This article appeared on the cover of the Wall St. Journal in 2002, not certain how many of you may have seen it back then. It's a great overview. I've kept it through the years to give to my clients when they ask me why flights to the region are so expensive.
Kinshasa Is Poor, Dangerous
And a Boon for Air France
April 30, 2002
KINSHASA, Congo -- As the world's airlines grounded planes and slashed staff in November amid the industry's worst crisis in years, Air France announced it would begin to fly to this ravaged capital.
Kinshasa is one of the world's poorest cities, so unsafe for arriving crews that they get shuttled elsewhere for overnight stays. Taxiing down the scarred tarmac feels like driving over railroad ties. Managers charge extra to turn on the runway lights at night, and departing passengers can encounter several layers of bribes before boarding.
But Kinshasa also is lucrative, with little competition and a reliable stream of business travelers willing to pay high fares for access to Congo's mineral wealth. There are destinations like that across most of Africa, where flights can yield twice as much revenue per passenger as similar-length flights to the U.S. Air France, which flies to more African cities than any non-African airline, recently increased the number of seats it offers to Africa by almost 70% over last year, while it cut flights to North America. Even as many airlines struggle with losses, Africa is helping Air France remain profitable.
The French carrier's move illustrates a reality of the airline business. While carriers in the U.S. and Europe lobby for deregulation, they still rely on finding and maintaining near-monopolies to help the bottom line. Big U.S. airlines entrench themselves in a few airport hubs -- such as Delta Air Lines at Atlanta's Hartsfield airport and American Airlines at Dallas-Fort Worth airport -- and work hard to keep out competitors. In other countries, carriers press their governments to limit foreign competition. Japan strictly limits foreign access to Tokyo's Narita and several other international gateways, while Britain allows only two U.S. airlines to land at Heathrow because of a dispute with U.S. regulators.
France's colonial history and the recent bankruptcies of several Air France rivals -- Belgium's Sabena, Swissair and Air Afrique -- have helped the French airline mine Africa for exclusive markets. Air France is the main carrier serving more than a dozen sub-Saharan countries that are rich in minerals and oil and magnets for high-paying passengers. The airline's Kinshasa service turned a profit after only three months, while most new routes take months longer to make money, if they ever do.
Air France gets an edge over rivals in its old African empire -- which included Cameroon, Chad, Gabon, Guinea, Ivory Coast, Mali, Senegal and other countries -- thanks to linguistic, economic and cultural ties. The advantage extends even to a few markets such as Kinshasa, capital of the former Belgian Congo, where French is an official language and Paris has long wielded political influence. The airline's base at Charles de Gaulle airport outside Paris, which is now Europe's biggest transfer hub, also helps it fill planes with passengers from around the world.
Now it faces competition from another airline with historical links to Africa. Sabena, which filed for bankruptcy in November, has been revived as SN Brussels Airlines, and managers aim to grab back from Air France some of their African bounty.
"For now, they've got a jackpot," says Willy Charniaux, who ran Kinshasa operations for Sabena, pantomiming the pull of a slot-machine lever. Brussels Airlines on Friday relaunched flights to Central Africa. On Sunday, it resumed flights from Brussels to Kinshasa, where Belgian rule, from 1885 to 1960, gives it years of experience doing business. Brussels Airlines plans to offer as many as five flights a week, compared with Air France's two.
Air France "will never have the position we have in this country," boasts Mr. Charniaux, who has stayed on with the new airline. But he concedes that the French carrier is stronger in neighboring countries such as Senegal and Cameroon, which Brussels Airlines is also targeting.
Dubious Prize
Kinshasa hardly seems to be a prize worth fighting over. The capital reflects the nation's economic and political distress, with only 2% of Congo's 55 million population formally employed and a civil war still raging across wide swaths of the countryside. The city has so little usable office space that Air France had to open its new ticket office in a hotel owned by Sabena.
Kinshasa's N'djili Airport until recently had no working firetrucks or water supply. A cargo plane that crashed on landing in October 1999 burned for 90 minutes before firetrucks arrived. Six months later a munitions dump on airport grounds exploded with such force that it leveled five buildings, killed scores of soldiers and rained live shells on the runway.
