Camair-Co is succumbing to the same financial malaise that grounded predecessor Cameroon Airlines. Chief executive, Jean Paul Nana Sandjo, tells Martin Rivers how the flag-carrier is fighting back.
Camair-Co launched operations in 2011 as a successor to Cameroon Airlines, the central African country’s historic flag-carrier, which was dogged by financial losses and safety shortcomings during its 37-year history.
Following a pattern that has been repeated by governments across the continent, Cameroon liquidated its old flag-carrier in 2008 before starting again with a clean slate and a new brand.
President Paul Biya, who has been in office since 1982, resurrected the parastatal with start-up capital of 100 million CFA francs ($170,000).
Whereas Air France had helped launch the first flag-carrier, Germany’s Lufthansa stepped in to provide technical and consultancy assistance to Camair-Co.
To date, however, there is little to suggest that the new company is facing any less turbulence than its forbearer.
“The financial situation is not really very good. We have 30 billion CFA ($52 million) debt and our operations generate a loss of 1.5 billion CFA every month,” said chief executive Jean Paul Nana Sandjo. “The company is, therefore, in a real difficult situation. We are struggling. We are working very hard to get Camair-Co out of this situation.
“Fortunately, we are a 100% government-owned company, so the government is supporting Camair-Co as much as it can.”
Sandjo, who became the airline’s fourth chief executive in June 2014, will depend on that state support as he promotes a risky turnaround strategy hinged on densifying the fleet and network.
Though the government is withholding its approval until Boeing completes an independent assessment, the chief executive has no doubts about what he perceives to be the flag-carrier’s Achilles heel.
“The structure of the airline at the beginning was not correct,” he insisted. “You cannot be present in domestic destinations, regional destinations and international destinations with only three aircraft. That is the main problem.”
Sandjo was speaking shortly before Camair-Co inaugurated a pair of Xian MA60 turboprops – a controversial 50-seat type with a patchy safety record that lacks certification to fly in the USA, the EU and New Zealand.
Matthijs Boertien, the flag-carrier’s former chief executive, and Pierre Tankam, the former director general of Cameroon’s Civil Aviation Authority (CAA), both objected to inducting the MA60s, prompting local media to dub them “flying coffins”.
With the two Chinese-built aircraft now in service, Camair-Co deploys a five-strong fleet that also includes two Boeing 737-700s, leased from Aviation Capital Group, and one owned 767-300ER.
But the metal is spread thinly across an ambitious route network comprising six domestic and 11 regional destinations, plus one intercontinental route to Paris (served from main hub Douala via a stop in the Cameroonian capital, Yaoundé).
“When an aircraft has even a little problem we have to cancel flights, and the passengers don’t like that,” Sandjo said, acknowledging that a spate of technical issues grounded the 767 multiple times last year.
In one embarrassing incident in September, affected customers stormed Camair-Co’s office in Yaoundé to vent their frustration.
The flag-carrier has other handicaps, too. Although its wide-body is configured in a dual-class layout with 30 business seats and 180 economy seats, Sandjo admitted that “the comfort … is not good because we have no on-flight entertainment system and the seats are old models”.
That places it at a competitive disadvantage to Air France, Brussels Airlines and Ethiopian Airlines – all of which offer world-class products on their wide-body services to Douala and Yaoundé.
High maintenance costs are another concern: Camair-Co ferries its aircraft 1,750 nautical miles east to Addis Ababa for line maintenance.
Aware that the government’s patience is wearing thin, Sandjo has developed a bold turnaround strategy to lift the flag-carrier from its financial quagmire. His proposal involves taking delivery of six aircraft this year – one 777, one 737-800, one 767 freighter, one 737 freighter and two Bombardier Dash 8 Q400s – as well as retrofitting the 767 with an improved interior and new on-board technology.
Camair-Co’s earlier letter-of-intent (LoI) for two 787 Dreamliners remains on the books, but is not considered a near-term priority.
“The company is dying. We need immediate solutions,” the chief executive emphasised. “We want aircraft [that are] available now. Moving into new aircraft [types] will delay the entry to service, because to order a Dreamliner today, the delivery will be by 2020.”
Bringing maintenance work in-house is another priority. An updated agreement with Ethiopian Airlines will see knowledge and capabilities transferred to Camair-Co over the next year, Sandjo revealed, explaining: “Maintenance must be 100% in-house. We need to have these facilities to repair wheels and brakes. We need all these because it’s an investment. At the end of the day it saves money, and the operation will be easy and flexible.”
Boeing’s consultancy division has reviewed the proposals and submitted its own recommendations to the government – reportedly calling for a high figure of nine new aircraft.
“Our team is already on the ground and we’ll do our very best to help make Camair-Co take-off,” Michael Bangue-Tandet, regional sales director for the US manufacturer, was quoted as saying by Dow Jones Newswires in December.
As well as aiming to make the airline cash-flow positive by 2019 – the year that its 787s were provisionally scheduled to arrive – Boeing will scrutinise the network strategy laid out by Sandjo.
The chief executive confirmed that he wants to launch flights to Dubai and Brussels this year, followed by long-planned services to Guangzhou, China in 2017.
He also hopes to sign European codeshare agreements, leveraging Camair-Co’s International Air Transport Association operational safety audit (IOSA) certification as a selling point. “The goal is to be able to bring passengers from this area [central Africa] to the most cities possible by codeshare from Paris,” he affirmed, singling out Geneva and the UK as target markets for onward connectivity.
Camair-Co’s new MA60s have already facilitated domestic expansion to the western city of Bafoussam. Route launches to Bamenda, Bertoua and Koutaba are now being mooted by Transport Minister Edgar Alain Mebe Ngo’o.
Scheduling data from Flightglobal Innovata, meanwhile, shows that the flag-carrier has added three regional points to its network this year: Dakar in Senegal; Pointe-Noire in Congo Brazzaville; and Malabo in Equatorial Guinea. The latter destination is operated with MA60s, while the former two are served with 737s – heaping yet more pressure on the over-stretched Boeing fleet.
Although Sandjo has visions of making Douala the main hub for central Africa, he accepts that neighbouring countries have their own rival plans. “We will see who will succeed,” he smiled.
A more urgent priority is levelling the playing field with international competitors. In the Cameroon-France country pair, for example, Air France supplies nearly twice as many seats as Camair-Co, despite having equal rights under the bilateral agreement. “It is definitely unfair,” Sandjo complained. “Camair is not able to even do the full flight [allocation] in a very acceptable condition. As soon as we have our fleet this will change. »
Extra narrow-bodies would also allow Cameroon’s flag-carrier to defend market share against Turkish Airlines, Royal Air Maroc, Kenya Airways and RwandAir – all of which fly 737s to the country from their respective hubs.
The government’s commitment to Camair-Co was reaffirmed last summer, when it underwrote a 25 billion CFA ($43m) loan from a consortium of banks (Ecobank, Commercial Bank of Cameroon, United Bank for Africa and Afriland First Bank). At the time, the financing deal was linked to the purchase of new aircraft for the flag-carrier.
Subsequent media reports cast doubt on the spending plan, however, claiming that President Biya had suspended the loan while state auditors complete an investigation into the airline.
The outlook became hazier still, when several local newspapers wrongly reported that Sandjo was about to be dismissed.
Whatever the future holds for the chief executive and his ambitious growth plan, Camair-Co has, to date, been a disappointing successor to Cameroon Airlines. The hope is that international experts can help the flag-carrier on to a more stable footing – boosting its competitiveness and clocking up a few orders for Boeing in the process. (Aerospace, photo: Camairco