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ETinCaribe
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Re: Green Africa Airways to order 100 B737 MAX8

Sat Dec 22, 2018 3:20 am

Talk about making a splash, ok Green Africa, you got my attention. I hope it works out, but why put extra pressure on yourself as now the expectations are sky high and the challenges are not any easier. Now you gotta deliver Big Shots!!
 
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Rajahdhani
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Re: Green Africa Airways to order 100 B737 MAX8

Sat Dec 22, 2018 4:29 am

usflyer msp wrote:
LupineChemist wrote:
The LCC model will fail in Africa until someone gets it right so it's worth a proverbial shot and there are far worse ways to burn money in the aviation.

I think it's unlikely to work but I wish them the best and think Nigeria has enough population to maybe make it work,


The model with continue to fail in Africa, outside of South Africa, until those countries get decent sized middle-classes.


1). Define decent sized.

Let's first base the discussion on facts;

https://businesstech.co.za/news/finance/257337/the-biggest-economies-in-africa/[/code]
"Nigeria is Africa’s largest economy by some margin – with a growth projection so large that it is unlikely that South Africa will surpass it. But Nigeria’s advantage – its almost 200 million-odd population, which lends itself to such high GDP figures – is also its downfall."


A). The .za suffix identifies the source nicely, though the article is rather balanced when presenting fact. A good read overall, and one the certainly has a South African perspective, though not a distinct feeling of bias.
B). From it, I picked the crux of our source of contention - and it paired beautifully in that quote from the article. To that, the article continues to a discussion of GDP per Capita...

https://businesstech.co.za/news/finance/257337/the-biggest-economies-in-africa/
"In this measure, Nigeria slips significantly to 15th position on the list, just ahead of Egypt. Here, other African nations shine through – such as the business-friendly Mauritius, and the oil-rich Gabon, which produce billions of dollar’s worth of value, while holding relatively small population. While South Africa has never been the biggest, it has always occupied a special place in being a high-GDP, high population country. However, this picture is slowly changing."


It is from that change, though - that massive flows will begin to emerge.

In order to demonstrate that I am rooted in a realistic view and not biased towards the Nigerian perspective, I'll offer the a current report on some of the issues effecting the nation recently:
https://www.cnn.com/2018/06/26/africa/nigeria-overtakes-india-extreme-poverty-intl/index.html "Nigeria has overtaken India as the country with the largest number of people living in extreme poverty, with an estimated 87 million Nigerians, or around half of the country's population, thought to be living on less than $1.90 a day.


So, based in that pallate cleanser - let's double back to a table of facts presented in the first article - which lists the nations by GDP Per Capita - and then let us discuss their locations and how those can affect/effect aviation;
-with Botswana, Namibia and South Africa, Swaziland, and Angola* holding spots 3, 4, 5, 9 and 7 respectively - low cost operations to and around the Southern African region would, and do make financial sense - and we see it in how well the South African based carriers have done in the region. *(admittedly, Angola being the only Portuguese speaking nation in the grouping).

that said:
the 'belt' to of Northern Africa becomes apparent in the Top 10 discussion, with Libya, Tunisia, and Algeria coming in at 6, 8 and 10.

Backing to the discussion of overall GDP growth, though - and we see that:
Egypt (3), Algeria (4), Angola (5), Morocco (6), Ethiopia (7), Kenya (8), Sudan (9) Tanzania (10).

Here are static conditions for the 737-MAX 7 out of JNB (greatest range of the MAX family, and I am forgiving the hot and high performance issues that might limit range a bit, not to mention cargo).
http://www.gcmap.com/mapui?R=3850nm%40JNB&MS=wls&DU=mi

Give that same 737 MAX 7 to a Nigerian Based carrier and here are is that range:
http://www.gcmap.com/mapui?R=3850nm%40LOS&MS=wls&DU=mi

From Greenland to Madagascar, from Guyana to Turkminestan - all within range from LOS.

Geographically, with the current equipment, Nigeria's Geographic advantage becomes clear, and it's GDP growth projections will provide the fertile ground to have an increasingly growing economic base to pull from. A LCC based here need not worry about just Africa (as all of those top 10, and indeed every African nation) as being within range - it can reach Europe, part of South America, and part into Central Asia. That can mean that even as a connector, a well placed and developed LCC can become a compelling price leader on some of these routes. Paradoxically, Nigeria's 'poor' population, and petro-chemical richness can be translated into low costs for an airline to capitalize upon.
 