The civil war forced Air France to pull out four years ago, but after Congo stabilized during the past year and Sabena halted operations last November, Air France sensed opportunity. On Jan. 8, Air France restarted service with two wide-body Airbus A340s each week.
As in many West African markets, Air France planes land in Kinshasa with their high-end seats filled by diamond dealers, gold traders and petroleum executives paying as much as $6,000 for a roundtrip fare. Aid workers and locals shuttling to and from Europe fill economy class, usually paying more than $1,000 for the carrier's cheapest round-trip ticket from Paris to Kinshasa.
Colonial ties have long been a boon to Europe's former imperial powers. Spain's Iberia is Europe's leading carrier to Latin America. KLM has the strongest European links in Indonesia, which was once called the Dutch East Indies. British Airways and Britain's Virgin Atlantic Airways boast of high profits on their routes to oil-rich Nigeria, which was ruled from London until 1960. Today, air routes to Africa still reflect how Europeans carved up the continent in the 1880s.
Africans seeking work in Europe head to the countries that once ruled them, while Europeans trading in Africa are most likely to do business where their grandfathers once did. The advantage for France is clear. More than half of all passengers flying between Ivory Coast and Europe go to Paris, according to Air France estimates. From Chad, Cameroon and Gabon, Paris gets around 60% of the traffic, and from Mali it's more than 75%. "In this part of Africa, the market is to France," says Bruno Matheu, an Air France executive vice president.
Because of the colonial connection, there also isn't much overlap in air service in any major destination, and incursions don't often succeed. In the former French port city of Abidjan, Ivory Coast, British Airways has launched and dropped service three times in recent years. Air France has eliminated its flights to Kenya and Tanzania, which are former British colonies where British Airways dominates.
Nor is local airline competition much of a problem. African carriers are struggling to survive and rely mainly on local fliers eager to save a few dollars. Air Afrique, the Abidjan-based carrier created in 1961 by 11 former French colonies, collapsed last year after lessors repossessed its fleet, stranding 4,000 staff. Kinshasa-based Air Congo is scrambling to cover its jet leases.
Africa offers Air France something else that's valuable: a fallback market to soak up staff and planes that would otherwise be pulled off unprofitable European and trans-Atlantic routes and idled at great expense. Since the terrorist attacks on Sept. 11, air travel has plunged. United Airlines, American and Delta are still in the red, while BA and Dutch KLM have warned of big losses for the fiscal year that ended March 31.
Air France has been able to make up for cutting Dallas and Miami flights with more flights and larger planes to African cities, including Bamako in Mali and Ouagadougou in Burkina Faso. The airline has also recently expanded its service to many French-speaking former destinations in the Caribbean and the Indian Ocean. Together with Africa, the former colonies should account for almost the same amount of Air France's revenue this year as North America, analysts say. Thanks largely to Air France's edge in these markets, Chairman Jean-Cyril Spinetta predicts a small profit.
Still, the operating costs of flying to Africa are 50% higher for Air France than flying to the U.S., and the logistical problems are much more challenging.
Gantlet of Security
The carrier must bring its own security officers to Kinshasa and 10 other African destinations. After passengers brave N'djili Airport's gantlet of assorted guards, inspectors and customs officials, each of whom may decide to extract some unexpected fee for boarding a plane, six uniformed Air France security officials again screen fliers and their baggage. Their work duplicates the airport's efforts, for which Air France pays fees up to three times higher than in Europe.
Kinshasa is considered so unsafe for pilots and flight attendants staying overnight between flights that the airline charters small planes to fly its crews as far as 500 miles away to Libreville, Gabon, where crime and Kalashnikov-toting soldiers don't menace visitors, as they do in Kinshasa. The flights cost several thousand dollars apiece.
Since Air France has no adequate caterer in Kinshasa, Air France must send return-flight meals from Paris, using ingredients chosen with an eye to longevity, such as rice and pasta. The meals reduce by around 20% the amount of inbound cargo space Air France can sell. The airline also won't carry cargo back to Paris because N'djili Airport lacks equipment to screen for terrorist threats.
"It's not worth the risk," says Joel Cathala, the airline's head of security, even though Air France forfeits as much as $50,000 in cargo revenue on each flight from Kinshasa to Paris.
