Sudan Airways between the reform & mismanagment

Transcription of the interview with
Dr. Elfatih Mohammed Ali
-Managing Director of Sudan Airways-

Q: I would like to start asking you for an overview of Sudan Airways, its role in the new economy, and what the key factors have been its rapid development since the mid -nineties?

A: I think Sudan Airways is one of the oldest airlines in Africa, it has been established 50 years ago, at that time the caution industry was quite different from what it is now. The employment in the industry and the market was different too. At that time Sudan Airways was a major link between Africa, Europe, and the Middle East. In the 7o's the Sudan Airways fleet was composed of Boeing 707s & 737s. We faced a few problems in the late 80's early 90's and the industry has changed so much that we are not really competing as much as we used to be. The major milestone in 1992-1993, was when Sudan Airways was able to add Airbuses to its fleet, and consequently our service rose to a reasonable standard. At that time we had very old aircraft which were not working well and not up to the standard of the market. By aquiring the other aircraft we were able to add value to our service . As you know, no airline can work in an uncertain environment, as this business needs stability, and people want to know if it is safe to travel. Now we are working on another major issue: we are working with the government on the privatization process of the airline. We feel this will be a major activity which could help to improve the profile of the economy of the country.

Q: Before we emphasize the privatization process, what is your diagnosis of the current situation of Sudan Airways?

A: Sudan Airways has two major activities, domestic and international. In the domestic Sudan Airways is an important player, because as you know Sudan is a very big country, and the infrastructure of the roads is not developed, in addition to the bad weather conditions such as the raining season and floods. So aviation is needed to keep the country together. To help people in both normal and crisis conditions( that is to help them in health problems, food shortages, security…) you need airlines. There has to be a reasonable solid domestic aviation business.

Q: Does it have a social role?

A: There is a social obligation, but what we are trying to do now is to make it economically feasible. We are working with the government on a commercial basis, the government is not subsidizing us, and it is not giving us any support, so we have to cover our own costs. There is a sort of internal subsidiary, for the domestic business, and we are trying to make it economically feasible. So what we are doing now is increasing our traffic domestically, and increasing our frequencies and services to the different parts of the country. So we go to the upper North (Halfa), and the South (Juba), West (Geneina) and East (Port Sudan). We have stopped services from Medani, Atbara and nearby cities. We do not feel that it is justifiable, especially when the population in these places is not so big. Wherever there are good highways and roads and the distance is less than 500 km, I think there is no need for flights to these places. If the railway lines improved it would be a help, but now trains are not a threat or competitor to us.

Q: How do you position Sudan Airlines in the international arena ?

A: As for the international side, as time goes by there is a major change in the pattern itself of the international flights. In the beginning, Sudan Airway's most international flights were to the UK & Egypt, in the 60' s and 70's we had almost daily flights to London, but now it is different. Now our biggest market is in the Middle East, to Saudi and the Gulf countries and some traffic to Egypt. We are also reconsidering the European markets..

Q: You are the main link between Sudan and the Middle East, how do you plan to strengthen this position?

A: Well we are not the main link to the Middle East. In the Middle East we have other competing airlines, Saudia Arabian airlines fly here and we compete together in the same market and the same also applies to Gulf Air, Qatar Airways and Egypt Air, with whom we have bilateral agreements. From Europe we have Lufthansa. Sudan's population is rather small. Therefore the market is not big. So, most of the European airlines were not able to continue in Sudan, although Lufthansa is doing very well, and it is increasing its frequencies and capacities. The other area that we are tryng to improve is with other African regions. As you know Sudan has 9 neighboring countries. And most of these countries have ethnic boundaries, so the relationships between the tribes and ethnic groups is tight and overlaps. Many of these countries are land locked, such as Central African Republic, Zaire, Uganda, Congo, and even Ethiopia. What we are trying to do now is to strengthen our flight links to those areas, and now we have flights to Libya, Chad, and Central African Republic and maybe in the near future we can go to Zaire and also Kenya. There is traffic now and we are also using Khartoum Airport as a hub for these people to go anywhere they want.

Q-Taking into account that Sudan is a member of COMESA and links Africa with the Middle East. Could we go as far as to say that Sudan Airways is the main vehicle linking one and the other another?

A: We are doing this for Haj (the pilgrimage to Mecca) between Nigeria and Saudia. A century ago people used to travel either by walking or on caravans from Nigeria, West Africa through Sudan to Saudia Arabia. This journey used to take years. Now this is done by flights, which only takes hours. So it reduced from a few years to a few hours. In the last few months transit business increased to 25% and we are expecting more. I think time has come for Sudan Airways to privatize its business. Nobody comes to Sudan to invest in our companies but the potentials are there.

Q: What do you think is needed for Sudan as a whole, to really improve that aspect?

A: We need to improve two things, we have to improve our airport facilities, and to have a good airport. This has been under discussion with the board for two years now. There is a project now for a new airport. We also need good airlines and this means good investments. This is why we are seriously looking into privatization.

Q: What is your input in this process of investment, I understand there have been letters of intent signed?