AsoRock
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Re: Green Africa Airways to order 100 B737 MAX8

Sat Dec 22, 2018 5:14 am

seabosdca wrote:
Nigeria is the seventh most populous country in the world. It has a poor road network, both within the country and to neighboring countries. It has essentially no rail.

That is an absolutely enormous untapped market for air travel. 100 737 MAX is a drop in the bucket.

To date, airlines that have tried to tap the market have either been run by connected individuals with little airline experience, or have drowned in a soup of regulatory dysfunction. Between the airline experience in this group and the good local connections, I think there is reason to hope this venture might end up differently. And the first airline to truly succeed in Nigeria will be a force to be reckoned with throughout Africa and a major improvement in the lives of everyday Nigerians, or at least the wealthiest quarter or so of them.

I keep hoping that something will take off there because I think it would be good news for the world. This venture gives me more hope than any previous one. My fingers are crossed.


I agree, this project seems built on the right foundations. Arik Air came also with a Big Bang, however, I recall the source of funding was dubious from the start, with many people pointing to a corrupt link to the Obasajo regime, and the management team itself was a family affair with no solid experience in the airline business.
This venture however seems linked to a US based venture capital firm, with the airline management hand picked from seasoned airline staff throughout the world including American Airlines and many successful ULCCs including Indian carriers. So everything just feels right. I just wish them to overcome the lack of government real support in providing the right infrastructure and enabling environment for airlines to thrive. Jet fuel prices there for example are among the highest in the world, multiple taxation and so many fees to pay.

This airline would really need to address the utilization rate of these expensive modern aircraft for example. Flights should commence at 6am and the last flight should come in by midnight or later. At the moment due to many reasons aircraft utilization is 8 hours at best.

I really wish them good luck. I personally don’t understand the magnitude of the order. 50 firm plus 50 options on the 737 Max seems gigantic. Unless they have a firm plan to grow aggressively into Africa as a pan African connecting carrier ?
Perhaps it would be justified. I personally wish they would use the entire 100 frame order and more.
 
usflyer msp
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Re: Green Africa Airways to order 100 B737 MAX8

Sat Dec 22, 2018 5:28 am

Rajahdhani wrote:
usflyer msp wrote:
LupineChemist wrote:
The LCC model will fail in Africa until someone gets it right so it's worth a proverbial shot and there are far worse ways to burn money in the aviation.

I think it's unlikely to work but I wish them the best and think Nigeria has enough population to maybe make it work,


The model with continue to fail in Africa, outside of South Africa, until those countries get decent sized middle-classes.


1). Define decent sized.


My personal opinion is that a country is ready for LCC's when 1/3 if the population is middle-class. (India and China are exceptions since 20% of 1 billion people is still 200M middle class citizens). Nigeria is currently around 12%.

Let's first base the discussion on facts;
https://businesstech.co.za/news/finance/257337/the-biggest-economies-in-africa/[/code]
"Nigeria is Africa’s largest economy by some margin – with a growth projection so large that it is unlikely that South Africa will surpass it. But Nigeria’s advantage – its almost 200 million-odd population, which lends itself to such high GDP figures – is also its downfall."


A). The .za suffix identifies the source nicely, though the article is rather balanced when presenting fact. A good read overall, and one the certainly has a South African perspective, though not a distinct feeling of bias.
B). From it, I picked the crux of our source of contention - and it paired beautifully in that quote from the article. To that, the article continues to a discussion of GDP per Capita...

https://businesstech.co.za/news/finance/257337/the-biggest-economies-in-africa/
"In this measure, Nigeria slips significantly to 15th position on the list, just ahead of Egypt. Here, other African nations shine through – such as the business-friendly Mauritius, and the oil-rich Gabon, which produce billions of dollar’s worth of value, while holding relatively small population. While South Africa has never been the biggest, it has always occupied a special place in being a high-GDP, high population country. However, this picture is slowly changing."


It is from that change, though - that massive flows will begin to emerge.

In order to demonstrate that I am rooted in a realistic view and not biased towards the Nigerian perspective, I'll offer the a current report on some of the issues effecting the nation recently:
https://www.cnn.com/2018/06/26/africa/nigeria-overtakes-india-extreme-poverty-intl/index.html "Nigeria has overtaken India as the country with the largest number of people living in extreme poverty, with an estimated 87 million Nigerians, or around half of the country's population, thought to be living on less than $1.90 a day.


