ONDA, Morocco's airport authority continues to be under fire for its failure to fix the mess caused by the issue of handling companies in Morocco. ONDA is using only two handling companies in all the country's airports and one of them belongs Royal Air Maroc. Morocco News Board reflected - "Are these practices by ONDA consist of a backdoor monopoly that favors Royal Air Maroc? ONDA has issued a statement that deny forcing the airline's choice of handling companies. These statements need to be taken with a grain of salt when one is aware of the cozy relationships between ONDA and RAM."
When ONDA announced the new handling arrangements and increased the price structure, reaction was swift. Ryanair announced the cancellation of eight weekly flights to Nador, six weekly flights to Fez, eight weekly flights to Marrakech, four weekly flights to Tangier, and the closure of its operations at Oujda Airport.
Ryanair reported that ONDA had forced the company to work with a new handling company, causing an increase in the airline’s charges. The stand-off between the low cost airlines and ONDA has still not been resolved.
It seems woolly thinking to expect increased handling charges to produce more revenue if the actual numbers of flights and tourists decreases. Hopefully commonsense will eventually prevail.
Questions remain as to Royal Air Maroc's long-term plans. Has the ONDA handling problem been a mistake, or part of a much bigger strategy?
ANALYSIS
Royal Air Maroc’s return to profitability following the global economic downturn has been matched by the expansion of a number of Moroccan airports which have increased their handling costs. This is beginning to challenge the growth of low cost carriers and their future operations in the country, reports Oxford Business Group (OBG).
Over the last- 10 years Morocco has completed two strategic investment plans in its transport sector from 2003-2007 with an investment of 58 billion dirhams (5.18 billion euros and the other from 2008-2012 with some 120 billion dirhams (10.73 billion euros).
These investment have funded the expansion of several air terminals including Casablanca Terminal 1 which is expected to cost 173 million euros with a capacity on completion of 8 million passengers . A third terminal is planned for Marrakech – Menara International Airport and a second terminal at Fez-Saiss Airport.
Extensions completed at airports in Oujda, Dakhla and Rabat. The new terminal at Rabat-Salé Airport, for example, which opened in January 2012, cost approximately Dh280m (€25.38m). The airport can now handle 1.5m passengers annually, up from 500,000 in 2008. In June, Jetairfly, a Belgium-based airline, launched twice-weekly flights between the Moroccan capital and Brussels.
The liberalisation of the sector in 2004 and the signing of the Open Skies policy in 2006 has seen 45 airlines operating in the country. This allowed international and low cost airlines to compete in the market. Flight costs dropped following the arrival of several low-cost carriers, such as Air Arabia Maroc and Jet4you, while passenger numbers increased. RAM experienced 2 years of rising fuel prices, increased competion and a fall in demand due to the global economic downturn. RAM faced the competition by developing Casablanca into an international transport hub with increased links to Europe, Africa, North America and the Middle East.
Following the closure of Atlas Blue, its own low cost carrier, in 2010 RAM embarked on a period of restructuring and the cutting of unprofitable routes. The Moroccan government then provided RAM with Dh1.6bn (€145.03m) to help the company achieve profitability.
RAM has since been highly successful and has maintained its connections to neighbouring African countries and Europe, cut its workforce by 35% and reduced its fleet to 43 aircraft, from 53 in 2010. As a result, by June 2012, RAM had managed to exceed the 5.7% turnover target imposed by the government. In April 2012, RAM announced that it may seek a strategic partner to help further boost its business profitability.
The Moroccan Airports Authority ONDA has worked to attract more international airlines to Morocco and increase airport capacity to 36 million passengers a year. It has increased its handing charges which has led low cost airlines Ryanair and Easy Jet to announce the cancellation of routes to Morocco. Ryanair is cancelling 34 routes to Morocco including Marrakech in october which it says will result in the loss of 255,000 passengers. EasyJet is cancelling its Madrid Morocco flights but there have been no further announcement of route cancellations as yet.
The Oxford Business Group is in agreement with almost every analyst and commentator that if other low cost carries also cancel routes it could have a serious effect on tourist locations in the country, especially Marrakech, where half of the 232 flights carried out weekly are operated by low-cost airlines. This will impact on tourism revenues.
This information is provided by Oxford Business Group the acclaimed global publishing, research and consultancy firm.’: Oxford Business Group
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1 comment:
I agee with the analysis. I view the situation in quite simplistic terms. If they are building additional terminals at the airports, they need planes to fly to them! These cannot simply be filled with Royal Air Maroc planes, therefore a compromise has to be reached with the low cost carriers, otherwise these new terminals will be white elephants!
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