Author Archives: bankelele

Ethiopian Airlines merges with Addis Hub Plan

Last month, Ethiopian Airlines announced that the Ethiopian government had decided to create a new Aviation Holding Group that would include the airline as a centre point.

.. (the)  new Aviation Holding Group with various diversified aviation strategic business units like: Ethiopian Airports Enterprises, Passenger Airline, Cargo Airline and Logistics Company, Ethiopian Aviation Academy, Ethiopian Inflight Catering Services, Ethiopian MRO Services, Ethiopian Hotel and Tourism Services etc.

It will promote customer services by a marriage of passenger inflight experiences with service on the ground at Addis Ababa, Ethiopia. The model seems to be along the lines of Dubai, and is one that Kenya Airways management has lamented about the need to also have at Nairobi –  and getting Kenya’s national airline aligned with other sectors of the airport and city for Nairobi to be a true aviation hub.

The ultimate aim is to upgrade the customer experience at the airport to meet global standard and thereby making ADD (Addis) airport the best connecting hub in Africa.

More from this Addis Fortune newspaper article:

  • The merger, which is said to be requested by the leadership at Ethiopian Airlines, gave the Group a mandate of providing airport services without discrimination including constructing, expanding, maintaining and managing airports, according to its establishment regulation.
  • Established with an authorised capital of 100 billion Br, the Group was formed after the approval of the regulation by the Council of Ministers. Before the merger, a committee chaired by Sufian Ahmed, an adviser to the Prime Minister and Tewolde, made a feasibility study to draft the regulation.
  • Founded in 1945, Ethiopian Airlines claims to be sub-Saharan Africa’s largest carrier with more than 95 international and 21 domestic destinations. In 2014/15, Ethiopian Airlines earned a net profit of 3.5 billion Br, which makes it among the highest profit earning state-owned enterprises in the country. During the same period, the Airports Enterprise also netted a profit of over half a billion Birr.
  • One of the major goals of the merger of the two state-owned enterprises is also raising the efficiency of the airports and profit.

Tullow Oil East Africa updates

A few weeks ago Tullow Oil gave an update of their half year results with operational updates for different countries including Kenya and Uganda.

  • Uganda: Tullow sold a stake in its Uganda oil development to Total Oil for $900 million ($200m cash – $100m on completion, $50m at FID, $50m at first oil, $700m in deferred consideration), and will retain 10% of that and also of a $3.5 billion pipeline through Tanzania. The statement mentions inter-governmental agreements signed to secure pipeline routing and commence key commercial agreements, and last week, Tanzania and Uganda announced the commencement of the construction of a $3.55 billion, 1,445 kilometer-long oil pipeline that will be completed in three years.
  • Ghana has sustained low-cost production due to an absence of drilling in 2017.
  • Kenya: The Implementation experience of the early Tullow early oil pilot scheme will assist the Tullow oil joint venture, Kenya Government and Turkana county to prepare for full field development (however a previous plan to transport oil by truck had been shelved before the elections amid a dispute of sharing oil revenue). 
  • South Lokichar Basin: 14 exploration prospects drilled, 11 oil accumulations discovered – estimated billion barrel basin potential.
  • Other Tullow oil exploration is ongoing in Ghana, Namibia, Zambia, and Mauritania as well as in South America.

 

Kenya Elections 2017 Wrap – Electionske2017

Yesterday, the final results of the August 8, 2017, Kenya elections (electionske2017) were announced by the Independent Electoral and Boundaries Commission (IEBC).

This came with the announcement of the presidential results that were delayed by challenges and agreement on the tallying and transmission of the results that were a spillover of lengthy discussions and court cases (the IEBC chairman said they had 200 court cases) on independent candidates, political party petitions, procurement, electronic gadgets, ballot papers, as well as the brutal murder of the IEBC technology manager just a week before the election.

 

These were the fourth national elections in ten years (2007,2013, 2017 and a constitutional referendum in 2010) and they were closely contested in many places. Besides choosing a new president, 15 million Kenyans also voted on their choice for governor, senator, councilor (MCA), member of parliament (MP), and a county women’s representative from among 14,500 candidates.

But even after the results, there are expectations that dozens of petitions will be filed at the courts on Monday for determination.

