Wednesday, November 9, 2016

The Wings of AirAsia Africa

Mauritian governing bodies seem endlessly locked in a culture of missed opportunities. More prone to rely helplessly on the soft corner of the ever-elusive "pays amis" to sustain our economic expansion. Now that the global mood has turned gloomy and competition has never been more cut-throat, we can only pray for the advent of the desired captainship that will clip the wings of entrenched privileges, siphoning of funds and sloppiness.

As much as the Asia-Africa corridor has been a delusional "game-changing move", if smartly harnessed, the arrival of AirAsia could be the real deal. AirAsia, hailed internationally in its category it is worth noting, has already expressed its vision to extend its service to Africa. On its own, Air Mauritius does not have the clout to come through the ruthless skies unscathed.

A large airline such as Qantas let go of its hubris to enter into a productive partnership with Emirates to turn around its struggling years. Is there any valid objection to Air Mauritius joining wings with AirAsia to service Africa and the Indian Ocean islands? A move to be simultaneously complemented with the waiving of all taxes on domestic destination Rodrigues. And why not La Réunion, Seychelles, Comoros, Madagascar, Maldives and Mayotte too in a bid to ignite the Vanilla Islands concept?

The benefits of connecting Mauritius extensively while offering affordable seats are self-evident. No lobby or vested interests required here. Air Mauritius, like many other airlines, would then operate a second airline, a low-cost regional one, in a joint venture while potentially generating more revenue. AirAsia could be granted tax incentives to invest in its hub courtesy of a low-cost/regional terminal (the older terminal of SSR Airport?) that will later accommodate other competitors too. All in a spirit of market and customer friendliness.

Air Mauritius has been charging premium rates. Yet few would approve that delivery has been premium. Clearly Emirates has bandwagonned even if in its case delivery is resolutely premium. Currently, it operates five daily A380 flights on Bangkok, and economy return tickets from London for similar flight time than on Mauritius can fetch about 40% less. The Bangkok route being fiercely challenged by Cathay Pacific, Singapore Airlines and Thai Airways.

Another demonstration of how competition can become a boon: Qatar Airways' forthcoming flight to Auckland. The launching ticket price from London (flight time about 25 hours via Doha) matches the price from London to Mauritius (flight time about 14 hours via Dubai on Emirates). Emirates cannot use the passenger load factor excuse to justify the high rates for destination Mauritius. It is bullish enough to press for a third daily A380 flight.

Turkish Airlines has yet to dent the industriousness of Emirates probably because its image is tainted by political instability at home. Prices practiced by Air Mauritius and other airlines on most European routes, even when promotions are run, appear to be closely aligned without competition watchdogs biting. Ironically, this is one of the factors that contributes to confer Mauritius the status of a relatively expensive destination. Hence distorting the claim of (uniquely) premium quality attributed to the hospitality sector.

In parallel with its stakes in AirAsia Africa, Air Mauritius has no alternative but to focus on medium and long hauls on handpicked destinations and upgrade its offer. To stay relevant Air Mauritius must reinvent itself through namely a massive overhaul of operations and a revisited board member appointment and shareholder structure and activism. To match the aspirations of, say Singapore Airlines, a CEO of the wingspan of Emirates' Tim Clark must be headhunted globally. Dodoland standard, however celebrated, simply won't do.

Iconic advertising magnate David Ogilvy once opined something like: “I have met many CEOs around the world, but I can count how many leaders I have encountered. ” Air Mauritius, a critical contact arm of Mauritius with the world, can afford such a leader. What we cannot afford is lament and dread the many pitfalls of globalization still to come without anticipating the opportunities. To transform the ailing company, this leader needs to astutely, boldly and consistently radiate the strategy for change and to thrive, synergise all stakeholders, express her fat-cutting skills.

As in practically most situations nationwide, no political will, no change. In the airline industry, security cannot be negotiated but ownership sovereignty has to be partially relinquished to gain in effective overall control.  All in all, a balancing act shaped by foresight and acumen. Internet and millennials will continue to impose their footprints. Conspicuous consumption will increasingly yield to the quest for memorable experiences. Accordingly, our marketing intelligence (where consultants are the most ineffective) has to be comprehensively refreshed.

To fruitfully tap the 21st century local and global market, innovation, lean operations and ethical behaviour will be the key drivers more than ever. How savvily the three components blend will determine the competitive edge. And low-cost offers, without necessarily being the norm, will count among the ubiquitous vehicles. Development models that incentivise rent-seeking have never been sustainable anyway. They feed on the bond of most crashes  corruption.

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