New Malawi carrier to be branded BA

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Malawi's new flag carrier plans to operate as a British Airways franchise when it launches services next year with a single Boeing 737-300, according to controlling shareholder Comair.

South African carrier Comair, which already operates a BA franchise on domestic and regional routes, was selected earlier this year by the Malawi government for a new joint airline project in the small African country. Comair joint CEO Gidon Novick says the deal should be concluded by year-end and the new airline will be called Comair Malawi.

Speaking today to ATI sister publication Airline Business, Novick reveals Comair Malawi will carry the BA brand and initially operate one 737-300. While Comair will only own 49% of the new carrier, with a majority 51% being retained by the government, Novick says Comair will have control.

"We'll have management control. We'll run it," Novick says.

He adds that while Comair has not secured final approval from BA to operate the new Malawi carrier as a franchise he says BA has "pretty much" approved the arrangement and it is not really an issue because the new airline will essentially be an extension of Comair's South African franchise.

"It will be a branch outstation of our business. We won't have any infrastructure there," Novick says.

The Malawi government has long looked at bringing in a foreign airline investor and talks with Comair began over one year ago. The government initially said it was pursuing privatisation for flag carrier Air Malawi but over the last month details began to emerge that instead a new airline will be established with Comair.

Novick confirms the project involves establishing a new flag carrier with a Malawian operating certificate and Air Malawi will cease to exist. He says while there is some political opposition to the project because it will result in Air Malawi's closure, this is by far the best commercial option for the government.

"It will be a global brand with first world customer service, safety and infrastructure," Novick says. "It will serve Malawi in a much better and more profitable way."

He adds Comair Malawi will be viable because it will "really feed off our infrastructure" and operate the same aircraft type as Comair's South African operation. Comair Malawi will start with one Boeing 737-300 operating on the domestic route between Lilongwe and Blantyre as well as international services to Johannesburg.

Tickets will be sold in South Africa under the existing BA sales channel and Comair will also set up a new BA sales channel in Malawi to support local sales. While Comair South Africa now operates to a handful of African countries under the BA name, it currently does not have rights to serve Malawi.

Currently Johannesburg-Lilongwe and Johannesburg-Blantyre are only served by Air Malawi and Comair archrival South African Airways (SAA). According to Innovata, SAA operates five weekly flights to Lilongwe and two weekly flights to Blantyre. Air Malawi also operates one daily flight to Johannesburg, with five weekly flights on a Blantyre-Lilongwe-Johannesburg routing and two weekly flights on a Lilongwe-Blantyre-Johannesburg routing.

Novick says Comair Malawi will not take over Air Malawi's other routes, which according to Innovata include Lusaka in Zambia, Nairobi in Kenya and Dar es Salam in Tanzania.

According to ATI sister product ACAS, Air Malawi now operates one 737-300, one 737-500 and one ATR 42, all of which are owned by the carrier. Novick, however, says Air Malawi's current network is essentially a one-aircraft operation and a turboprop is not needed even for domestic services.

"It's a small market," he says. "We got to take baby steps."

Comair, which along with operating a BA franchise in South Africa also offers low-cost services through its Kulula unit, now has a fleet of 20 Boeing 737-300/400s. Novick says Comair also has six 737-200s, which he says are currently used as spares but may be "fired up to start a few local routes".

He says Comair Malawi has not yet sourced its 737-300 but it will not come from Comair's existing fleet. He adds the new carrier has time to secure an aircraft because it will take about six months to launch after the deal is concluded.

Novick says Comair hopes to complete the deal by the end of the year but warns these types of contracts are always prone to delays and "I won't hold my breadth".

Novick acknowledges establishing an airline in Malawi is a risk for Comair as the publicly traded South African company will not have majority ownership. But he says it is a risk Comair is willing to take because Malawi is a stable country with a stable government. "It's been stable for quite a while," he says.

Comair Malawi also fits in with Comair's overall strategy to boost its presence in Africa through equity deals. Novick says Comair earlier this year opted against continuing to pursue a deal with the Botswana government because the government essentially was only looking to award a management contract for Air Botswana.

"It would have been too much of a diversion for us," he says. "We don't want to be just consultants. We want to have an asset."

He adds the structure of the Malawi deal was much more attractive to Comair than the Air Botswana tender and Comair's Malawi project "will be a good case study for other African governments".

Novick says Comair has "a lot of feelers" out with other African governments but it is not currently participating in any other airline tenders or projects. "It takes time," he says.