Ethiopian Airlines Limited, a strategic equity partner in Malawian Airlines Limited with 49 percent shareholding, will have to get a licence from the Department of Civil Aviation (DCA) and certification from International Air Transport Association (Iata) before flights start.
The company, which has made an initial investment of $20 million (K6.9 billion) in the new airline and has started recruiting new staff, will have to have its staff and plan of action reviewed by DCA and Iata, according to Jimmy Lipunga, chief executive officer of Public Private Partnership Commission (PPPC), a government agency facilitating the deal.
“The regulatory [process] is the main issue. Recruitment has started and once people are in place, the DCA and Iata will review staffing and the plan of operation,” he said in telephone interview from Lilongwe after the Malawi Government and Ethiopian Airlines officials signed the shareholders agreement.
According to the agreement, the new company will employ as many Malawians as possible, but that strategic positions will have to go to the strategic partner.
Lipunga said the aircraft that Ethiopian Airlines is bringing, Boeing 737 300 with 130 seats and Bombardier Q400 with 78 seats, will also have to be reviewed.
At the signing ceremony at Kamuzu International Airport (KIA) in the capital, Lilongwe, the Malawi Government and Ethiopian Airlines were represented by Deputy Minister of Finance Cornelius Mwalwanda and chief executive officer Tewolde Gebremariam respectively.
Gebremariam told The Daily Times that a ‘rigorous process’ will have to be undertaken before the new airline starts its operations because the industry is highly regulated.
“The financial and technical capacity is there and we have aircrafts and technical expertise ready, but the regulatory process is rigorous and if we do not follow all the procedures, countries will not allow us to fly in their destinations,” he said.
Mwalwanda said government is ready with resources to have the airline started the soonest.
“We are convinced that the partnership will prove beneficial to both the government and Ethiopian Airlines. We will provide the needed support to ensure flight operations commence as soon as possible,” he said.
The Malawi Government has a 20 percent stake and is expected to invest about $10.2 million (K3.5 billion) to be disbursed in two tranches, the first being $4 million (K1.3 billion), and rest at a later stage, should Malawi individuals and institutions expected to hold the remaining 31 percent stake in the next 12 months fail to come up with the offer.
The new airline, whose headquarters will be in Lilongwe preferably within KIA premises, will not need the majority of assets owned by the liquidated Air Malawi, but will likely need maintenance facilities and a hangar at Chileka Airport, according to PPPC.
The new airline will operate regional flights to Johannesburg (South Africa), Harare (Zimbabwe), Lusaka (Zambia), Dar es Salaam (Tanzania) and Luanda (Angola) with domestic flights in Lilongwe, Blantyre, Mzuzu and Karonga.
Later, it is expected to expand flights to Nairobi, Kenya and Mozambique in the second year of operation and in the medium term, it will be working towards intercontinental flights to Sao Paulo, Brazil.