Air Senegal builds on success: with more passengers, more revenues and more routes, Air Senegal International is continuing to grow at a rapid rate. Stephen Williams talked to the company's CEO Farid Senhaji about recent developments.

African Business: You became Air Senegal International's (ASI) CEO last year. What was your previous position?

Farid Senhaji: I became the directeur-general, or chief executive officer, of Air Senegal International (ASI) on March 9 of 2004. Before that I had been working for Royal Air Maroc for 23 years, with various responsibilities within that company's engineering and maintenance divisions. I am an engineer by training. I gained my diploma from Sup'Aero in Toulouse, one of the most famous aeronautical engineering schools in France.

AB: How do you find current business conditions?

FS: You are probably aware that the airline was created as a partnership between the Senegalese state and Royal Air Maroc, in the framework of the privatisation process for the former national carrier, Air Senegal. This cooperation project formally took place on November 2, 2000 and the new airline began operations on February 23, 2001.

The airline started with two airplanes, a Boeing 737-200 and a Dash 8Q-300 and with a staff of around 100 people. But the airline has been growing exceptionally fast since its formation.

In the first year, ASI carried 125,000 passengers and had a turnover of $18m. The following year, ASI added two new-generation Boeing 737-700s to the fleet and inaugurated direct Dakar-Paris flights. In 2003, ASI won the African Airline of the Year award, and more than tripled its workforce.

I would describe business conditions continuing to be buoyant. In 2004, we expect to reach some 420,000 carried passengers, and to record a turnover of $120m. And the trend for the future is, according to our forecast, still very positive. We envisage more passengers, more revenues and more routes.

In July 2005, we are taking delivery of a new Boeing 737-700 aircraft that will allow us to open new routes--at least two flights a week to Accra, Ghana, in the sub-region, and two new flights a week to both Madrid, Spain, and Milan, Italy. We are also looking at the possibility of adding, by the end of 2005, Toulouse and Bordeaux to the French destinations we already serve.

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AB: Are you looking towards the business traveller to provide the demand for these new European routes?

FS: Yes, that is right, the business traveller is very important for us, and we are improving the layout of our business class, and our service to business passengers. But we have also identified potential passengers, those of Senegalese and other West African origins, that live near these European cities. They come home from time to time, especially during holiday periods. We have done our research, and we believe the demand is there.

AB: Senegal hosted the African Airlines Association (Afraa) annual general assembly in Dakar last December. How did Afraa start, and what is its purpose?

FS: Afraa traces its beginnings back to 1963 when a number of African airlines, taking the opportunity provided by attending the International Air Transport Association (IATA) annual general meeting, began holding meetings between themselves to discuss matters of interest to African airlines and the adoption of common positions.

Today, Afraa is an organisation open to air carriers owned by African states and/or to carriers owned by citizens of such states. Currently, Afraa has 42 member airlines representing 31 African states.

Afraa is working on a number of projects that will assist in the development of African airlines in general. For example, Afraa is seeking to establish a fund that will assist in the training of our airline's personnel.

AB: What were the main items on the 2004 assembly's agenda?

FS: There was a lot of discussion regarding the major concerns of the African airline community, particularly in regard to bilateral air services agreements with Europe.

There was a recent judgement from the European Court of Justice that the bilateral air services agreements that were in force did not comply with the European Community's own rules on liberalisation and free trade.

As a result, a number of different member states of the EC are renegotiating their own bilateral air services agreements, and they are tending to impose new rules that are raising real concerns amongst African airlines. We fear that some African airlines cannot survive under the new rules that the European aviation authorities are considering.

AB: What sort of rules worry you the most?

FS: Well, for example, there is concern over what is termed 'denied boarding, cancellations and delayed services regulations'. This is where a passenger arrives for check-in with a valid, confirmed reservation only to be denied travel for whatever reason--their flight is cancelled or there has been overbooking on his flight, etc. These new regulations impose new levels of financial compensation that must be paid to the passenger and they will be a heavy burden for most African airlines operating in Europe.

AB: How have you coped with the recent large fuel price rises?

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FS: We have not hedged against the oil price up to now, but last October we decided to apply a supplement to our ticket prices to cover at least some of the increased cost of fuel. This supplement will be removed as soon as this hopefully temporary increase in fuel costs is reversed and the oil price returns to somewhere near its previous level.

AB: Do you believe this fuel supplement is going to impact your passenger levels?

FS: No, we don't think so, because the need for travel is still there despite marginally higher ticket prices. But we are in the process of studying various financial instruments that would mean we could hedge our position with regard to both large fluctuations in the oil price and world currencies.

AB: What is your medium-term vision for ASI?

FS: My objective is to keep ASI improving and developing, getting more aircraft and routes and have Dakar become the most important air-hub in West Africa. We want to enhance and improve our African network with Dakar as the main gateway to the West Africa region.

We also have ambitions to begin services to the Middle East. And of course trans-Atlantic routes are a goal. In two or three years we hope that we can acquire a wide body aircraft to fly to New York, and possibly Brazil.

AB: You already have a trans-Atlantic service that you operate in cooperation with South African Airways. Has that been a success?

FS: Yes most definitely. We have a very good relationship with SAA, and we have been working together for more than two years to identify different ways we can cooperate to increase traffic flows between South Africa and Senegal, and on routes on both of our networks.

We have been selling tickets for about two-and-a-half years on SAA-operated flights from Dakar to New York's JFK airport, and Johannesburg, under what is termed a multilateral interline traffic agreement. And under this agreement, ASI accepts tickets issued by SAA on ASI routes.

We also have a special pro-rate arrangement where we come to an agreement on special fares on special flights. This encourages SAA to sell our seats to their customers. For example, a passenger travelling from Johannesburg to Dakar on SAA can take advantage of special fares on an onward connection to our regional destinations on specific flights.

Likewise, we can sell specially priced tickets from, for example, Lome through Dakar to Johannesburg, or for that matter on the SAA flight from Dakar to New York.

So we believe that our arrangements with SAA offer customers in South Africa and the West African region an important international service, one that we will be striving to broaden and improve in future years.

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South African Airways and Ethiopian Airlines have entered a new code-share partnership arrangement that will see closer cooperation between two of the biggest and longest serving carriers in the continent. For Ethiopian Airlines (EA), the agreement, which came into effect at the beginning of last November, will generate more traffic and contribute to a more significant presence in the southern African market.

For South African Airways, (SAA) the partnership creates an opportunity to maintain a presence in the Ethiopian market. Through this code-share agreement, Ethiopian Airlines' three weekly flights on the Addis Ababa/Johannesburg sector will enable passengers to purchase tickets using the SAA code to fly between the two countries. EA will be the operating carrier, and SAA will be the marketing carrier.

Apart from the development of traffic on the Addis Ababa and Johannesburg routes, the new partnership creates an opportunity for the two airlines to explore the possible expansion of each other's route networks beyond the southern and East African destinations they each serve. Further negotiations are underway that will enable customers to enjoy the benefits of both of the two airlines' frequent flyer programmes.

The partnership is very significant in that it will strengthen relations between South Africa and Ethiopia. It also demonstrates the two carriers support for the New Partnership for Africa's Development (Nepad) which argues that Africa must increasingly look to its own resources and prepare itself to participate in the globalisation process.

Both airlines will continue to work closely with their respective national tourism authorities, and forge closer ties with other key players in South Africa and Ethiopia to stimulate tourism and promote Africa's economic development.

EA and SAA are two of the continent's oldest airline companies, and this code-share agreement marks a significant landmark in inter-African airline cooperation.