Published November 11, 2013
Some 15 foreign carriers are considering pulling out of Sudan as a result of the horn of Africa country’s Central Bank’s restrictions on repatriation of their profits.
The central bank undertook these measures to battle chronic Forex shortages that followed the secession of the oil-rich south in July 2011.
The carriers also complain about the continuous fluctuation in the exchange rate and the increase in fuel prices which eats into its profit.
Marsland Aviation, a major Sudanese airline serving South Sudan and the Middle East suspended operations on November 10, 2013, blaming American sanctions, as a document confirmed German carrier Lufthansa will also end flights to Sudan.
The private airline, founded in 2001 by Rashid Azim Ortashi, flew to the South Sudanese capital Juba, two destinations in Sudan’s Darfur region as well as Jeddah and Cairo.
Announcing the suspension, Ortashi told AFP, “We are really begging, begging the USA to lift the sanctions on the private companies in Sudan. They are dying.”
Al-Khartoum daily newspaper reports that nine local carriers have stopped operations due to competition by foreign ones which forced them out of business.
The Deputy Secretary General of the Chamber of the National Air Transport, Omar Ali Abdul-Magid, said that national companies controlled more than 60%-70% of market share but that this had have dropped to less than 14% as more foreign carriers started operating in the country over the years.
Abdul-Magid said that this created added pressure on Sudan Central Bank which is unable to allow all these carriers to send their profits abroad leading them to consider pulling out.
He warned that this non-conducive environment which hit all carriers threatens to limit options available to Sudanese passengers.
Ortashi said that he previously warned the government on the bleak outlook for airline industry in Sudan but without response.
Since the secession of South Sudan a large number of United Nations and aid groups have left Sudan which negatively impacted these carriers.
While KLM stopped flying to Sudan due to weak demand in March 2013, Germany’s Lufthansa, the last European airline with direct flights to Sudan, will end its service between Frankfurt and Khartoum on January 19, 2014.
“Lufthansa offers its customers an extensive worldwide network and regularly monitors its profitability,” says the letter to clients dated October 22 and signed by Hartmut Volz, the airline’s Sudan general manager.
“In this context it was decided to suspend services from Frankfurt to Khartoum.”
Ortashi said foreign carriers were selling tickets in Sudanese pounds but had trouble converting their proceeds into US dollars for repatriation because of a shortage of hard currency in Sudan, which was the main reason they were pulling out of the market.
Turkish Airlines as well as some African and Middle Eastern carriers still fly to Sudan.
For Marsland, American economic sanctions meant its three leased Boeing 737 jets could not be registered in Sudan but had to be listed in Georgia and Gambia at double the cost, Ortashi said.
“It’s not economical at all,” Ortashi said, noting that his company had suffered losses of around US$3.5 million in six months.
The government’s September 2013 decision to slash fuel subsidies added to the problem, he said.
Retail prices for gasoline and diesel rose more than 60%, sparking the worst urban unrest of President Omar al-Bashir’s 24 years in power. Dozens of people were killed.
Ortashi said Marsland switched from Russian aircraft to American Boeings in 2009 because of their better fuel economy and reliability.
“We thought we could solve the problem of spare parts and maintenance, but we found it really difficult,” he said.
Ortashi said that Marsland’s 260 local employees will now lose their jobs unless the company can obtain emergency funding to allow it to stay afloat.
The US imposed the trade embargo in 1997 over Sudan’s support for terrorism, efforts to destabilise neighbouring governments and human rights violations.
Passengers flying to Juba may now have to go through Addis Ababa in Ethiopia via Ethiopian Airline or through Nairobi in Kenya via Kenya Airways.
This comes as Sudan and South Sudan improve ties and seek to boost economic cooperation.
Sudan’s economy has been plagued by rising inflation, a shortage of hard currency, and a weakening Sudanese pound since South Sudan separated in 2011, taking with it most of Sudan’s oil production.
Ortashi said Marsland was the first private airline in Sudan to fly jet aircraft and was the biggest national carrier last year. It carried 300,000 passengers per year with its planes 90 percent full, he said.