Showing posts with label Bankruptcy. Show all posts
Showing posts with label Bankruptcy. Show all posts

Wednesday, November 14, 2012

► ZAMBIA: Zambezi Airlines ceases ops until 2013?

Zambezi Airlines logoNews reports out of Zambia are claiming that private carrier, Zambezi Airlines (ZJ), has ceased operations owing to a serious liquidity crunch.

Friday, November 9, 2012

■ ZIMBABWE: Unlucky FreshAir hoping to relaunch in December as 1Time officially heads for liquidation.

FreshAir logoNu-Aero, the 51% majority shareholders in Zimbabwean LCC, Fresh Air (Z7), have stated that flights between Victoria Falls and Johannesburg (ORTIA), South Africa "could" resume as early as next month, in time to capitalize on the Christmas period, if a suitable technical partner can be found.

Friday, November 2, 2012

■ SOUTH AFRICA: Knives out for SAA as 1Time goes under.

Embattled South African LCC, 1Time (T6), has filed for liquidation and has subsequently ceased operations as of 3pm this afternoon, 2 November 2012.

Wednesday, September 5, 2012

► NIGERIA: Air Nigeria calls it quits as Dana Air's licence is reinstated.

Air NigeriaOn a day of two contrasting fortunes,  Jimoh Ibrahim's troubled venture Air Nigeria (VK), having teetered on the brink of collapse for some time, is to call it quits from 10 September 2012 following months of uncertainty in which leased aircraft were ceased, company directors arrested and allegations of safety oversights and tax evasion.

In a statement, the company's management blamed the suspension of operations on "staff disloyalty and a weak business environment" though remained resolute in the possibility of returning to viability next year by retaining 50 "loyal" members of staff from various departments, selected with a mandate to recommence operations within 12 months. All other employees however, had been laid off effective from their last day of work on their various routes.

Friday, August 24, 2012

► GHANA: More woes for CTK CiTylinK as it loses its leased Fokker 100 over unpaid bills.

Citylink Ghana In a sign that times are getting even tougher for Ghanaian domestic carrier CTK CiTylinK Airlines (CTQ), it has emerged that its Fokker 100 (MSN: 11407 | 9A-BTD), wet leased only recently in May of this year, has been returned to its owner, Croatia's Trade Air, as a result of the airline's inability to pay its leasing fees.

The airline suspended operations nearly 2 weeks ago.

CTK Citylink Airlines Fokker 100 in happier times.
CTK's now ex-Fokker 100 in happier times.
Switzerland's CH-Aviation reports that the aircraft has already been ferried from Accra to Europe where it is currently operating a short term ACMI contract on behalf of a Slovak client.

As competition on Ghana's domestic and regional routes heats up,  and with fares being slashed to as low as GH₵50 (USD25) for a one way flight from Accra to Kumasi - a flight that usually costs GH₵100 (USD50) - it seems increasingly likely that CTK CiTylinK will be the first casualty in the price war.

Wednesday, August 22, 2012

► SOUTH AFRICA: Financial vultures gather around a defiant 1Time as USD40million debt millstone takes its toll.

Financial news-wires were today abuzz with reports that following an urgent board meeting, 1Time Holdings, parent company to South African LCC 1Time (T6) and Jetworx Aircraft Services, had filed for "Business Rescue" for the two companies (essentially a 3 month long protection period from creditors that may want to file for liquidation while you are turning the business around, more or less equivalent to filing Chapter 11 in the US) as revelations came out that the company has nearly USD40million worth of short term debt to settle with creditors by 31 August, amongst whom are the South African Air Traffic and Navigation Services and various fuel suppliers. Unsurprisingly, by the end of trading today on the Johannesburg Stock Exchange, 1Time shares had plunged by 50%.

Under South African Law, 1Time should now pass into the hands of The South African Companies Intellectual Properties Commission (CIPC) who are responsible for approving a Nominated Business Practitioner who in turn will oversee 1Time's business plan reform process over the coming next three months.  How this will impact the airline's Zimbabwean LCC venture - Fresh Air - only recently launched, is uncertain.

An announcement by the CIPC on whether or not 1Time is eligible for "Business Rescue" will be made on Thursday 23 August.

1Time at Harare Airport, Zimbabwe
1Time in Zimbabwe. (Luck Brown)
The filing for "Business Rescue" comes after a very tumultuous first 6 months of the year for the South African carrier in which its previous CEO (Rod James) resigned following a disastrous record USD$18million loss for 2011 blamed on "high fuel prices, fierce competition, weak demand and steep spikes in airport and navigation taxes." In recent weeks, the airlines image has also been damaged as two of its McDonnell Douglas MD83s suffered engine shut downs inflight.