So, based in that pallate cleanser - let's double back to a table of facts presented in the first article - which lists the nations by GDP Per Capita - and then let us discuss their locations and how those can affect/effect aviation;
-with Botswana, Namibia and South Africa, Swaziland, and Angola* holding spots 3, 4, 5, 9 and 7 respectively - low cost operations to and around the Southern African region would, and do make financial sense - and we see it in how well the South African based carriers have done in the region. *(admittedly, Angola being the only Portuguese speaking nation in the grouping).

that said:
the 'belt' to of Northern Africa becomes apparent in the Top 10 discussion, with Libya, Tunisia, and Algeria coming in at 6, 8 and 10.

Backing to the discussion of overall GDP growth, though - and we see that:
Egypt (3), Algeria (4), Angola (5), Morocco (6), Ethiopia (7), Kenya (8), Sudan (9) Tanzania (10).

Here are static conditions for the 737-MAX 7 out of JNB (greatest range of the MAX family, and I am forgiving the hot and high performance issues that might limit range a bit, not to mention cargo).
http://www.gcmap.com/mapui?R=3850nm%40JNB&MS=wls&DU=mi

Give that same 737 MAX 7 to a Nigerian Based carrier and here are is that range:
http://www.gcmap.com/mapui?R=3850nm%40LOS&MS=wls&DU=mi

From Greenland to Madagascar, from Guyana to Turkminestan - all within range from LOS.

Geographically, with the current equipment, Nigeria's Geographic advantage becomes clear, and it's GDP growth projections will provide the fertile ground to have an increasingly growing economic base to pull from. A LCC based here need not worry about just Africa (as all of those top 10, and indeed every African nation) as being within range - it can reach Europe, part of South America, and part into Central Asia. That can mean that even as a connector, a well placed and developed LCC can become a compelling price leader on some of these routes. Paradoxically, Nigeria's 'poor' population, and petro-chemical richness can be translated into low costs for an airline to capitalize upon.


This is where you lose me -

a) I don't think GDP per capita is a good metric to use. Air service needs are very dependent upon the distribution of that GDP. Otherwise, everyone would be rushing to serve SSG right now.
b) South African LCC's have only done well domestically - every time they attempt to fly abroad it is a disaster. High aviation taxes and immigration charges retard demand and the overwhelmingly ZA point-of-sale leads to many empty seats.
c) Jet Fuel in Nigeria is some of the most expensive in the world - and there are frequently shortages due to a lack of refining capacity in the country. Tankering fuel is a completely normal thing in Naija.
d) Nigeria's "poor" population means Nigerian carriers generally have difficulty finding skilled workers and frequently have to pay through the nose to bring in expats to fly and maintain their aircraft.
e) Have you ever been to the Lagos Airport or Nigeria? No one willingly changes planes there for a reason. It would take a new terminal and a complete redesign of Nigerian customs/immigration/visa policy to make LOS into some sort of connecting hub. LOS has no sterile transit area (I think technically there is one but it is never staffed) and bags are not transferred. To transit at LOS, one must wait for an immigration offer to become available to escort you - they take you to the baggage claim to pickup your baggage, through customs, to the check-in area to check-in area again, and then through emigration to your gate. After, the immigration agent has spent the last 45 minutes with you they are going to expect a healthy tip (dash in the local lingo). As it stands right now, LOS is DOA as a connecting hub.
 
MaksFly
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Re: Green Africa Airways to order 100 B737 MAX8

Sat Dec 22, 2018 5:40 am

Did Boeing fall for one of those "Nigerian Prince" letters? They will buy 1,000 airplanes... but first, Boeing must pay for some lawyers and transaction fees before they can send the gold bards to pay for those planes. =)
 
maint123
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Re: Green Africa Airways to order 100 B737 MAX8

Sat Dec 22, 2018 5:44 am

737 Max? Why not 737 NG?
A new airlines should not take a risk with a unproven plane. A mix of 737 ng and max planes might have been better.
And a 100 plane order does seem excessive. As you need to continuously increase/upgrade manpower and systems with induction of new planes. Can't keep the planes lying around.
 