 

Electionske2017 Predictions: 

  • Opinion polls were reported in Kenya. They have been widely derided for not accurately predicting the outcome of races and for contradicting each other. This could be due to misunderstandings by Kenyans about what polls mean, and sampling methods used, especially in rural Kenya.
  • Elsewhere, Charles Hornsby,  author of the classic must-read Kenya: A History Since Independence -did a series of election prediction posts in June and early in August that were based on his September 2016 prediction of a 55-45 victory for Kenyatta over the (yet to be chosen at that time) opposition candidate remains plausible. He later revised this; I still predict a Jubilee victory by 52% for Kenyatta and Ruto to 48% for Odinga and Musyoka, with all others less than 1% combined.
  • Another was a research report by Citibank (Citi) published in early August:  On Thursday we hosted a call with Richard Kiplagat, COO of AfricaPractice, to talk through political scenarios. Mr. Kiplagat takes the view that 1) the polls are very close but give a slight edge to the President; 2) the victor is likely to win outright in the first round, given limited support for third party candidates; 3) while the outcome may be disputed initially, the Supreme Court is likely to certify the outcome by September 10th, a judgment that could well be accepted by the loser; 4) widespread or prolonged violence is unlikely this time around, due in part to devolution of the 2010 constitution and in part to the ethnic balance of the incumbent presidential/vice presidential ticket.

What happens next?

For President: The date of the swearing-in of the president constitutionally depends on if there are any petitions

  • Petitions are filed with 7 days after declaration of results
  • If a petition is filed, the Supreme Court hears and gives a determination within 14 days
  • The President-elect is sworn in the first Tuesday following the 14th day if no petition has been filed or the 7th day following the date which the court renders a decision

For Governors transition rules

For Members of Parliament: The 12th parliament i.e the national assembly and the senate are to have their first sitting, not more than thirty days after the elections (tentatively not later than September 8, 2017).

Also, see other electionske2017 posts about:

Governor and County Transition 2017

In July the Cabinet Secretary for Devolution and Planning gazetted rules for governor transition. Governors came into office in 2013, and this month, most of them stood for re-election as incumbents, for a second (and final) year term

Sonko in transition from Nairobi Senator to Governor.

About half of the 47 county governors in Kenya will be going home after losing in the August 8 elections and will be handing over power to new county governors.

The rules called for:

  • All the counties (were to) form Assumption of Office of the Governor Committee(s) – these were largely made up of central government and county officials as well as with nominees from the incoming governor, once they have been declared the winners
  • The committees are to facilitate handing over ceremonies, security of new governor, and communication and facilitation of a smooth transition. 
  • New governors are to be sworn in by a High Court Judge ten days after the declaration of results. The outgoing governor should be present to hand over symbols of power (but their absence shall not hinder the process).
  • EDIT Where the outgoing governor is re-elected for a second term and upon signing the certificate of inauguration, the presiding Judge or the Deputy Registrar as the case may be shall hand over to the Governor any of the county symbols.
  • The County Commissioner shall ensure the provision of adequate security during the conduct of the swearing-in ceremony.
  • The committee shall within 30 days of swearing in provide a report on the:
    • County Assets (offices, houses, schools, cars, computers, software investment, debtors etc. – their status and ownership documents)
    • County liabilities (amounts & status of loans, legal liabilities)
    • County bank accounts (reconciled balances)
    • County Staff and county agencies
    • Ongoing/multi-year projects and donor funded projects
    • Pending litigation – by the county/against the county, and issues with other government agencies.
    • Sources of county government funding for the last 4 years and projections for 2017/18.

Airline Megadeal

As KLM scales down its investment in Kenya Airways, it is involved in another aviation mega-deal.  Air France-KLM is buying a 31% stake in Virgin Atlantic as part of a series of deals that look set to shake up the airline world.

IFC celebrates KLM’s investment in KQ

Excerpts 

  • Delta Air Lines becomes the largest shareholder at 49 percent in Virgin Atlantic and founder Richard Branson cedes control. He will retain a 20% stake through his Virgin Group and the airline will continue to fly under the Virgin brand.
  • Delta Air Lines will take a 10% stake in Air France-KLM with the three airline companies coming together to create a single global joint-venture.
  • China Eastern Airlines will also take a 10% stake in Air France-KLM.
  • Air France-KLM’s investment in Virgin Atlantic will cost around $287 million (£220 million), while the two 10% stake sales are being valued at $981 million (€751 million) each for Delta and China Eastern.

The long-term aim of the deals is to bring the two pre-existing joint ventures—Air France-KLM, Delta and Alitalia, and secondly Delta and Virgin Atlantic—within a single joint-venture. The goal is that all the companies work more closely together, helping them fly more passengers to more destinations at a lower cost (to themselves). Plus, Air France’s balance sheet gets a makeover.

While Virgin has been struggling, as shown by the modest transaction price, it has one very attractive asset: landing slots at London’s crowded Heathrow airport, where passengers tend to pay higher fares

Meanwhile, some tension has been cited in the partnership between KLM and Air France.

  • A clash of national cultures and an inability to understand each other’s languages threatens to make the merged Air France-KLM group of airlines unmanageable, according to a leaked internal company report.
  • French staff in the Franco-Dutch company complain their colleagues from the Netherlands are money-grubbing, while the Dutch regard the Air France staff as aloof, according to the report. Among the petty grievances, there is irritation that a KLM employee working in Paris is charged €10 for lunch in the canteen, while an Air France colleague pays only €4.