With support from an international investor, Djibouti's re-launched national airline hopes to capitalise on expanding infrastructure to further strengthen the country's international transport connections.
Djibouti's flagship carrier, Air Djibouti, is back up and running following a bankruptcy that halted operations more than a decade ago. The company restarted commercial flights in early August, with freight connections to Mogadishu and Hargeisa.
According to Dawit Michael Gebre-Ab, senior director of strategic planning at Air Djibouti, the carrier plans to expand its network of regional cargo flights by the end of the year to include Uganda, Nigeria, Sudan and Ghana.
The company currently operates just one airplane - a Fokker F27, leased from Kenya's Astral Aviation - which has a payload of around 6.5 tonnes, but the flight schedule is an ambitious one, with Air Djibouti announcing in September that it aims to transport 1000 tonnes of freight by the end of 2015. The initial focus will be on high-value goods, such as electronics, laptop computers, spare parts for the oil industry and temperature-sensitive pharmaceutical goods, Gebre-Ab told media last month.
The carrier also has plans to expand into passenger operations in the near future. According to industry press, Air Djibouti plans to take delivery of an additional four or five aircraft in November, including Boeing 767 and 737 models, with plans to launch passenger services early next year.
High-profile investor interestThe revamped Air Djibouti is a 70:30 joint venture between the Djibouti Ports and Free Zones Authority (DPFZA) and Wales-based service provider Cardiff Aviation. The partnership has attracted significant press coverage, and not just because of the impact the new Air Djibouti will have on the small country's transport sector: Cardiff Aviation is chaired by Bruce Dickinson, lead singer of the British heavy metal band Iron Maiden.
After obtaining a pilot's licence in the 1990s, Dickinson flew his band's plane during world tours and has since worked for British World Airlines and the charter airline Astraeus.
Under the terms of a memorandum of understanding signed by Dickinson and DPFZA chairman Abubakar Omar Hadi in May, Cardiff Aviation will manage Air Djibouti's European-level air operator's certificate -- the approval granted by aviation authorities that allows carriers to operate commercially -- as well as help the airline acquire aircraft and offer operational management support. The company will also provide maintenance, repair and overhaul support services from its base in Wales.
According to Dickinson, "Djibouti is uniquely placed to provide a hub for investment from Europe, the Middle East and Asia into Africa," describing the country as "one of the most exciting aviation markets in the world," to media earlier this year.
Broader push for infrastructure investmentThe launch of the new flag carrier, following the 2002 bankruptcy, comes as part of a broader effort by Djibouti to expand its share of regional passenger and freight traffic.
The country already serves as the primary gateway for Ethiopia, accounting for around 90% of its neighbour's trade volumes, but investments in multimodal connections, along with deepwater ports and railways, are seen as crucial to increasing activity. Roughly 60% of global maritime trade passes through nearby shipping lanes, according to Hadi, and landlocked East African countries promise a consumer market of some 400m people.
With regional demand for trade increasing on the back of high GDP growth rates - with an average annual growth of 5% in Djibouti and nearly 10% in Ethiopia over the last five years - as well as increased trade volumes between Asian and African markets, ongoing investment in transport infrastructure should allow the country to improve efficiency and solve current capacity issues.
Speaking in August, Hadi noted that a sea-air link in Djibouti could reduce freight transport time from Shanghai to Abuja from 75 to 20 days.
Planning aheadThe launch of passenger services by Air Djibouti would also support government efforts to develop the country's nascent tourism sector, which was highlighted as an area with significant growth potential in a 2013 study by the World Bank.
The report concluded that the number of tourists - 50,000 per year at the time - could rise ten-fold by 2030, provided that barriers to growth, such as inaccessibility by air, were addressed.
Tourism could receive a further boost from Air Djibouti's passenger services, with the carrier planning to launch flights by the end of the first quarter of 2016, initially serving London and Paris and eventually offering routes to India, Guanghou, China, and Miami via Lagos, Dickinson told industry press in mid-October. The company plans to service the London and Paris routes with two Boeing 737s, before introducing the 767-200ER mid-year.
To keep ahead of the expansion in airline capacity and potential for higher tourist volumes, investment in airport infrastructure is ramping up, with two airports currently under construction for a combined $600m, funded by the China Civil Engineering Construction Cooperation, a subsidiary of the state-owned CRCC.
The first airport, located 25 km south of Djibouti City, will have an annual capacity of 1.5m passengers when it opens in 2018 and will be able to transport 100,000 tonnes of cargo per annum. The second facility, located in the north of the country, is scheduled to open next year, with a 350,000-passenger capacity that will scale up to 767,000 by 2021.
Together, the new airports are expected to increase the country's capacity eight-fold. The country's current airport, Djibouti-Ambouli International, located near the capital, handles roughly 250,000 passengers per year, according to media reports.
© Oxford Business Group 2015
