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TRANSPORT-GABON: National Airline In Danger Of Collapsing

Antoine Lawson

LIBREVILLE, Apr 2 1999 (IPS) - In spite of effort by management to keep it afloat, Air Gabon, the country’s national airline, is in danger of collapsing.

“The company is in danger and may have to suspend operations to avoid going bankrupt”, says Rene Morvan, General Director of Air Gabon.

This is not the first brush Air Gabon has had with a shutdown. It is running a 37 billion CFA franc deficit, and in the past several years has gone through an austere reorganisation.

One US Dollar is equal to 566.42 CFA francs.

The company has also been one of the large Gabonese companies that has gone private.

The global economy, unpaid government debt, bad management and the fall of the dollar have all contributed to the company’s downturn.

“The Gabonese airline is struggling just as many international airlines are in this globalised economy. This situation is mainly due to overall poor management of the company”, a former member of the company’s board of directors charges.

“Air Gabon’s numbers have continued to go down. The government, its main shareholder, had been helping to avoid liquidation but then stopped its subsidies”, one of the airline’s directors says.

Air Gabon’s stock, worth 6.5 billion CFA francs, is held 80 percent by the government and 20 percent by a consortium consisting of Air France and a French financial institution, the Caisse des Depots.

Air Gabon was created in 1977 when economic conditions were good. It went through an unamicable split from the multinational Air Afrique.

Today, however, things are very bad.

Only four planes remain: a Boeing 747, a Boeing 767, a Boeing 737 and a Boeing 727. Two Fokker 28s were repossessed by creditors.

Air Gabon has not been able to replace its fleet. “Everything has rained down at once, plus most of our fleet is 22 years old”, Morvan explains, adding that new planes will be leased little by little through the year 2001.

“Replacing the fleet is now a problem because it requires a lot of money. But it seems justifiable because there has been an explosion in traffic in certain sectors”, Jacob Cabinda, Air Gabon’s commercial director, says.

The problems have been long-standing. From 1977 to 1980 when the company was just starting out, a 9.449 billion CFA francs deficit was accumulated, more than four times its capital assets of 2 billion CFA francs. In 1994, the deficit had reached 16,345 billion CFA francs.

The company was hoping to get back into steady business by 1996 after having reined in the deficit to only 1.643 billion CFA francs in 1995.

But the forecast for 1996 and 1997 proved false. The deficit continued to climb until it reached its present level of 37 billion CFA francs.

“In 1999, the outlook is bad. After 38 years of independence, bad planning has led Air Gabon and several other nationalised or quasi-public institutions to an economic impasse”, says economist Gerard Mboumba.

According to Morvan, the problems are made even worse by the structural adjustment programme (SAP) that the Bretton Woods institutions have imposed on Gabon. As a result, the government saw fit to withdraw the subsidy which helped the airline balance its books.

Jerome Ngoua Bekale, Minister of Transport in 1993, is critical of Air France, one of the shareholders, which usurped some of Air Gabon’s highly paid top management jobs.

Ngoua complains that “job qualifications for Air Gabon jobs abroad have never been open to sufficient public scrutiny”.

In spite of its numerous difficulties, Air Gabon has continued to try and apply the 1995 restructuring plan, imposed by the International Monetary Fund (IMF) and the World Bank, to the company.

“The general directorate has initiated a policy intended to pare down an overstuffed work force and encourage voluntary separations. In addition, many public servants who had been incorporated into the company structure will be encouraged to return to their former agencies”, Cabinda explains.

Out of 1,900 company employees, 900 have already been laid off while the downsizing continues. According to the Minister of Transport, Idriss Ngari, efforts will be made to place those who have lost their jobs.

The Gabonese government, Air Gabon’s biggest customer, owes the company 11 billion CFA francs and began two years ago to pay off its debt. A plan to completely pay off the debt within two or three years is on the drawing board, according to one highly- placed Ministry of Finance employee.

In addition, the company is trying to get back on its feet by increasing its number of destinations. New cities served include Johannesburg, Nairobi, Sao Tome (Sao Tome and Principe), and Malabo in Equatorial Guinea.

The latest addition has been the Libreville-Dubai route.

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