Kinshasa is one of the few markets that continue to spark competition. Sabena, the predecessor of Brussels Airlines, started flying in 1935 to Kinshasa, which remained the carrier's largest operation outside Belgium long after the Congo gained its independence in 1960. Only Sabena kept flying to Kinshasa as mortars fell on the city during the 1997 civil war. That's when Mr. Charniaux arrived.
The 52-year-old Belgian has spent 20 years overseas for Sabena, in Moscow and across Africa. Barreling past a sprawling squatter city in a Toyota SUV, he remembers traveling the same rutted road five years ago under nighttime military curfew with an army escort. Returning in the mornings, he would dodge dead soldiers lying in the road, their corpses already beginning to grow bloated in the equatorial sun.
Now his job is to take on Air France, a daunting rival with its huge Paris hub, its global network of airline partners, and its long list of African destinations. But the Belgians understand the potential profits. In 2000, Sabena lost at least 8% on its flights to the U.S. but had margins above 10% on routes to its former colonies Congo, Rwanda and Burundi, according to an internal Sabena study.
That kind of difference in profit margins is common. Across the busy North Atlantic, where competition and seasonal variation forces heavy discounting, all airlines are lucky to break even with a plane 75% full. For Kinshasa and other parts of Africa, where traffic is steadier, European carriers can break even with their planes barely 60% full, and planes often fly 85% full. Because of rampant discounting between Europe and the U.S., airlines are happy if they can keep their average fare at one-third of the highest price offered in each class, airline managers say. On routes to Africa, average fares are about half the top ticket price.
In fact, the economics of flying between Europe and Africa today look less like flying across the Atlantic than they resemble aviation in the U.S. before deregulation in 1978. Premium fares are so high -- and discounting is so limited -- that simply filling the front section of a plane can cover most of the costs of a flight, airline executives say. Pricey economy-class tickets cover any slack in the forward cabins, and they remain high because supply stays tight.
Brussels Airlines recently bought up most of Sabena's assets in Kinshasa, such as storerooms full of spare parts and an independent catering kitchen, which allows it to avoid shipping return-flight meals south. It also has Mr. Charniaux's decades of experience with Sabena. That helps him negotiate hurdles that range from fuel shortages to corruption.
Mr. Charniaux says Congolese officials routinely demand free tickets and jobs for their relatives. His solution, he says, is to "say no," call his ambassador when things get bad and constantly cultivate "a few friends at high levels" with occasional free trips, extra baggage allowances or similar favors. Some Air France managers in Africa pin military-style stars to their jackets to appear more official and scare off anyone looking for bribes.
Brussels Airlines also knows that it won't have to spend much on marketing. In Africa, local sales are handled largely in cash at airline ticket offices, eliminating most of the fees that carriers usually pay travel agents and computerized reservation networks. And since so few Africans can afford to fly, little advertising is necessary. Carriers rely instead on direct marketing to target the few likely passengers and focus on wooing a handful of travel agents.
Still, Air France isn't taking the Africa market for granted now that a Belgian carrier is back. It has posted a bargain fair from Brussels to Kinshasa of $675, which includes a high-speed train ride from the Belgian capital straight into Charles de Gaulle airport. Air France has also increased its marketing in Europe with direct mailings to frequent fliers and press promotions. In Africa, where local airline service can be spotty, Air France is relying on its dependability to counter Sabena's successor, says Veronique Toussaint, an Air France route manager for West Africa.
"The best marketing is that the planes arrive on time," she says.
WSJ article on AF/SN to West Africa
Moderator: Latest news team
Who can blame Air France?
History moves fast: see what the French have on their hands now with Ivory Coast.
Fact is also that the congolese president doesn't want to talk to the belgian minister of FA.
Btw, most of the talk in that article is "barza"-talk.
Other facts are:
An airline does not fly somewhere if there is no traffic. (that is a long gone a 'cold war' option, of occupying the field)
A airline flying to a destination might create or attract traffic. (Brussels is hoping to survive on that , and that is NOT an anathema!)
It is logical that the gap left by the disappearing airlines, is taken by (an) other(s).
I do not remember comments of that kind when Lufthansa filled a important gap at Brussels Airport?
That's how business is also: opportunities.
About excessive high fares and monopolies, now.
Partly caused by a situation, of course. But certainly created.
