Air Senegal International revenues exceed expectations.

Air Senegal International(ASI) won the prestigious African Airline of the Year Award in 2003. The airline has continued to expand its routes, and entered into code share agreements with South African Airlines to serve New York and Johannesburg. Stephen Williams interviewed Zouheir El Aoufir, the director general of ASI, at the airline's headquarters in Dakar.

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AFRICAN BUSINESS: When you last spoke to African Business (see November 2002 issue) you outlined Air Senegal International's ambitious business plan. Have you met all your projected targets?

ZOUHEIR EL AOUFIR: In terms of traffic targets, we had 125,000 passengers in 2001, and we were forecasting 350,000 in 2003. Actually, we carried more than 355,000 last year. So in terms of traffic that's OK. In terms of revenue we exceeded our forecast. We had anticipated revenues of about $80m in 2003, but we achieved just short of $100m. As for our fleet size, in 2001 we had just two aircraft although we leased a third for a short period. We returned that aircraft and leased two new generation Boeing 737s so today we operate four aircraft, three Boeings and one Bombardier Dash 8, but by leasing these new 737s we were able to serve new destinations. We increased our African regional services, and started a daily service to Paris which we have now increased to two daily flights. What ASI has proved is that in such a tough business environment, and in such a difficult industry as aviation, an airline that was formed through south-south co-operation--between Royal Air Maroc (RAM), which owns 51% of the company and the government of Senegal which owns the remaining 49%--can create a successful product. We can do it using our own experience, using the know-how we have here in Africa and using the good relations we have with the airlines of the North.

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AFRICAN BUSINESS: The face of any airline is represented by its ground staff and cabin crew. Anyone who flies ASI will notice that your people are very professional. Do you train your staff within the company?

ZOUHEIR EL AOUFIR: Well, this is one of our major competitive advantages, and from the outset we have considered the quality of our personnel to be of primary importance. We are trying to avoid all the errors made by other airlines. All applicants are sent to our parent company, RAM, to their staff training facility in Casablanca to complete a 14 week basic training course. Trainees complete their training with 60 hours flying on our own fleet. If staff cannot meet the very high standards we set then we take them off the aircraft, or even move them out of the company.

AFRICAN BUSINESS: Is the increase in passenger traffic and revenues due to your new European routes?

ZOUHEIR EL AOUFIR: Not exclusively because we have also increased our regional African routes. Just one third of our network is long haul, like Paris which is just under six hours from Dakar. But the rest of our network is short and medium haul and we have good destinations in Africa and the freedom to carry passengers on sectors outside Senegal, and it is this flexibility that contributes to our excellent productivity ratio in terms of crew and aircraft.

AFRICAN BUSINESS: Does freight play a significant part in your operations?

ZOUHEIR EL AOUFIR: No, not really, it's less than 5% of our revenues. We are just a young company, just over three years old. The first step in building the company is to develop our passenger base. Of course we use our hold to carry freight when required, but we are not focussing on developing our freight operations. That might come in say five years after we have fully developed our core passenger operations.

AFRICAN BUSINESS: You've been operating code-share flights with South African Airlines since January 2003. What's the basis of this agreement, for example do you provide crews for these flights?

ZOUHEIR EL AOUFIR: We began with a twice weekly Johannesburg--Dakar--New York service, but since last October we have been operating a daily service. Our agreement is simply that SAA operates the flights and we sell seats on the aircraft. We've made a good partnership with SAA. It's been very interesting working with them, and we've gained knowledge of the market and of operating wide-bodied aircraft.

AFRICAN BUSINESS: Do you think that SAA may make Dakar its West Africa hub?

ZOUHEIR EL AOUFIR: It's a bit premature to say that. SAA is a big company and ideas are always flowing within the company. I can say that I hope that SAA will choose Dakar as their West African regional hub, but I know that they are also thinking about Lagos and Abidjan. But Dakar must be a strong contender. Dakar and Senegal do not have just one big, overriding advantage, but has a multitude of attractive aspects.

AFRICAN BUSINESS: Do your European services have a lot of competition from charter flights?

ZOUHEIR EL AOUFIR: Yes, that's right, but it is two different markets. Charter flights carry tourist passengers, so it's seasonal. Some of them continue throughout the year with one or two flights a week increasing to a daily frequency during periods of high demand. It's not really competition for us because they are supposed to only carry tourists on package holidays, while ASI's market research indicates that, on our French routes, just over two thirds of our passengers are travelling on business.

I should point out that charter flight companies, in themselves, tend to add very little value to the economy. Yes, they bring in tourists and that is very important. But in the case of ASI, we employ around 500 people here in Senegal, and yet I know of one charter flight company, which serves the Dakar-Paris route, that has just three employees in Senegal, and they pay less in tax! And we do know that some charter operators have been deviating from their agreements and carrying flight-only passengers. We are working with the authorities to try to stop this.

We do face very tough competition. First we have a problem with those charter operators who do not respect the rules, and then we have the competition from the big European airlines that serve Dakar. As well as Air France, when you consider all the European airlines like TAP, Iberia, Alitalia etc, who can channel passengers from all over Europe through their own hubs at discount prices, just to fill their flights, to fly them into Dakar--that's very tough competition.

AFRICAN BUSINESS: What is your view on the increasing liberalisation of the aviation industry?

ZOUHEIR EL AOUFIR: This is very important. Liberalisation is being heavily promoted and, OK, the market economy is fine. However, if you take these big European carriers, for many years, for 50, 60 years or more they have developed into extremely powerful companies in a protected environment. In the past, as they were developing, nobody could touch their skies, their routes, their networks, and many of them received huge subsidies from their governments. Now they come to Africa to talk with us and they say to us: "It's OK. You do what you want and let us do what we want. You operate a flight a day to our home airport and let us operate a flight a day to yours". But I have to say 'Wait a minute, we are just a small company, we cannot live with this'. It's not that we are looking for a free ride or being gifted anything. We want to develop our own airline. Once our own national airline is developed, then we can think about opening our skies.

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We're not against open-skies. Indeed we have made very good progress here in Africa. If you exclude the Maghreb and South Africa, whose airlines are able to compete with the big global carriers, all African carriers are roughly the same size and an open-skies policy works very well, and our future development can be sustainable.

AFRICAN BUSINESS: ASI is being described as a revolution in African aviation. Do you agree?

ZOUHEIR EL AOUFIR: I would describe it as more of a renaissance than a revolution. I really believe that ASI is the start of a new model for African aviation. The old model was Air Afrique, but there you had an attempt to integrate Africa's aviation sector with one huge company with different constraints in different countries. The problem with Air Afrique was that if there was a problem in one component country the whole airline could be grounded. The new model is to have different companies in different countries, not big companies but companies focussing on co-operating to develop efficient regional networks.

AFRICAN BUSINESS: What sort of partnerships and alliances do you have with other African airlines?

ZOUHEIR EL AOUFIR: We have excellent relations with our major shareholder RAM, and we are developing our connections with Casablanca to seek other possibilities. We already have a very good partnership with South African Airways, and we are looking to them, as a major actor in African aviation, for further development. We're doing the same with East Africa--we've been working with Kenya Airways with a code-sharing agreement on their Abidjan flights--and we're also developing a partnership with Ethiopian Airways. We may be small, but we can offer our customers a very wide network.

And we and our partner airlines are all members of the African Airlines Association (AFRAA), so we always have the opportunity to talk together. That is the trend within African aviation, closer co-operation, especially to ensure that competition within the industry is fair.