76 African Business December 2015

December 2015 African Business 77

Aviation
The estimated cost of
reconstructing Tripoli
International Airport
is $70-$215m.

After years of delays, a Libyan airline

is finally taking to the skies.

Libyan Wings
takes off

ibya witnessed a surge in commercial

flights two years ago as expatriates and
oil workers flocked to Tripoli, eager to
contribute to and profit from the
post-revolution recovery. With Muammar Gaddafi out of the way, hopes were
high that the country would transition to a prosperous,
peaceful democracy. Flag-carriers Libyan Airlines
and Afriqiyah Airways picked up most of the surging
traffic, competing with foreign airlines such as British
Airways, Lufthansa, Alitalia, Emirates Airline and
Etihad Airways.
Passenger demand was so buoyant that, in November 2013, a group of local investors unveiled Libyan
Wings, a start-up airline that planned to launch domestic, regional and intercontinental flights. The company
paid deposits for three widebody Airbus A350s and
four smaller A320neos.
All seemed well in the aviation sector, and then the
calendar rolled over to 2014. As fighting broke out between the myriad groups that had helped to dethrone
Gaddafi, Libya slowly fractured. By the middle of the
year, Fajr Libya, a coalition of Islamist militias, had
driven the internationally-recognised government to
exile in the eastern city of Tobruk. Its assault gutted
Tripoli International Airport, severely damaging the
control tower, terminal building and about 10 aircraft.
Ten more planes were destroyed outright.
With the hub still in ruins, all flights to the capital
now operate out of Mitiga International Airport, a
former US airbase located near the city centre. Traffic is meagre. Just two foreign carriers, Tunisair and
Medavia, fly to the gateway, compared with 24 before
the 2010/2011 revolution. Even Turkish Airlines no
stranger to conflict zones given its daily service to
Mogadishu now deems Tripoli too dangerous. In this
climate, many pundits understandably wrote off Libyan
Wings as a lost cause. But they spoke too soon. After
nearly two years of delays, the airline took to the skies
this September with a leased A319. Though its inaugural Istanbul service was quickly suspended Turkey

Above: Between the

2010/2011 revolution
and the 2013/2014 civil
war, 13 foreign airlines
flew into Libya. The
number today is two.

imposed new visa requirements immediately after the

launch chief executive Edgardo Badiali persevered.
Flights to Tunis followed in October, and at the time
of writing Khartoum was poised to join the network.
The signs in Libya at the moment are very positive,
Badiali insists. There is huge potential. If the country
settles down, besides the big need [for air travel] of
Libyans living at home and abroad, you also have all
the demand of foreign investors, rebuilding workers,
and so on.

Odd choice?
Prioritising flights to Sudan may seem an odd choice
given the far-reaching international sanctions against
the country, but much has changed since Libyan
Wings first drew up its business plan. The European
Union (EU) now bans all Libyan carriers from entering its airspace, insisting that local regulators are unable to conduct safety oversight in the midst of a civil
war. With air routes to Cairo also closed for political
reasons, Khartoum has become a popular stopover for
Egyptian labourers seeking work in Libya.
Morocco, Algeria and Jordan are now being lined
up for route launches, though Badiali stresses that securing bilateral designations is a long-winded process
in the Middle East and North Africa (MENA). Its a
little bit more time-demanding than in a European
or American environment, he says, citing the need
to hire General Sales Agents in each overseas market.
Notwithstanding the hurdles thrown down by
Brussels, Europe remains firmly in the crosshairs.
When Libyas flag-carriers agreed to a voluntary EU
ban in 2012 before being formally placed on the
blacklist in 2014 they began using wet-lease agreements to preserve European connectivity. These deals
involve contracting foreign operators to provide aircraft and crew for flights across the Mediterranean.
As a stopgap solution, wet-leases are highly effective.

Our
first step
is to settle
our MENA
network,
and then we
can start to
investigate
various
options.

$215m
But they are also costly, and few wet-lease providers
will agree to park their assets in Tripoli overnight.
Afriqiyah found a way around the problem in 2014,
when it briefly obtained a flag of convenience through
Irelands Air Contractors. Under the complex arrangement, two of Afriqiyahs A320s had their registration
switched to Ireland, even while they remained under
the legal ownership of the Libyan company. By also
incorporating elements of a wet-lease deal, the partnership allowed Air Contractors to fly between Libya
and Europe with Afriqiyahs metal. Badiali now wants
to mimic the arrangement for Libyan Wings.
There are quite a number of specialised ACMI
[wet-lease] operators which can do this. You can do
it as a kind of hybrid system with certain parts of the
classic ACMI under your responsibility, he affirms.
Because we would guarantee the insurance we
could easily base the aircraft in Tripoli.
Having partnered with a classical, recognised underwriter on the London insurance market, Libyan
Wings should have little difficulty security its own flag
of convenience for European connections. Nonetheless, route launches to the continent will take time
to finalise. Our first step is to settle our MENA
network, and then we can start to investigate various
options [for Europe], Badiali insists. First we need
to make sure we have a good position at home.
Government-led talks with Turkish companies to
reconstruct Tripoli International Airport have meanwhile reached an advanced stage, paving the way
for an eventual move to the primary gateway. When
that happens, Badiali has visions of Libyas capital
becoming an intercontinental hub at the crossroads
of Europe, Africa and the Middle East.
Keeping his eye firmly on the long game, the chief
executive also sees potential for Libyan Wings to
establish itself as a digital pioneer in North Africas
lethargic aviation sector. The company is investing
heavily in mobile channels, mindful of the huge popularity of handheld-devices among Libyas tech-savvy
youth. Its their daily bread, he says. As soon as
there is a banking system, mobile [sales] will be very
effective We can position ourselves in the mid term
as an innovative company in this part of the world.
Back in the present day, however, Libyas challenges
are vast and unnerving. The country has, by most
reasonable measures, become a failed state, meaning
that all local ventures are beholden to the vagaries of
warring factions. We have to be a little bit realistic,
Badiali says of the airlines prospects. The political
agenda dictates the commercial one.


Martin Rivers