destinations and Europe.

Cargo coming into Ethiopia, originating from Europe, the Indian sub-continent, the Far East and South Africa, will most likely consist of personal effects, hi-tech equipment, consumer goods, agriculture machinery and pharmaceutical products.

Of the seven tonnes of goods Etihad shipped on Friday, five were said to be meat being shipped to Abu Dhabi, and the remaining two tonnes were flowers destined for the European market.

Golden Rose, a British and Indian flower exporter in Tafki, 41Km west of Addis Abeba, consigned half of the flower load. According to the company’s Director, A. J. Shmji, the first shipment of roses is a trial for Etihad.

“We will be informed about the quality of the roses, when we get the report from our customers in Western Europe on Monday.”

Shmji was especially interested in the thermal blanket offered by Etihad’s service that should maintain the temperature of the flowers throughout the journey.

Etihad charges 1.75 dollars per kilogram for cargo shipped from Addis Abeba to Frankfurt, which is slightly cheaper than Ethiopian Airlines, which charges 1.8 dollars.

Kagnew Fisseha, manager of public relations with Ethiopian Airlines, told Fortune that Ethiopia’s flagship airline was not overly concerned by the competition and welcomed Etihad to the market. He said that Etihad would use the Ethiopian Airline’s new cargo terminal, which was constructed at a total cost of 133.1 million Br, with a capacity to handle 104,000 tons of cargo per annum.

Etihad was established in August 2003, and made its first commercial flight on November 12, 2003. With the launch of this new service to Ethiopia, Etihad now flies to 36 international destinations across the Middle East, Asia, Europe, Africa and North America.

Dawit Wubishet, manager of Addis Express Plc, which is the General Sales and Services Agent (GSSA) for Etihad Crystal Cargo in Ethiopia told Fortune that the commencement of the flight will move up to three times a week after September. He said that the thermal blanket is one of the best qualities that Etihad offers.

The Ethiopian Civil Aviation Authority granted the license for the airline’s operation a year ago.

Addis Ababa - The spirit of the Comesa Open Skies Agreement was being severely tested by the continuing failure of the Kenya Civil Aviation Authority, to allow Ethiopian Airlines to operate daily flights on the Entebbe-Nairobi route.

In May, the Addis Ababa-based carrier announced that it was resuming the flights it had suspended in 2005, with the relaunch planned for June 4. The flights were scheduled to depart from Entebbe daily at 13:00, two hours ahead of Kenya Airways’ afternoon departure to Nairobi.

The announcement brought immediate relief, with fares crashing from a peak of $295 to $200 for the 55-minute flight, currently monopolised by Kenya Airways. However, the Ethiopian Airways flights did not resume as scheduled, and the carrier now blames the Kenya Civil Aviation Authority (KCAA), accusing it of denying it landing rights.

The dispute could trigger a backlash against Kenya Airways, with travel agents in Uganda suggesting that Kenya was protecting the interests of its national carrier to the detriment of Ugandan travellers. The problem was not unique to Kenya though as South African Airways has frequently been labelled for unfairly monopolising routes.

Although Kenya Airways has recently gone on a charm offensive, offering discounted prices to East African destinations – Dar es Salaam, Kampala and Mombasa – on selected flights, the travel industry still feels that travellers were getting a raw deal in the absence of competition on the Nairobi-Kampala route. More than a month after the failed relaunch of Ethiopian flights to Kampala, the airline now says it has no idea when KCAA was likely to grant it landing rights.

“We don’t have the landing rights, we don’t know when we are likely to get them and we did not expect this because it smacks of monopolistic tendencies, said Ethiopian Airlines area manager for Uganda Ermejachew Regassa.

Regassa said the matter could escalate to government level, with Addis Ababa coming to the defence of its national carrier.

Ethiopian Airlines public relations manager Kagnew Fiseha said: “We are still discussing the matter, but it is likely to take some time to reach an agreement because we applied to operate under the Fifth Freedom Rights. This is still something new here and the two civil aviation authorities (in Kenya and Uganda) have to concur, but we believe we shall come to an agreement.”

Ethiopia had applied for the landing rights based on the provisions of the Comesa Open Skies Agreement, endorsed by member states in August 1999, which allows unlimited air services by Comesa-registered carriers within member states.

Under the Fifth Freedom Rights provided by the protocol, carriers could operate beyond the scope of the Bilateral Air Service Agreements (Basa), which normally would prevent operations such as those proposed by Ethiopian Airlines between Entebbe and Nairobi. The first phase of the agreement, which became operational in October 1999, allowed Comesa-registered airlines to operate on the cargo charters of member countries without hindrance.

