Assessment positive on Malawian Airlines
The Public Private Partnership Commission (PPPC) says a recent review of operations of Malawian Airlines shows that it is making progress in getting well established as Malawi’s flag carrier.
PPPC chief executive officer, Jimmy Lipunga said although the airline has not yet started making profits, it is moving in the right direction in terms of consolidating its existing routes in order to optimise its traffic and revenue streams.
Lipunga said the priority now is for Malawian Airlines to sustain its performance for purposes of attaining profitability.
“Airline operations are complex due to their vulnerability to so many variables including volatility in lease costs, interest rates, prices of fuel, regulatory demands and security dictates,” said Lipunga.
Malawian Airlines has, however, complained about the country’s exorbitant jet fuel prices which, it says, are putting the company at a disadvantage compared to its competitors
Malawi Airlines Chief Executive Officer, Kassim Geresu, said Malawi’s jet fuel prices at about US$6 is the highest in the region and that in South Africa; the price for the same is only at US$3.
“Fuel costs are taking up much of our operating costs. We appeal to authorities to help in reducing the prices,” he said.
Meanwhile, Lipunga said earlier plans by the Malawi government to sell some shares in the airline to members of the public would depend on the airline attaining profitability.
“There should not too much anxiety about the prospects of transferring shares to the public since the government of Malawi is the custodian of the shares and therefore, the shares are not at risk,” he said.
Eerlier, Malawian Airlines board chairperson George Partridge said the disposal of some government shares in the airline would most likely be through a private placement since going through the Malawi Stock Exchange may not be feasible due strict listing restrictions.
The Malawi government currently owns a 51 percent stake in Malawian Airlines but undertook to offer 31 percent of this to the general public once the airline starts making profits, with initial plans putting this at nine months after the launch of the airline in 2014.
Ethiopian Airways holds the remaining 49 percent stake in Malawian Airlines.