However, despite the bleak outlook, 1Time has managed to retain some prestige as the most punctual airline in South Africa for June and July. CEO Blacky Komani, too, has remained resolute stating:
"It is business as usual and passengers have nothing to fear."

This storm of events and their resultant dire consequences for 1Time are in stark contrast to that of Government run SAExpress (SAX), whose inability to produce audited financial results for their 2010/2011 Financial Year and a subsequent USD120million accounting hole, simply resulted in the dismissal of the board with no apparent legal action brought against anyone. Ah, such is life in the world of parastatals.

We here at The Tribune wish 1Time all the best, as this year so far has proven to be lethal for the South African aviation scene in general: LCC VelvetSky bit the dust in February after only 12 months in the air, whilst traditionally strong Comair Holdings (Kulula and BA Comair's parent company) also took heavy losses, and with global fuel prices set to remain above USD100 per barrel it seems we could be in for an even more interesting Q3 and Q4 for 2012.

Lets just hope that the path to financial solvency is conquered with spirit and innovation, not government handouts and mediocrity.

Monday, July 9, 2012

► MALAWI: Swift Air grounded by courts as Government mulls Air Malawi's future following huge losses.

SwiftairPrivately owned Malawian airline Swift Air has been grounded by the Malawian courts and had its property in Lilongwe attached over outstanding rental fees and monies owed to Air Malawi, the Airport Development Limited (ADL), and various independent travel agents.

Reports claim that employees at the family run company had not reported for work since May and that the airline's headquarters in Lilongwe had subsequently remained shut. Despite all this it is alleged, the airline still remained operative, albeit by proxy i.e using other carriers to ferry passengers under their trade name.
"An employee who held a senior position at the company but spoke on strict condition of anonymity told Zodiak that the CEO left two months ago amid pressure from the debtors.
“When all our planes were suspended two months ago due to financial challenges, the owner decided to continue selling tickets and in turn use Air Malawi to fly the customers,” said the employee adding; “The debt with Air Malawi rose to millions and she decided again to use independent travel agents to book our customers on air Malawi flights but she has failed to pay them too.”"

Prior to its grounding Swift Air operated domestically between Lilongwe, Blantyre, Mzuzu, Karonga with a single regional flight operated to Johannesburg, South Africa whilst their fleet consisted of a South African leased McDonnell Douglas DC-9 (ZS-GAU?), an Embraer 120 (9J-RYL) and a Beechcraft 1900D. All of have either been returned to their respective owners or grounded as a result of the financial crisis at Swift Air.

Swift Air DC9 at Lilongwe
Swift Air Malawi's lone DC9 at Lilongwe (SwiftAir)

Founded in January 2011, the airline was seen as a viable alternative to the unreliable parastatal Air Malawi, whose own future has been called into doubt over heavy continuous annual losses, which for the year 2011, amounted to MWK1.1billion.  The losses have been attributed to Air Malawi's continued use of leased aircraft for operations; a reliable if very expensive way to operate.

In addition, new president Joyce Banda's financial reforms have seen the Malawian currency, the Kwacha, lose 33% of its value overall after a devaluation was effected in order to help resuscitate the then ailing Malawian economy. The loss in value of the currency means the airline has had to deal with declining hard currency revenues locally to meet its foreign debts.

"With devaluation, our traffic has gone down as less and less people are able to travel," said Air Malawi's Director of Marketing Tony Chimpukuso Wednesday.
"And we are still waiting for the new government to state their position on Air Malawi. The previous government was not interested in us. They just wanted us to close down," h e said.
Chimpukuso said lack of equipment, costs incurred to put passengers on other airlines during breakdowns and last year's 10 percent devaluation of the kwacha contributed significantly to the losses at the airline.
The Malawi Institution of Engineers (MIE) recently called on government to make a concrete stand on Air Malawi if the country's air transport sector is to be revamped.

However all is not lost for the Malawian national carrier as it seems their cargo department at London Heathrow is slowly but surely regaining its market share after years of neglect. New capable staff have been hired in attempt to woe back lost business.
"Air Malawi which in the recent years had been dogged with a surmount of difficulty in its operations seems to be crawling back to serious business with a full force as it has just revamped its cargo services department at its offices at Heathrow Airport, London in the United Kingdom (UK) with a an improved service delivery."

So, whilst a market for sending home goods from abroad does most certainly exist, all that needs to be done is to organize an efficient and well run organization to do it.

Easier said than done in Africa sadly...