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SEPilot
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Re: Green Africa Airways to order 100 B737 MAX8

Sat Dec 22, 2018 2:26 pm

usflyer msp wrote:
SEPilot wrote:
I have come to the conclusion that there is one overriding reason why poor countries remain poor, and it is government corruption. And one of the side effects of a dishonest government is that it makes it much easier for people in the general population to justify being dishonest themselves. I spent the better part of a year back in the 80s traveling around the eastern US with an African man living mostly with Africans. And the Nigerians had a bad reputation among them. The anecdotal stories about Nigerian prince screams on the internet add to this. So I have to join the generally expressed skepticism about this venture. Even if the directors of the company are honest, finding honest and competent help is not going to be easy. Running an airline requires diligent, honest people all up and down the line. And in a country without any trace of that in its culture it is going to be extremely difficult.


Whoa - take a step back!
I am very skeptical of this venture but you just insulted an entire country and called them all thieves and liars.
The vast majority of Nigerians are good, honest people. This company will not fail because they can't find trustworthy employees (that is a bit of ludicrous suggestion) -- it will probably fail because their business plan is overly grandiose and not rooted in economic reality.

My point is not to malign the Nigerian people. I am married to a Filipina and have lived in the Philippines for a year in total. Filipinos in the Philippines are not well regarded as workers; they are considered lazy and lacking in initiative. But get them over here to the US and they swiftly become the most diligent and industrious workers you could ever desire. It is not the people themselves, it is the environment in which they live and work. And That is what I am referring to.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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seabosdca
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Re: Green Africa Airways to order 100 B737 MAX8

Sat Dec 22, 2018 11:23 pm

MaksFly wrote:
Did Boeing fall for one of those "Nigerian Prince" letters?


Good grief. In an environment where there are six-year backlogs for narrowbody jets, orders like this are low-risk and high-upside. If the order falls through, there will be plenty of other customers to occupy the slots. If the airline succeeds against all odds, Boeing is in on the ground floor of a venture that could eventually be the size of ET. You can't succeed in business without being able to analyze risk clearly, but you also can't succeed in business without taking the occasional risk.
 
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lightsaber
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Re: Green Africa Airways to order 100 B737 MAX8

Sun Dec 23, 2018 12:12 am

seabosdca wrote:
MaksFly wrote:
Did Boeing fall for one of those "Nigerian Prince" letters?


Good grief. In an environment where there are six-year backlogs for narrowbody jets, orders like this are low-risk and high-upside. If the order falls through, there will be plenty of other customers to occupy the slots. If the airline succeeds against all odds, Boeing is in on the ground floor of a venture that could eventually be the size of ET. You can't succeed in business without being able to analyze risk clearly, but you also can't succeed in business without taking the occasional risk.

Green Africa's chances will depend on financing and a good team.

But am I a bad person for also thinking about a Nigerian prince needing help getting funds out of the country.

Lightsaber
Winter is coming.
 
AsoRock
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Re: Green Africa Airways to order 100 B737 MAX8

Wed Dec 26, 2018 1:35 pm

Does anyone know if this order is actually 50 Firm Orders + 50 Options? Is there a difference between a Commitment and a Firm Order? Would appreciate any clarifying information on the modalities of aircraft orders.
Also, I've often wondered, why night flights do not operate in Nigeria. Why do most aircraft within the country fly in by 8PM latest and retire till the next day? As I said above, to improve the economics of it, an airline operation in Nigeria needs to maximise utilization rates. Why do flights for example on the busy Lagos-Abuja sector not depart past 9 PM? 10PM,? 11PM? I realize Nigerians prefer daylight flights, they were used to it to a protracted period where runway lighting was out of service, but now, I know for a fact Abuja, Lagos and Port Harcourt airports at least, have 24-hour a day power (although power outages are frequent).
Appreciate your feedback!
 
EBJ68
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Re: Green Africa Airways to order 100 B737 MAX8

Wed Dec 26, 2018 1:51 pm

I'm curius to know what the justification is for ordering brand new airplanes in those numbers. Would it be an embarrassment to the government or to the new company to utilize pre-owned aircraft?
 
sxf24
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Re: Green Africa Airways to order 100 B737 MAX8

Wed Dec 26, 2018 2:13 pm

EBJ68 wrote:
I'm curius to know what the justification is for ordering brand new airplanes in those numbers. Would it be an embarrassment to the government or to the new company to utilize pre-owned aircraft?


A sufficient number of suitable used aircraft, particularly 737-800s, do not exist.
 
jetmatt777
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Re: Green Africa Airways to order 100 B737 MAX8

Wed Dec 26, 2018 3:48 pm

EBJ68 wrote:
I'm curius to know what the justification is for ordering brand new airplanes in those numbers. Would it be an embarrassment to the government or to the new company to utilize pre-owned aircraft?


