Deal for eight ATR 72s heralds a lift for Africa

 - February 8, 2008, 8:35 AM

London-based investment conglomerate Lonrho unveiled plans last month to develop what it calls the first true pan-African airline with a new fleet of eight 66-seat ATR 72-500s. The memorandum of understanding–one of the largest ever signed by an African regional airline for ATR turboprops–calls for delivery of four airplanes this year and four more next year to Lonrho’s Kenyan airline subsidiary, Lonrho Air, which operates from Nairobi under the name Fly540.

ATR has promised to help Lonrho obtain export finance backing from COFACE and SACE, the export credit agencies (ECA) of France and Italy, respectively. ECA support might cover up to 85 percent of the purchase costs of the aircraft. The balance will come from Lonrho Air in periodic installments, before each delivery.

Named after its original 5,540 Kenyan shilling ($83) round-trip ticket between Nairobi and Mombasa, Fly540 launched service in November 2006 between those two cities with a 48-seat ATR 42. It has since acquired two more ATR 42s and a 37-seat de Havilland Dash 8-100 and as of last month flew to seven Kenyan airports and Entebbe, Uganda. The next phase of expansion focuses on the East African region and three “key” business routes scheduled for launch this year.

 Listed on the London Stock Exchange, Lonrho participates in a range of business ventures throughout Africa, centered primarily on infrastructure, transportation, support services and mining. Apart from Fly540, Lonrho’s aviation interests include a 43-percent stake in Norse Air, a private aviation company engaged in charter and freight services, leasing, sales and maintenance. Norse Air’s activities extend from its primary bases in Mauritius and South Africa to Afghanistan, Ivory Coast, Ghana, Madagascar, Mali, Mozambique and Singapore.