Malawi Airlines has lost money many times; it has had to be bailed out many times. Even under majority ownership of another carrier, it still lost money. Who is to blame for this mess? Nobody. Malawi Airlines keeps losing money because it has to. The current move by government to bail out the airline, one more time, will simply result in wastage of taxpayers’ resources.
Malawi Airline is not the only national carrier to lose money. National airlines have generally become a thing of the past. There was a time when almost all nations had “flag carriers”. A lot of these national airlines became bankrupt; the wise nations privatized theirs before going down.
The airline industry has changed a lot over the past few decades. Cost of maintenance have become high even as passengers demand higher quality of services and lower prices. To ensure these lower prices, airlines have to ferry more people to longer distances every day, and also minimize ground time. To be profitable, a plane generally has to spend most of its time in the skies. Even with all these qualities met, an airline is still not guaranteed to remain competitive.
If you list the largest national airlines in the world, you will notice something very fascinating. The top six airlines are Turkish Airlines (Turkey), Air France (France), British Airways (United Kingdom), Ethiopia Airlines (Ethiopia), Emirates (United Arab Emirates) and Qatar Airlines (Qatar).
Did notice anything about this list?
I ask because most Malawian politicians seem to believe that, if managed properly, Malawi Airlines will become just as big and prosperous, as Ethiopian Airlines. This is more like saying that when Prince Harry grows up, he will become an heir to the British throne just like Prince William.
If you look at the list of the largest national airlines above, you will notice that British Airways and Air France are the two odd ones out. The rest are all in about the same location on the planet. Perhaps one can argue that Europe is not too far from the Middle East. And that’s the point.
It turns out that given globalization and interconnectivity, airlines located in places that makes it easy for them to serve the whole world have a very unfair advantage over the others. Ethiopia, Qatar, Turkey and the UAE are all in the Middle East, the proverbial Center of the World, where they can easily get a lot of customers from one part of the world to another and vice versa. Ethiopian Airlines can easily ferry passengers from Africa to Europe or America and vice versa at a much lower cost than an airline located in, say, Lilongwe. A Malawian or Zambian Airline is at a disadvantage right from the beginning. Location, location, location!
Of course, there are other models that can help an airline make money. But they are not easy. Southwest Airlines, for instance, has become prosperous by hopping from one city to another carrying passengers with little to no luggage thereby reducing ground time. The seating plan is not even assigned. Passengers just line up and get into the plane as soon as it arrives. Again, the key here is to use as less resources on the ground as possible and stay in the air as much as possible ferrying passengers. None of any workable airline models suit Malawi Airlines. Malawi Airlines will keep on losing money regardless of management and investment. Two great HBR articles, “Emirates Airline: Connecting the Unconnected” by Juan Alcacer and John Clayton, and “Southwest Airlines” by Vijay Govindarajan and Julie Lang, give valuable insight into the airline industry.
When you talk to Malawian politicians, most think we need to keep the airline for the sake of national pride. It is a bad idea to put our national pride in giant money sinkholes. Our priorities on national pride tend to be misplaced and not aligned with our strength. Take a look at the national sports teams, for instance.
We have men’s national football team that never wins. They almost always get eliminated in preliminary rounds. Yet, year after year, we pump a lot of money into football hoping it will raise the national flag for the sake of the national pride.
On the other hand, we have a women’s netball team that is ranked in the top 10 of the world’s best national netball teams. Our netball team is poorly funded, does not have a world class coaching team, and does not have an academy to train upcoming players. Yet, they win big most of the time.
Why don’t we take all the money from the jokers who never win and put it in the netball team that is obviously naturally talented? If we do that, before long, Malawi will be winning the netball world cup consistently. That is how you fund projects for national pride.
A lot of things happening in Malawi these days are quite interesting. By the way, have you seen the report on the civil service? You did not. Because it has been impounded. A few months ago, the president tasked his vice to conduct a civil service review following the embezzlement and misuse of coronavirus funds.
The commission finally handed the report to the president last week. Initially, the handover ceremony was heavily publicized, but at the last minute, it was decided that the report will be handed to the president out of the public’s view. We do not know the reason for the secrecy.
Thanks to social media we have seen at least one page from the report as they were presenting it to the president. The title of the page is “EXODUS” (I am not making this up!). The last paragraph of the page reads,
“Ordinarily on Valentine’s day people exchange gifts in the form of flowers, chocolates and dinner dates but we got this gift for the Love of country.”
Ladies and gentlemen, these philosophical words and page are part of the report prepared on your behalf for His Excellent President of the Republic!
Is anybody serious anymore?
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