This is also likely a PR push. If you’re still seeking investors, signing a large order with Boeing for the newest, latest-and-greatest jet puts out the message that this is a serious venture and worthy of investment. Whereas an airline operating 5 used airplanes with mixed-matched liveries and interiors would not inspire as much confidence in investors.

Even if they don’t take delivery of all of these, the down payment check to hold the slots is worth the PR if they can secure some large investors to back it now.
 
winginit
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Re: Green Africa Airways to order 100 B737 MAX8

Wed Dec 26, 2018 4:22 pm

usflyer msp wrote:
797 wrote:
I'm super impressed they recruited three industry heavyweights: Tom Horton, former Chairman/CEO of American Airlines; William Shaw, Founder and former CEO of VivaColombia; and Virasb Vahidi, former CCO of American Airlines.

I respect Tom and Virasb dearly. Excellent people. I'm sure the project is sound for them to go in like that.

More info here: https://airwaysmag.com/airlines/nigeria ... 737-max-8/


I disagree. Tom, Bill, and Virasb are not running the airline - they are just on an advisory board despite what the press releases may imply.

Flying in Africa is almost a different world - many experienced airline managers have failed there. See Stelios at Fastjet, Branson at Virgin Nigeria, Skywest at Ghana International, Germania at Gambia Bird, RAM at Air Senegal International, Brussels at Korongo.

Lots of sharp people have failed there.


I'll second this.

Let's be very clear - this airline is being run by Babawande Afolabi, a 30 year old whose aviation experience is composed exclusively of a four month internship at AA in 2013.
 
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seabosdca
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Re: Green Africa Airways to order 100 B737 MAX8

Wed Dec 26, 2018 5:20 pm

EBJ68 wrote:
I'm curius to know what the justification is for ordering brand new airplanes in those numbers. Would it be an embarrassment to the government or to the new company to utilize pre-owned aircraft?


It may well be cheaper to obtain, finance, and operate the brand-new aircraft. Used aircraft deals can't take advantage of Ex-Im Bank or similar economic development financing; require time and expense for reconditioning and harmonizing configurations to the extent possible; and result in aircraft that are considerably more expensive and labor-intensive to maintain and can't be utilized as heavily. IMO, paradoxically enough, it is major legacy airlines that have gotten the best results from used aircraft, while startup airlines have often been more successful buying new.
 
EBJ68
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Re: Green Africa Airways to order 100 B737 MAX8

Wed Dec 26, 2018 9:58 pm

seabosdca wrote:
EBJ68 wrote:
I'm curius to know what the justification is for ordering brand new airplanes in those numbers. Would it be an embarrassment to the government or to the new company to utilize pre-owned aircraft?


It may well be cheaper to obtain, finance, and operate the brand-new aircraft. Used aircraft deals can't take advantage of Ex-Im Bank or similar economic development financing; require time and expense for reconditioning and harmonizing configurations to the extent possible; and result in aircraft that are considerably more expensive and labor-intensive to maintain and can't be utilized as heavily. IMO, paradoxically enough, it is major legacy airlines that have gotten the best results from used aircraft, while startup airlines have often been more successful buying new.


That's interesting. I presume the legacies would employ used aircraft on the lower frequency routes, given they can't be used as heavily.
 
alyusuph
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Re: Green Africa Airways to order 100 B737 MAX8

Thu Dec 27, 2018 4:39 am

usflyer msp wrote:
SEPilot wrote:
I have come to the conclusion that there is one overriding reason why poor countries remain poor, and it is government corruption. And one of the side effects of a dishonest government is that it makes it much easier for people in the general population to justify being dishonest themselves. I spent the better part of a year back in the 80s traveling around the eastern US with an African man living mostly with Africans. And the Nigerians had a bad reputation among them. The anecdotal stories about Nigerian prince screams on the internet add to this. So I have to join the generally expressed skepticism about this venture. Even if the directors of the company are honest, finding honest and competent help is not going to be easy. Running an airline requires diligent, honest people all up and down the line. And in a country without any trace of that in its culture it is going to be extremely difficult.


Whoa - take a step back!
I am very skeptical of this venture but you just insulted an entire country and called them all thieves and liars.
The vast majority of Nigerians are good, honest people. This company will not fail because they can't find trustworthy employees (that is a bit of ludicrous suggestion) -- it will probably fail because their business plan is overly grandiose and not rooted in economic reality.


