Reflections on Air Malawi collapse
We can possibly now believe that Air Malawi is on the hammer with a new entity on the cards. Being a government owned company, there are some issues to carefully reflect on. Lessons abound, and the more they come out, we can realise that it is not the business of government to run airlines, but rather provide an enabling environment for aviation. I know there might be contrary views because some State owned airlines have been successful. Other governments could afford it, but we cannot.
In our region, Uganda, Zambia and Tanzania did away with national airlines. Kenya Airways has a mix of owners, including the general public. Its shares trade on the Nairobi Stock Exchange. All these four countries have high air traffic, but are not very different from Malawi. Precision Airline in Tanzania, privately owned and currently trading on the Dar es Salaam Stock Exchange has continued to grow. Its strong partnerships with Kenya Airways have made it a vibrant sub-regional airline. In terms of the aviation market, Malawians are travelling a lot. Airlines flying into Malawi have been trying to increase their frequency. This is proof that a vibrant and efficiently run airline is viable business. Small charter companies are also thriving very well in this country.
However, the sense of running an airline under a management team anointed by Capital Hill cannot work. The situation simply got worse and we couldn’t sustain this big enterprise. There are many questions that we can ask. Was it really worthy borrowing some millions of dollars from PTA Bank to purchase a very old 737 currently in some hanger? What business sense is there in running a national airline using chartered aircraft for long periods? And then, Air Malawi went out to lease one of its aircraft abroad. It could be they were not sure of how to use it once purchased. I don’t think their main line of business is leasing out aircraft. Air Botswana put focus on its ATRs to service a few select destinations. It has worked well and they are now expanding to Malawi, Zimbabwe, Zambia and Kenya. I don’t think Air Malawi has had any strategy to grow other than being a national airline.
Air Malawi accumulated huge debts while reporting strange mathematical profits, courtesy of accounting intelligence. On the contrary, the balance sheet actually showed astronomical rise in debt. It is still evident in the inability to get back equipment from maintenance beyond the borders. In some cases, its management used nationalistic arguments to justify its continued bail outs. Air Malawi was possibly the only airline in the world where its CEO left the office to fly a plane due to shortage of pilots instead of doing business strategy tasks. For some months, there was simply no plane. It ceases to be an airline in such a way. We can learn some lessons that if you can’t fly, then simply get out of the business. At last, it appears that sanity is prevailing. We can realise that nationalism cannot be a solution to cling to loss making government airlines. If we can’t manage to solve a fuel crisis for years for bikes and sedans, I doubt aviation is a business to cling to.
Airlines have to operate in a manner that is very efficient and develop the right partnerships. With its three aircrafts, Air Malawi has a staff of over 300 whose majority is in supporting roles. It has a shortage of pilots. Most of its pilots are now scattered all over the world. The efficiency side of business has been ignored and for many years, Air Malawi has just been another public utility, offering a public good and finally plunged in a deep abyss.
An airline that refused to accept credit cards and yet expected customers from all over the world to get into this country using its equipment. An airline without a functional website, erratic schedules that are obtainable through a telephone call can’t just compete and remain viable. We can add to bad customer relations often characterised by arrogant attitude of its frontline personnel. Sometimes the behaviour left a lot to be desired and a turn-off to potential customers.
As the process of kick-starting the airline under a new company, I believe new owners will be left to operate with a very efficient business model. Malawians travel a lot and they go beyond Nairobi and Johannesburg. Naturally they will opt for carriers that have strong partnerships and make connections beyond these destinations hassle free. You cannot simply break the powerful triangle of “Star Alliance, Sky Team and One World†that controls global aviation.
New owners should consider partnering with such alliances or similar ones. Otherwise, the airline business is competitive, modern, evolving and has no room for the business as usual approach, a hall mark of Air Malawi for many years. Either you are in this business or you are out. Taxpayers money can be used to refurbish airports or related infrastructure.