Phase two, which became operational in 2000, allows Comesa airlines – other than the member states’ national carriers – to offer passenger services to destinations within the bloc.

Ironically, citing the same protocol, Kenya Airways last year refused to give up two frequencies in favour of Ugandan carrier East African Airways. Recently, citing the same agreement, Kenya Airways refused to back a fourth daily flight to Entebbe, fully sealing off both ends of the market.

The delays in resumption of Ethiopian Airline flights have not gone down well with Uganda’s travel industry, with complaints that the high ticket price between Entebbe and Nairobi, itself the result of lack of competition, was having a negative impact on Uganda’s tourism growth since it made Uganda an expensive destination.

Two years ago, research carried out by Ireland-based Travel and Tourism Consult International on behalf of the Uganda Sustainable Tourism Programme revealed that the absence of direct flights to Entebbe and lack of competition had made Uganda an costly destination.

Based on departures from New York during peak season, the results showed that it was cheaper to travel to Johannesburg or Nairobi than Entebbe, even when the flights first stopped in Uganda.

Industry watchers have said that, apart from playing for time to allow Kenya Airways to re-align itself to competition, KCAA would eventually have to relent as continued denial could set a precedent that could hurt Kenya Airways’ expansion plans in Comesa countries, if member states take the cue and reciprocate.

The impact of Ethiopian Airlines on the route was also debatable as the flights specifically target the point-to-point segment of the market, which only constitutes about 30 percent of all departures from Entebbe through Nairobi. This segment was also tilted in Kenya Airline’s favour because it was dominated by business travellers who require early morning departure and late return.

KQ has both, while Ethiopian Airline’s mid-afternoon departures and returns would be trying to attract the minimal leisure travel segment, already weighed down by high taxes on air travel and competition from road transport

Lobtrans (Pty) Ltd, the only local suitor for a strategic partnership in Air Botswana’s (AB) privatisation says it is ready to turn around the national airliner if it can beat seven other competitors.

The Lobatse-based company is part of the Asmal Group, whose Chief Executive Officer, Sam Asmal told Mmegi this week that they are ready to improve the fortunes of Air Botswana and make it a regional and profitable outfit. They are bidding for a stake in Air Botswana through one of their companies called LOBAIR.

“We have got the experience and the expertise to run the airline and make it profitable. We know safety standards and maintenance,” Asmal said.

At the time of the interview Air Botswana had not yet furnished his company with database on its performance, but he was confident that it would make profit if it opened as many regional routes as possible. “If someone wants to travel from Lusaka to Gaborone they have to fly to Johannesburg first so that they can fly here. This could be addressed by opening a direct route from Gaborone to Lusaka,” Asmal said.

He pointed out that Botswana has the advantage of its geographic location in the centre of the SADC region. He said he has noticed that AB had not been competing enough because South African Express dominates the route between Gaborone and Johannesburg.

The fleet for the tiny airliner is extremely non-economical and is occasionally grounded because of poor maintenance, he said. He added that the route between the two cities needs more flights. With close to 300 tankers transporting fuel to SADC countries and experience in aviation industry, Asmal said that his company intends to localise all engineering and technical jobs to create employment for Batswana when it takes over Air Botswana.

“Everything will be done here and we are going to provide full training of locals,” he said. The Asmal Group has close to 600 employees and has offices in Durban, Johannesburg, Cape Town, Gaborone, Francistown and the headquarters in Lobatse. It services all SADC countries except Angola. Lobtrans, which surprised the market when its bid was announced is competing with six firms - Comair, SA Airlink, SA Inter Air, African World Airways, Ethiopian Airlines Enterprise, and Switzerland based Execujet.

A recent report by South African Business Day newspaper shows that Comair is listed in the Johannesburg Stock Exchange and operates British Airways and Kulula.com in South Africa. On the other hand, SA Airlink services smaller towns in South Africa and Swaziland, the newspaper said.

The paper quoted SA Airlink CEO Roger Forster as saying that AB has interesting opportunities in the region while Comair spokesman Stuart Cochrane said that they would like to expand into Africa if they take over AB.

Public Enterprises Evaluation Privatisation Agency (PEEPA) CEO Joshua Galeforolwe said that the next step will be to have a bidders conference sometimes next month and thereafter the bidders could present their tender documents.