Most of the time we forget that both the corrupter and the corruptee are a problem. Most poor countries are poor to a large extent not because of petty corruption, but grand corruption involving mega projects and contracts- which includes massive capital flights. And who is the corrupter at those levels?
I am not an Airbus or Boeing fan, just an aircraft fan
 
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SEPilot
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Re: Green Africa Airways to order 100 B737 MAX8

Thu Dec 27, 2018 11:59 am

alyusuph wrote:
usflyer msp wrote:
SEPilot wrote:
I have come to the conclusion that there is one overriding reason why poor countries remain poor, and it is government corruption. And one of the side effects of a dishonest government is that it makes it much easier for people in the general population to justify being dishonest themselves. I spent the better part of a year back in the 80s traveling around the eastern US with an African man living mostly with Africans. And the Nigerians had a bad reputation among them. The anecdotal stories about Nigerian prince screams on the internet add to this. So I have to join the generally expressed skepticism about this venture. Even if the directors of the company are honest, finding honest and competent help is not going to be easy. Running an airline requires diligent, honest people all up and down the line. And in a country without any trace of that in its culture it is going to be extremely difficult.


Whoa - take a step back!
I am very skeptical of this venture but you just insulted an entire country and called them all thieves and liars.
The vast majority of Nigerians are good, honest people. This company will not fail because they can't find trustworthy employees (that is a bit of ludicrous suggestion) -- it will probably fail because their business plan is overly grandiose and not rooted in economic reality.


Most of the time we forget that both the corrupter and the corruptee are a problem. Most poor countries are poor to a large extent not because of petty corruption, but grand corruption involving mega projects and contracts- which includes massive capital flights. And who is the corrupter at those levels?

It always comes from the top. But corruption at the top cannot survive long term unless the people tolerate it.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
mapletux
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Re: Green Africa Airways to order 100 B737 MAX8

Thu Dec 27, 2018 12:33 pm

SEPilot wrote:
It always comes from the top. But corruption at the top cannot survive long term unless the people tolerate it.


"The people" don't really have a choice to not "tolerate it" when the corrupt ones at the top have almost absolute control over everything.
 
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SEPilot
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Re: Green Africa Airways to order 100 B737 MAX8

Thu Dec 27, 2018 1:26 pm

mapletux wrote:
SEPilot wrote:
It always comes from the top. But corruption at the top cannot survive long term unless the people tolerate it.


"The people" don't really have a choice to not "tolerate it" when the corrupt ones at the top have almost absolute control over everything.

This may be true once they have established control. But how did that happen? A dictatorship always starts with a large amount of popular approval. And a kleptocracy also cannot establish itself without it.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
mapletux
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Re: Green Africa Airways to order 100 B737 MAX8

Thu Dec 27, 2018 2:01 pm

SEPilot wrote:
mapletux wrote:
SEPilot wrote:
It always comes from the top. But corruption at the top cannot survive long term unless the people tolerate it.


"The people" don't really have a choice to not "tolerate it" when the corrupt ones at the top have almost absolute control over everything.

This may be true once they have established control. But how did that happen? A dictatorship always starts with a large amount of popular approval. And a kleptocracy also cannot establish itself without it.


Popular support is optional. Any combination of colonisation and it's legacy, military rule, support by one side during the cold war, ethnic jingoism in a heterogeneous country, etc. can result in people in authority who are not accountable to the general populace. Lack of accountability is the main enabler of systemic corruption.

I fear that we are drifting away from the original topic so I would like to mention a few things that I think may help to make the airline successful.

    New refineries are under construction in Nigeria that will come on stream in a couple of years.This will make Jet A1 cheaper and more readily available.
    Ongoing investment in upgrading aviation infrastructure which should allow flight operations to occur for longer at more airports in Nigeria.
    New terminals are being built at Port Harcourt, Abuja, Lagos and Kano which will be able to handle significantly larger passenger numbers. (The first two have been commisioned)
    Nigeria's position around the centre of Africa makes it a natural hub as the Single African Air Transport Market develops.
 
guyanam
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Re: Green Africa Airways to order 100 B737 MAX8

Thu Dec 27, 2018 4:06 pm

SEPilot wrote:
? A dictatorship always starts with a large amount of popular approval. And a kleptocracy also cannot establish itself without it.



