ROS s O: paper, Cape Verde would seem tobe oO deal place to invest na national The volcanic archipelago consists of 10islands located 57okm of the west African cost, ‘making ir ave! the only viable means of getting From one part of thecountry to another ‘Cape Verde's picturesque beaches alsoserve as magnet for foreign toursts—halfamilion of ‘whom visit the island nation each yer, typically takinga shor fight from western Europe Travel and tourism currentiyaccounts for 139% of goss ‘domestic product (GDP) and should prow its share wo nearly 19% by 2025, according tothe ‘World Travel & Tourism Counc Throw inthe fat that most Cape Verdeans live abroad - guarantesinga steady low of visiting Friends and rlatives'(VFR) watfie~and itis hard to imagine TACY, the country's ag-carir, performing bad Yetit consistently cloes so, racking up liabilities .6F 10 billion eseudos ($101 milion) to dat For outgoing chairman and ciel executive, Joao Pereira da Sve, whose board was dismissed in Apri folowing change of government. unlocking the Fal potential of TAC bas been thankless and ultimately fruitless - endeavour. “We have taken steps [torehabiltate the airline], We have been restructuring from 2012 tonow,”the former economy minister said shortly before his four-year stint came to an end, Route development dominated thelatr stage of thestrategy withsxcestinationsjoinngthe networkin 2015.DaSivaultmetely hoped tomone than double TACV' five strongfeet, but his ng. term pl file to addres he shore loses, ‘Nothing wasdone with respect tothe sizea the headoouy,” he admit ofhis time in office. “The costof human resoures sary high a TACY, fri to cut the workforce by a quater belatedly announcedin the final days ofhis enue = were suspended when the Movement for ‘Jone Pe de Silva the writing Democracy Party (MPD) won this year election. MPD haa been critical of theda Sika board while inoppositionandis now condactinganucitof the Nagcarier before committing ta strategy Jose Luis Sa Nogueira, the alin’ former representative in Brazil has boen named by local medi as the new chief exscutive, Nogucra isto succeed where da Sia fale, he will need (tailor his turnaround plan tothe airlines iiosyneraticnetwork, ‘About three-quarters of TACY's seating capacity is deployed on domestic Righis between seven sla airports, Thetwo primary gateways are located in Sal Island - the country’s most poplar tourism destination ~and Santingo Island, home to capital ety Praia, Internationally TACY makes useof Cape ‘Verde mid-Adante positon to provide unusual cnnocting flaws, Three destinations are served in Braailtothe southwest (Fortaleza, Natal and Recife) and three in western Europe nthe Cape Verde's unique geography, landscape and demographics should be a blessing for state-owned Transportes Aéreos de Cabo Verde, (TACY). But, as Martin Rivers reports, the flag-carrier to turn potential into profits. TROUBLE IN PARADISE struggling ‘opposite direction (Lisbon, Parisand Amsterdam), ‘Therestf the network comprises Providence in the US stat of Rhode Islnd Dakar Senegal and Biss, Guinea-Bissau west Afrcarand Las Palmasinthe Canary sland "Maclid and Bergamo (near Milan) also feature inthe seasonal winter network. “TACV benefits from the location of Cape Verde," da Slsa explained. “Ifyoulook tothe Alanic chats, yousce that Cape Verde sin the middle of [ight paths from] Europe to South America, I's exactly in the mide. The outgoing chet had hoped to capitaliseon thistrait by developinga sixt-freedom hub in the island nation. “The projection are for about 20 millon passengers [tobe] fying over Cape Verdein 2020,” hes, estimating that the ratio ‘offnteational transfer passengers at TACV has increased from 5% n 2014 to somewherein the ‘double digits todas. “Tean' give youaprecise Figure, but it has groven substantial Crucially, twas not only the government that {daSilva was tying toconvince about the merits ‘ofsixth-reedom fying. Cape Verde has been attempting to privatise its fag-carrier For more than a decade, with ‘TAAG Angola, Chinas Okay Airways and Portugal’ EuroAtlantic Airwaysall reportedly ‘expressing interest atone time or another ‘Dail sai the discussions repeatedly focused