A: The process started with the consultants on the board, they are looking through the details, such as financial analysis of the project. Our consultancy is shared between Anderson and a company called Barren's Financial Services. These are doing the financial analysis. We are in the final stage now and we are trying to finalize the financial and business plans and discuss the details with the potential investors. There has been some appreciation of what is happening from a large number of people. Their main point is that Sudan has a geographical advantage. We sometimes have flights from Central Africa to Paris. We also have flights from Eritrea and Europe, and Comoro Islands to Paris in addition to the Middle East. There is another problem facing Africa that is, sometimes people have to have a connection from Europe in order to go to certain places in Africa. An age ago there was a route through the Equator offered by Ethiopian Airlines-our route goes through the Tropic of Cancer- Ethiopian airlines were doing this for a while and it was successful, and it was the only airline. Now Kenyan Airlines is beginning to take this route. Still there are difficulties, and this is the major point of discussion and that is a concern to Europeans who come to African countries. In Africa there is a good airport in Nairobi, but there are no more.

Q: In terms of investment, how do you see the UK playing a role in your airline or airport?

A: Our spare parts are from British companies, as well as technical assistance. Historically civil aviation in Sudan was part of the British civil aviation and most of the licenses and permits were from the CAA in the UK. In the last 25 years things have changed, but we still give priority to British industry and business.

Q: Where are Sudanese pilots trained, and where is your training center?

A: Most of our people are trained in the UK and all our pilots were trained there. But now it is open, now we have people trained in France (training with Airbus) . In fact our training center has a co-operation project with some organizations in the UK, where our people are trained by them. Later on, we intend to make it a regional training center, for other countries, with the help of the British.

Q: Obviously there are many opportunities for foreign investment; agriculture, animal resources, energy. How do think British investment is going to react to such potential ?

A: I think the UK acknowledges Sudan from a more objective point of view, compared to other countries. In the agricultural sector there has always been strong relations between the Sudan and UK. Now the main business is oil, and British investors are starting to become aware of it. As from our side as I told you from the beginning, our imports from the UK were almost all composed of industrial, mechanical and engineering equipment. The UK used to be the major supplier of Sudan Airways, Sudan Railway, Sudan Seaport Corporation and Sudan Gezira Board. Most of the engineering products used to come from the UK and they still have a lot of stock here. It used to be the same with the power center in Sudan. So my feeling is to provide that it should not be very difficult to persuade investors. But they need to be competitive especially with their financing. Because now with globalization people go everywhere-people go to South East Asia, USA and other countries in Europe. You have to be competitive.

Q: Before you mentioned that Sudan has an image problem. Misconceptions are usually related to lack of information. Can you tell us what your vision is of the Sudan today?

A: Sudan is such a safe country. The level of safety that you find here, especially in the capital and other places, you will not find anywhere in Africa. And people do not know this. People come here to Khartoum, with the impression that there is fighting in the streets and that it is an unsafe place and that they might not find something to eat and things like that. The only way that people are convinced is when they come and see it. This is the only big problem, as some people prefer to have their transit in other neighboring countries besides Khartoum. In other places they tell you not to come there after sunset, as you cannot leave the airport of the city. So this is the 1st problem. I think this is an issue with security and safety and peace that is happening here that people do not realize at all. It is true that there is war in the Southern part of Sudan, which is limited to areas known to everyone. But most of the country is such a safe place if we compare it to Saudi Arabia and other African Countries. The second is the economic potential of this country. People sometimes either forget, or don't realize what can happen if there isn't proper investment. This country has got an amount of arable land that is almost incredible. People are now utilizing less than 5-10% of what we have. So the water resource is very rich, it's not like -say- even Egypt, which has only the Nile. We have other water resources, apart from what we have from the Nile. So the potential is there. The last thing is that, generally, the people are friendly. Even the government is not a dominating one like what you hear in other parts of the world. You go anywhere, you feel that there is a source of power in the country , but in the Sudan you have the Government to tell you the truth. But the image is that this is a highly centralized strong Government, with a heavy hand over everyone. Sometimes when you read the newspapers and the magazines and watch television, when people talk about Sudan, you think they are talking about somewhere else .

Q: How is Sudan Airways contributing to the image campaign of sudan?

A.The first thing is we have to open up to other countries other people to know that this is a country where you can travel easily…. Q: What are you doing to improve visa requirements? A:This is one of our problems- we talked to the people in the government about it. It is true that at some point they did not longer grant visas for Arab countries due to the problems arising from that. Some Arab governments thought that since Sudan is open, they could send in their hard core criminals and set them free here An image campaign requires all forces working together and then persistance and patience.

Q:Can we say that privatisation is the answer for Sudan Airways?

A: I Think that if we get a reasonable investment this airline could be a successful airline with a very good network, with Khartoum as the heart for traffic from different parts of Africa especially Western, Central and Eastern Africa going to different places, the Middle East, Europe and the western Asian Region, the Gulf area and maybe India as well as from other places west and central Africa. We feel that could be a very strong possibility, though also in the domestic domain we need more strength in traffic and we will be using better frequency as a tool to achieve our objectives.

Q: Before concluding, what is your message of confidence to British Investors who are hesitating to come to Sudan ?

A: My message to them is that there is big potential and oportunities for the British to invest in this country. Sudan is today a safe place to invest in, and we are willing to strengthen our links with the UK. I am confident that British Investment is going to have a major share in the privatization process and a very important role in our economy. These are my feelings. Thanks very much.

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