Not in Africa. Corruption was a function of the domestic elites, including the military, foreign powers which often ensured the survival of this kleptocracies, and major corporate interests, most recently out of China. Most of the ordinary populations are in survival mode, and the middle classes are quite weak.
 
smartplane
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Re: Green Africa Airways to order 100 B737 MAX8

Thu Dec 27, 2018 7:23 pm

AsoRock wrote:
Does anyone know if this order is actually 50 Firm Orders + 50 Options? Is there a difference between a Commitment and a Firm Order? Would appreciate any clarifying information on the modalities of aircraft orders.

The international financial and accounting communities, together with IATA, have been attempting to set and apply standards to commercial aircraft, engine and accessory orders for decades.

You're best guide is the financial treatment and disclosure by Boeing. Discount media releases, as these can seemingly wrap firm, option, commitment and order into the same sentence or paragraph.

The ONLY firm order is an unconditional order. That declaration means the customer has completed negotiations to a flyaway standard (not necessarily via the airframe OEM). The aircraft is flyable and operable in commercial airline service. In other words it has placed and financed unconditional orders for the equivalent number of engines, interiors and other equipment.

No airline or leasing company will normally go unconditional on the air frame, without going unconditional on engines, interiors, etc, unless they are large enough to self-finance. Harmonising these events can be extremely time consuming for financiers.

And no airline is large enough to self-finance. They may like the US3 and EK self-finance up to and including delivery, but will have take out financing synchronised with delivery, or shortly thereafter.

At the very best, the order for 50 aircraft will be conditional. Conditional means conditional on the customer and supplier reaching agreement. Conditional on negotiating delivery dates, finance, interior configuration, EXIM backing, disposing of existing aircraft.....

For example, one of the conditions will be the customer securing finance on terms and conditions satisfactory to the customer. At the conditional order point, the OEM will try to establish firm numbers, as 'satisfactory to the customer' is a moving target.

OEM's are keen to shift conditional orders to unconditional at the earliest opportunity, so will attempt to remove as many road blocks as possible. For example, Boeing may use Boeing Capital to negotiate funding and acquire aircraft to be traded, including paying early termination penalties on finance or leasing.

The air frame and engine are a package for this transaction. But for many larger customers, air frame and engine are negotiated separately with the relevant OEM's, even when there is an engine choice of one.

For example, EK doesn't want Airbus or Boeing to know the value of their engine orders (including declared unit price, credits, parts SOR deal, buyback terms (obsolete parts), maintenance contract T&C's, PiP's, performance agreements and penalties, third party maintenance work guarantees, etc.
 
AsoRock
Posts: 173
Joined: Wed May 31, 2006 4:00 pm

Re: Green Africa Airways to order 100 B737 MAX8

Sun Dec 30, 2018 8:02 am

smartplane wrote:
AsoRock wrote:
Does anyone know if this order is actually 50 Firm Orders + 50 Options? Is there a difference between a Commitment and a Firm Order? Would appreciate any clarifying information on the modalities of aircraft orders.

The international financial and accounting communities, together with IATA, have been attempting to set and apply standards to commercial aircraft, engine and accessory orders for decades.

You're best guide is the financial treatment and disclosure by Boeing. Discount media releases, as these can seemingly wrap firm, option, commitment and order into the same sentence or paragraph.

The ONLY firm order is an unconditional order. That declaration means the customer has completed negotiations to a flyaway standard (not necessarily via the airframe OEM). The aircraft is flyable and operable in commercial airline service. In other words it has placed and financed unconditional orders for the equivalent number of engines, interiors and other equipment.

No airline or leasing company will normally go unconditional on the air frame, without going unconditional on engines, interiors, etc, unless they are large enough to self-finance. Harmonising these events can be extremely time consuming for financiers.

And no airline is large enough to self-finance. They may like the US3 and EK self-finance up to and including delivery, but will have take out financing synchronised with delivery, or shortly thereafter.

At the very best, the order for 50 aircraft will be conditional. Conditional means conditional on the customer and supplier reaching agreement. Conditional on negotiating delivery dates, finance, interior configuration, EXIM backing, disposing of existing aircraft.....

For example, one of the conditions will be the customer securing finance on terms and conditions satisfactory to the customer. At the conditional order point, the OEM will try to establish firm numbers, as 'satisfactory to the customer' is a moving target.

OEM's are keen to shift conditional orders to unconditional at the earliest opportunity, so will attempt to remove as many road blocks as possible. For example, Boeing may use Boeing Capital to negotiate funding and acquire aircraft to be traded, including paying early termination penalties on finance or leasing.

