New Cameroon national carrier Camair-Co fails to reach first year targets, but continues to grow

Camair-Co will have a monopoly on the Douala-Kinshasa route, but will compete with Air Nigeria (formerly Virgin Nigeria Airways) on the Douala-Lagos route. Both routes will be served with Boeing 737-700 equipment seating 12 in business and 116 in economy.

The carrier operates a fleet of one owned 767-300ER and two leased 737-700s from US-based Aviation Capital Group.

Finding its feet

Camair-Co was set up in 2006, although it was not until early 2011 that it managed to get into the air. The carrier is the successor to Cameroonian national carrier, Cameroon Airlines, which folded in 2008 after an unsuccessful privatisation process.

The Cameroon Government invested XOF22 billion (USD44.5 million) in the airline in 2010. Camair-Co has hired 155 staff that previously worked at Cameroon Airlines. Its total workforce was just under 400 at the end of 2011.

Camair-Co has imported much of its executive management from Europe. A Dutchman, Alex van Elk, fills the role of CEO. Mr van Elk already has experience in airline operations in Africa, having previously held the roll of managing director of Nigeria's Arik Air and the role of managing director of Bi-Courtney Aviation Services in Nigeria.

Early operations not meeting expectations

Early operations were not a complete success. In May-2011 Mr van Elk noted that Camair-Co's first few months had not been profitable, with flights operating at load factors of just 30%. Technical issues with the carrier's sole 767-300ER led to some flight delays and cancellations.

The carrier's early destinations included Paris Charles De Gaulle, operating from Douala via Yaounde, the capital. The carrier also had domestic services to Garoua and Maroua. Services to N'djamena in Chad followed in Apr-2011.

By Jul-2011, the carrier was able to report its first "full" flight, although load factors averaged just over 45% during the carrier's first six months of operations. By the end of 2011, the carrier was achieving 60-70% load factors on Douala-Yaounde, its most heavily trafficked route. The CEO has put the carrier's breakeven load factor at around 66%.

Camair-Co domestic destinations (seats and frequency): 23-Apr-2012 to 29-Apr-2012

Origin	Destination	Seats	Frequency
Douala	Yaounde	5192	38
Yaounde	Garoua	1280	10
Yaounde	Salak	1024	8

Source: CAPA - Centre for Aviation

Expanding regional network

Since its launch, the carrier has progressively expanded its operations in Western and Central Africa, adding routes to Bangui, Malabo, Cotonou, Brazzaville and Libreville. The airline uses its two leased 737-700s to serve regional African and domestic destinations while its 767-300ER serves Paris CDG.

Camair-Co international destinations (seats and frequency): 23-Apr-2012 to 29-Apr-2012

Origin	Destination	Seats	Frequency
Douala	Libreville	1024	8
Yaounde	Paris Charles De Gaulle	840	6
Douala	Paris Charles De Gaulle	840	6
Douala	Malabo	768	4
Douala	Brazzaville	768	4
Douala	Cotonou	768	4
Yaounde	Ndjamena	265	2
Douala	Ndjamena	256	2
Yaounde	Lyon	128	1

Source: CAPA - Centre for Aviation

The airline is reportedly looking at introducing a third aircraft type to its fleet mix, possibly regional jets or turboprops to complement its larger aircraft.

Earlier this year, the airline expended its operations to France, launching a Douala-Yaounde-Lyon service on 02-Feb-2012. France is an important destination for the carrier. The country is Cameroon's single largest trading partner, having been a French colony between 1918 and 1960.

Air France operates into Cameroon from Paris CDG to Yaounde and Douala. Brussels Airlines also provides links to Europe.

2011 objectives not met but pressing on with growth

Camair's initial objective was to handle 400,000 passengers during 2011 and expand its network to 13 destinations, an objective that fell short. Current destinations including its hub number 10 (Kinshasa and Lagos will bring the number to 12) while traffic was well below expectations. Although no full year data is available, the carrier flew 110,000 passengers over its first eight months of operations, with most traffic concentrated in the latter half as traffic accelerated following fleet expansion to three aircraft and increasing public confidence.

Passenger and cargo revenue in the first eight months was reportedly XOF15 billion (USD32.2 million). Losses in the first year of operations were approximately XOF9 billion (USD18.1 million), although losses had been anticipated for the first three to four years of operations.

The carrier has signed a number of contracts with international partners to outsource non-core operations. The airline has signed agreements with Lufthansa Technick for MRO and Lufthansa Systems for IT solutions, with Lufthansa Consulting being involved in planning and management support for the carrier since its launch. The airline has also outsourced catering and onboard services to Servair and doual'air.

Camair-Co aims to be profitable by 2014, although it will require considerably greater size and scale before that is a realistic target. It faces only moderate competition in Cameroon, and the Eastern and Central African markets are underserved, providing plenty of space for growth.

Cameroon scheduled airline capacity (seats per week): 23-Apr-2012 to 29-Apr-2012

Source: CAPA - Centre for Aviation

The carrier is looking to add more long-haul routes in the future, including services to Dubai and China, to capture the burgeoning business traffic. It is also looking for a strategic partner and investor, a move that would provide both financial backing and network support as it continues to grow.