Summary Air Sénégal's over-ambitious growth led to financial troubles, forcing cuts in its network, including flights to New York JFK. The carrier's heavy debts have resulted in its aircraft being repossessed, highlighting its financial instability. Despite challenges, efforts are being made to reevaluate the airline's operations and implement a rescue plan to revamp its strategy.
Heavily indebted, with poor loads and overly ambitious growth, Air Sénégal's problems have blown up in its face. It recently emerged that the carrier would be cutting its flights to New York JFK, meaning it is leaving the United States indefinitely. Once planning to become a shining example of West African airlines with connections to Europe and North America using modern aircraft, it has now announced a number of network cuts that set it back close to square one.
The overall downsizing of Air Sénégal is unfortunate, especially given its wonderful livery and modern aircraft. Among them are the Airbus A330neo and A320ceos. Together with Romuald Ngueyap, Editor-in-Chief at NewsAero , we take a look at the specific reasons for Air Sénégal’s New York suspension, as well as the carrier’s overall operation and reasons for failure.
Network trimming The carrier’s twice-weekly flight between Dakar (DSS) and New York JFK Airport (JFK) is being suspended as of September 15, 2024, according to Aeroroutes . The following day, the aircraft will operate Air Sénégal’s last flight from the US. In addition, the airline is removing two of its routes within Africa.
They are as follows: Route Aircraft Frequencies Last flight Dakar-Cotonou-Libreville-Douala A319 1 weekly September 14 Dakar-Cotonou- Douala-Libreville A319 1 weekly September 19 Dakar to New York JFK As we reported yesterday, Air Sénégal is pulling out of New York meaning only one Airbus A340 operator will remain: Lufthansa . The Senegalese airline wet-leased an aircraft from Hi Fly to supply its services to New York, as it lacks its own audit from the US Federal Aviation Administration (FAA). We had noted yesterday that there were a few important reasons for the route’s unviability, including: 16.
5 hours on the ground: As Air Sénégal puts an emphasis on connections, its flight remains at the costly US airport for nearly 17 hours to time it correctly. No anglophone connections: JFK’s major markets in West Africa include Lagos (Nigeria) and Accra (Ghana), neither of which Air Sénégal serves. No codeshare agreement in the US: If the carrier wanted to compete more effectively against Delta Air Lines which also operates on the JFK-DSS sector, interline agreements in North America would allow it to increase loads.
Poor load factors: Load factor on average was just 64% between January 2023 and May 2024, per US Department of Transportation T-100 data. But the problems at Air Sénégal go beyond this singular route. The decision to both launch and maintain such a service is a testament to the carrier’s continued mismanagement.
When asked whether the United States is simply an unviable market for African airlines, Ngueyap said: “We can’t say it’s a bad choice. Currently, at least five airlines including EgyptAir, Ethiopian Airlines, Kenya Airways, Royal Air Maroc and Air Sénégal, serve the US. Ethiopian Airlines for instance continues to expand its American network year-after-year.
Concerning Air Sénégal specifically, its under-performance in the US could be attributed to high operating costs and heavy competition. Currently, it operates this route twice a week with a four-engined plane leased in an ACMI contract, the A340-300 from Hi-Fly. On the other hand, Delta Air Lines flies this same route three times a week with a Boeing 767.
” Heavy debt Air Sénégal is struggling significantly in terms of its finances. The carrier was created in 2016 and aimed to avoid the mistakes of its short-lived predecessor and ensure connectivity to and from Senegal, as well as the broader West Africa region. Ngueyap comments: “The challenges facing Air Sénégal today are the result of several factors, both endogenous and exogenous.
Among the most questionable decisions was the acquisition of new A330 aircraft at the company's start-up in 2017, which put a heavy strain on its cash position. This strategy seemed premature for a young company, and more akin to a political decision than a well-thought-out profitability plan. It is among the USA's least-seen international operators.
The rapid expansion of the network at the company's launch, with routes to New York and Baltimore (eventually closed), as well as five routes in Europe, also contributed to the difficulties encountered. Without a solid financial base and without consolidating regional routes, these choices proved too ambitious for such a young company.” Ngueyap also notes managerial instability as a deep concern.
Over seven years, the carrier has had five directors. Only one European destination will remain. Aircraft repossessed? It is now struggling significantly.
A rapid growth strategy based on modern aircraft orders has meant that debt has accumulated to a reported 100 billion CFA francs ($170 million). A legal proceeding initiated by Carlyle Aviation in the United States says Air Sénégal owes approximately $10 million. According to Africa Intelligence , the court issued an order to ground four of the airline’s planes.
This includes two Airbus A319s and two A321s, roughly half of the carrier’s fleet. Ngueyap says: “Air Sénégal mirrors the situation of many of Africa's state-owned airlines. It is over-indebted to both internal and external suppliers ($10 million claimed by its main lessor, who leases two A319s and two A321s), and is making significant losses.
Last year, the company announced monthly losses of between 9 and 10.5 million euros. It is a heavy burden on the public purse.
” The African aviation environment is vastly different to Europe and North America, contributing to overall higher operating costs. “The operating environment for airlines in Africa, and in French-speaking Africa in particular, is very difficult. Between high airport taxes, ever-rising fuel prices, protectionism and the poor integration of African economic zones, Air Sénégal is faced with low load factors and challenges of access to spare parts, resulting in rising operating costs without revenues to keep pace, which explains the persistent deficit.
” What’s next for the company? Is this the end for Air Sénégal? In short, no. There are efforts being made to both maintain and reevaluate the carrier. In a recent interview with the BBC , the Senegalese Minister for Infrastructure, Road and Air Transport, El Malick Ndiaye said that the airline was one of his “priorities, of course, as the airline is linked to the image of the country.
” He continued: “I found that Air Senegal was not in good condition, but we are currently working on a rescue plan to review everything, including management, and also, to change the strategy. We need a new strategy and a new business plan to get it back on its feet.” Ngueyap believes that ambitious measures need to be taken in order get the national airline back on track.
“Since the arrival of the new CEO, Tidiane Ndiaye, a number of changes have already been announced, such as the discontinuation of the route to New York from September and the suspension of three African routes. It has also put on hold the project to sell two ATR72s initiated by his predecessors. In my opinion, the company needs to go even further, with the support of the public authorities.
In addition to a clear audit of its strengths and weaknesses, Air Sénégal needs a restructuring of its debt, a major recapitalization, a strategic refocusing of its network and a renegotiation of its aircraft leasing contracts and other agreements with external service providers." Get all the latest aviation news right here on Simple Flying It is essential to have a leader capable of taking tough decisions, such as revising the wage bill, to try and turn the situation around. It is also crucial that the political authorities grant the new management team greater decision-making flexibility.
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