Wednesday, December 26, 2012

■ MALAWI: Privatization Commission unveils shortlisted bidders for Air Malawi; Ethiopian in, BA Comair out.

Malawi's Privatization Commission, the governmental department charged with overseeing the sell off and eventual privatization of national carrier Air Malawi (QM), has announced a shortlist of 5 potential investors for Air Malawi (2012) Limited, whittled down from the original 11.

Air Malawi's fleet in Lilongwe
Air Malawi's fleet in Lilongwe (AirMalawi)
Due to the terms of its Bilateral Air Service Agreements (BASAs), the shareholding attributable to Malawian Nationals plus the remainder of Malawian Government's shareholding in Air Malawi, is to amount to at least 51 %, with any foreign investor taking a maximum 49% stake. 

The lone Malawian investor is said to be Air Express Limited (Malawi), whilst the four remaining potential foreign investors have been identified as: 
  • Ethiopian Airlines (Ethiopia), 
  • Globe Business Network (Botswana), 
  • Fly Africa (South Africa), 
  • Alpha and Omega/Abrina (South Africa)
In early December, three local Malawian companies - Global Airlines, Mpatsa Holdings Limited and CDH Limited - were disqualified from the bidding owing to their failure to "demonstrate evidence of financial capability to recapitalize the airline based on a sound business model."

Ethiopian are pushing hard to establish themselves in the region with the carrier in the process of finalizing a possible joint venture with neighbouring Zambia, with the new carrier due to debut in late 2013. Regarding the possible selection of Ethiopian as a partner in Malawi, Tewolde Gebremaraim, Ethiopian's CEO, during the African Airlines Association's (AFRAA) 44th AGM in South Africa in November,said:
They are our African brothers and we want to share our experience,” Tewolde said.

Twice shy suitors, South Africa's Comair Group - using their British Airways franchise, BA Comair as a vehicle - were surprisingly excluded from the final selection process after failing to submit a formal bid before the 17 December deadline.
The PC (Privatization Commission) is obliged to disclose that a representative of Comair Limited of South Africa had approached the commission, a few days before the closing date, to intimate that Comair would not be submitting a proposal. Instead, Comair referred the commission to the 2009 negotiated draft shareholders agreement with the Government of Malawi,” said the PC on Friday.
Source [Mkali]

The Privatization Commission did not completely shut the door on Comair adding that despite their being out of contention, Comair's intention to establish a new airline under a British Airways franchise would provide the Government of Malawi "with a fallback position in the event of the current bidding process not yielding an eligible preferred bidder."