on the ability of the sland nation to serve san intercontinental stopover Thats the potential othe business that] we areshowing the investors... but the interest [on their side] isnot strong,” he adaited Now we are not talking anymore with the Chinese carriers. Inthe past the Government of Cape Verde has been in talks with the Angolan Government, but with the new agreement between Emirates and TAG it will be more dlitficul,” he acknowledged, referringo the 10. year martagementdeal announced by the lag. 32caters Dubai and Angola in 2014. "The decisions over any investment by TAAG] willbe les political and more commercial Hopes of attracting unnamed “Gulf investors also fizzled out, bringing the divestment strategy toadead en. “Privatisation sone of the solutions [to TACV' troubles], but irs we haveto estrxture the company.” Olavo Correa, the country’s new finance minister, was reported assaying by local sedi in May.“[We must first reate] addtional strategic vale, and then privatise TACV. CCorreie's remarks coincided with aseriesof| meetings between TACY employees and Jose Goncalves, thenew economy minister, who ‘warned that therewould be no“sacredcows"in thenext restructuring pan Fordsa Silva, the writing was onthe walles soon MPD won paiamentary eletions in March, Having been appointed by the rival African Party forthe Independoncoof Cape Verde (PAICV), he \was considered emblematicof the previous xdinistration failed attempts to reform the flag ‘avi HisFinal year was also trishod by aseri of apparent cashflow problems, ineluding “TACV's temporary suspension fom the Inernational Air Transport Association LATA) ring House nd the attempted seizureol two sireralt over unpaid debts, ‘Nonetheless, despite widespread suppor for a fresh tat, would be unfair to blame da Siva for allo TACV's woes. Political interference at ‘he parastatal~oneof Cape Verdes main employers was.aconstant theme dutingthe 15 ‘eatlongadministration of former pre ‘minister Jose Mata Neves. DaSilva alsomade tangible stepsto improve efficiency at the airline, aided by consultant turned biel commercial officer Ark De, “The puirreplaced TACV' underperforming oston route with Providence, for example, betting on improved economies forthe more riche connection, Both cities are hubs forthe Cape Verdeandiasporain the US East Coast. gagaa They also restructured the domestinetwork to enhance connecting options, while strengthening the sixth-freeiom proposition wth Recife, Natal and Rotterdam (although the ater route ‘appears to havecbeen quietly suspended this ad he been given the chance, da Siva planned to launchaddtional outes to Frankfurt, Joao Pessoa in Brazil, and potentially Conakry in Guinea and Freetown in Sierra Leone, He also ‘wanted to grow the existing fleet of iveaireraft— ‘one 757, one 737-800, two ATR 72s andone ATR.42 =1o 11 nits by theend ofthe decade ‘Though the outgoing bef could have tackled labour issues more forefull he found himself ‘upagains severe politica hurdles and unique demographic challenges. "You have the opinion ofthe experts base on their benehmarking, but for smal cariersin an sland ration iis dilicul to make comparisons, hes when asked what sort of retrenchment the company ultimately needs to atain profitability ‘TheGoremmentstrwillingnssstodiecly secompense TACY forlossmaking nerisand routs also affected its Financial ess. "Weare ‘ding those [publieservize bligetion| lights but the Govermentisnot paying.” daSilva complained, drwingacontmst withthe countries that negotiate subsidies for commercially unviable strategic routes. He sai achangen the aw pending tore thesiuation, Before its electoral defeat, PAICV authorised string f loans for TACY from banks in Angola and Cape Verde demonstrating the party's Jong-term commitment othe flg-caric, Da Silva sees no reason why the new MPD government willbe any less supportive. "Cape Verdes an isolated archipelago 500k from Dakar 3,000km rom Europe, 3,000km from Brazil and maybe 5,000km from Norih America, heconeluded, “The county needsto baveairlinks, ‘We jastcan'afrd tobe without them, Boost your airline intelligence Ss 7 ret Saieeeae Pee ieee ei Correviation ere osetia) Pere clay SMH 33