The air frame and engine are a package for this transaction. But for many larger customers, air frame and engine are negotiated separately with the relevant OEM's, even when there is an engine choice of one.

For example, EK doesn't want Airbus or Boeing to know the value of their engine orders (including declared unit price, credits, parts SOR deal, buyback terms (obsolete parts), maintenance contract T&C's, PiP's, performance agreements and penalties, third party maintenance work guarantees, etc.


Thanks a lot for your thorough clarifications! I couldnt even find these online anywhere. Cheers
 
2175301
Posts: 1894
Joined: Wed May 16, 2007 11:19 am

Re: Green Africa Airways to order 100 B737 MAX8

Sun Dec 30, 2018 6:18 pm

berari wrote:
I'm all for this, but here are my questions:
- How does an airline that has not started operations order 100 aircraft?
- The above especially in a hostile environment such as aviation in Africa?
- How does Boeing accept such commitments when the airline has not even started


By requiring a solid non-refundable deposit; which is typical for any airline that does not have a long term history of financial stability related to the size of the order. Even the most financially secure airlines are required to put down a deposit on orders; although it will likely be a smaller % than a startup airline like this with no history.

This is really almost a no loose scenario for Boeing. Worst case, they keep the deposit and have to sell a few partially completed aircraft to others (and the deposit for 50 aircraft will be enough to cover the cost of a few white tails). There are many other airlines interested in 737's so the production slots can be sold later as needed.

Have a great day,
 
smartplane
Posts: 1526
Joined: Fri Aug 03, 2018 9:23 pm

Re: Green Africa Airways to order 100 B737 MAX8

Sun Dec 30, 2018 7:05 pm

2175301 wrote:
berari wrote:
I'm all for this, but here are my questions:
- How does an airline that has not started operations order 100 aircraft?
- The above especially in a hostile environment such as aviation in Africa?
- How does Boeing accept such commitments when the airline has not even started


By requiring a solid non-refundable deposit; which is typical for any airline that does not have a long term history of financial stability related to the size of the order. Even the most financially secure airlines are required to put down a deposit on orders; although it will likely be a smaller % than a startup airline like this with no history.

This is really almost a no loose scenario for Boeing. Worst case, they keep the deposit and have to sell a few partially completed aircraft to others (and the deposit for 50 aircraft will be enough to cover the cost of a few white tails). There are many other airlines interested in 737's so the production slots can be sold later as needed.

Until each tranche (or sometimes each aircraft) goes unconditional, deposits are very small (depends on delivery proximity) and are refundable.

One of many attractions of ordering NB v WB aircraft, is as build times have reduced, so payment milestones have shortened (closer to actual delivery). Smaller $'s tied up for less time.

Until Boeing has programmed firm delivery dates for these aircraft, and those dates are 12 months or less, deposits will be miniscule and refundable. If aircraft are highly customised for specific operators, payment milestones start earlier and not refundable (but financiers and leasors tend to run a mile from those deals).
 
blueflyer
Posts: 4352
Joined: Tue Jan 31, 2006 4:17 am

Re: Green Africa Airways to order 100 B737 MAX8

Sun Dec 30, 2018 10:19 pm

usflyer msp wrote:
I'm super impressed they recruited three industry heavyweights: Tom Horton, former Chairman/CEO of American Airlines; William Shaw, Founder and former CEO of VivaColombia; and Virasb Vahidi, former CCO of American Airlines.

I respect Tom and Virasb dearly.

I'm sure they are talented executives with highly relevant and beneficial experience running an airline. Given the context, however, I'm hoping they are complemented by executives with relevant experience running a successful African airline, or running an airline with significant operations in Africa...
 
johns624
Posts: 2811
Joined: Mon Jul 07, 2008 11:09 pm

Re: Green Africa Airways to order 100 B737 MAX8

Mon Dec 31, 2018 1:43 am

With the backlog of Boeing orders, what are they going to fly for the years until their new planes are delivered?
 
User avatar
eastafspot
Topic Author
Posts: 1685
Joined: Tue Jan 29, 2008 5:19 pm

Re: Green Africa Airways to order 100 B737 MAX8

Mon Jan 07, 2019 3:45 pm

When can they expect the delivery of the first aircaft?
Fly with Air Burundi, Air Tanzania, Golden Wings Aviation, Kenya Airways, RwandAir and Uganda Airlines...Jumuiya ya Afrika mashariki !

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