Magazine article African Business

Air Afrique about Face

Magazine article African Business

Air Afrique about Face

Article excerpt

Air France, which holds a 12.17% stake in Air Afrique, has decided to step up its presence in the pan-African airline, not by increasing its equity in the carrier, but by playing a greater role in its day-to-day management. Air Afrique is jointly owned by 11 African states, the US freight handler DHL and the West African Development Bank (BOAD), as well as a bevy of smaller shareholders.

Also envisioned in the management contract which is at present being hammered out, is the restructuring of Air Afrique's network which includes a number of routes considered to be serious money-losers for Air Afrique.

It is possible, says a source at Air France, that Air France might increase its equity stake in Air Afrique one day - perhaps when the carrier undergoes privatisation scheduled at the latest for the year 2002. But it considers it more important at the moment to find ways for the airline to step up its productivity.

The French decision to become involved again in Air Afrique comes after a call for help made to the French government by a ministerial-level meeting held at Bamako, Mali, last summer, attempting to come up with a solution to stop Air Afrique's growing deficit. Last year alone this totalled FrCFA6.8bn ($12m), bringing its long-term debt to more than FrCFA185bn ($325m). In mid-September, simultaneous with the completion of a report by a committee of inquiry into the airline's finances, representatives of the 11 governments were received by the French government, over a year after a formal request had been made for such a meeting. …

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