Not by the locals, not the local administration*, but by outsiders who benefit of that monopoly. (Not only in air travel, cargo shipping, hotel business, but in many commodities and not at least in raw materials)
If the successor of Sabena flies to FIH, is because some instances see their benefit. Look who the godfathers of the successor are. And these are probably the same ones that lobbied long enough to get VG airlines on the ground.... Because if that one had been successful, it would have been a threat to their business, wouldn't it.
So who can blame Air France to take the opportunity, left by the disappearing carriers.
Iberia picked some grains, as well.
And flying your crews 500mi out of danger is an act of correct management. Something that can't always been said of Sabena, that exposed its staff to uncalculated risks and later did NOT show any respect to these staff members it put in life threatening situations. And I can testify of that, as being one of these staff members.
*when the locals see how the foreigners are stealing their country's wealth, why shouldn't they not have a tiny, minute slice of that? ( Bribes & Congolese officials routinely demand free tickets and jobs for their relatives).
The locals are stealing from the thiefs....? Look what happens in Ivory Coast: I will never forget the Ivorian recently saying in the TV news: "J'ai besoin d'un Francais, pour le manger". When you understand the African soul, this means: the French are eating me, eating the wealth we Ivorians produce, now I want a part of that.....
And of course there is always a 'shot' of racism. I once heard this in Africa: "Do you really think the blacks deserve all this [wealth]? And the white man was pointing at his huge residence with swimming pool, the cars and the boat on the trailer behind it....
Note 1: I refused a house with a swimming pool, while in Africa for Sabena.
Note 2: I could list the names of Sabena staff who used political influence to get a job or a promotion. Even to get a position, they were not entitled or did not qualify for. Re: Congolese officials routinely demand .... jobs for their relatives... It is the same everywhere, isn't it? Who thaught them? Politics, politics....
Fact is also that the congolese president doesn't want to talk to the belgian minister of FA.
Btw, most of the talk in that article is "barza"-talk.
Other facts are:
An airline does not fly somewhere if there is no traffic. (that is a long gone a 'cold war' option, of occupying the field)
A airline flying to a destination might create or attract traffic. (Brussels is hoping to survive on that , and that is NOT an anathema!)
It is logical that the gap left by the disappearing airlines, is taken by (an) other(s).
I do not remember comments of that kind when Lufthansa filled a important gap at Brussels Airport?
That's how business is also: opportunities.
About excessive high fares and monopolies, now.
Partly caused by a situation, of course. But certainly created.
Not by the locals, not the local administration*, but by outsiders who benefit of that monopoly. (Not only in air travel, cargo shipping, hotel business, but in many commodities and not at least in raw materials)
If the successor of Sabena flies to FIH, is because some instances see their benefit. Look who the godfathers of the successor are. And these are probably the same ones that lobbied long enough to get VG airlines on the ground.... Because if that one had been successful, it would have been a threat to their business, wouldn't it.
So who can blame Air France to take the opportunity, left by the disappearing carriers.
Iberia picked some grains, as well.
And flying your crews 500mi out of danger is an act of correct management. Something that can't always been said of Sabena, that exposed its staff to uncalculated risks and later did NOT show any respect to these staff members it put in life threatening situations. And I can testify of that, as being one of these staff members.
*when the locals see how the foreigners are stealing their country's wealth, why shouldn't they not have a tiny, minute slice of that? ( Bribes & Congolese officials routinely demand free tickets and jobs for their relatives).
The locals are stealing from the thiefs....? Look what happens in Ivory Coast: I will never forget the Ivorian recently saying in the TV news: "J'ai besoin d'un Francais, pour le manger". When you understand the African soul, this means: the French are eating me, eating the wealth we Ivorians produce, now I want a part of that.....
And of course there is always a 'shot' of racism. I once heard this in Africa: "Do you really think the blacks deserve all this [wealth]? And the white man was pointing at his huge residence with swimming pool, the cars and the boat on the trailer behind it....
Note 1: I refused a house with a swimming pool, while in Africa for Sabena.
Note 2: I could list the names of Sabena staff who used political influence to get a job or a promotion. Even to get a position, they were not entitled or did not qualify for. Re: Congolese officials routinely demand .... jobs for their relatives... It is the same everywhere, isn't it? Who thaught them? Politics, politics....