15 August 2001

Africa: Air Afrique is Dead, Long Live Air Afrique

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Washington, DC — After more than ten hours of talks in Brazzaville, the eleven heads of state came out of their meeting to announce the verdict to reporters and Air Afrique trade unionists who were waiting in suspense.

"We had to make a choice," said President Laurent Gbagbo of Côte d'Ivoire, "We had to talk, we had to see clearly, so that our multi-national does not die. Air Afrique will not die".

The summit adopted a rescue plan, originally proposed by the French government, which will create a new company to keep Air Afrique in business. the new company, to be made operational in three months, will be legally separate from the old one and financed by the French airline, Air France, to the tune of US$70 million, according to a statement made by Senegal's President Abdoulaye Wade, following the summit. The French government owns a majority stake in Air France.

That will put 35% of Air Afrique's shares into French hands, while African governments will keep 28%. Of the remainder, 30% will be controlled by African private investors, and the company's own staff will own 7%.

Abdoulaye Wade also said that all Air Afrique's 4,200 current staff would be transferred to the new company and that another five hundred new employees would be hired. The only exceptions, said Wade, would be those who choose to take voluntary or early retirement.

But Air France later issued a statement in which it said that keeping all current staff would be out of the question and that some jobs would be lost.

A spokesman for the Air Afrique workers' union nonetheless praised the settlement saying it would enable the African carrier to keep flying while getting rid of its debts. The official also said workers' benefits would be worked out in future negotiations with the new company.

The adoption of the French plan means that the mandate of Jeffrey Erickson, Air Afrique's current chief executive, will not be renewed when it expires on 31 August. Erickson, appointed by the World Bank to restructure the company, wanted to cut 2,000 jobs. But under pressure from their various constituencies, the eleven heads of state rejected that plan.

Air Afrique, which was created in 1961 to be an instrument of French-African copperation and a symbol of the newly independent continent, began to run into financial difficulty in the early 1990's. It has since faced charges of gross mismanagement and accumulated debts estimated at US$417m.

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