NAIROBI: Uganda Airlines has taken to the skies once more after almost two decades out of action, but flies into a crowded aviation market in Africa where carriers have the weakest finances and emptiest planes of any region in the world.
The state carrier launched commercial flights on Wednesday, its first since it was liquidated in 2001, aiming to take a slice of the East African aviation business that is dominated by Ethiopian Airlines, the continent's success story.
Uganda is the latest African government to pour money into national flag carriers; Tanzania and Senegal are also resurrecting their airlines, while the likes of Rwanda, Ivory Coast and Togo are expanding theirs.
But such efforts have been hampered by high business costs as well as protectionism, which has impeded a continental open-skies agreement - something industry experts say is vital for the success of African carriers in a tough market.
The African market is forecast to grow almost 5% a year over the next two decades in terms of passengers, faster than mature markets, according to the International Air Transport Association (IATA). However, this is from a low base and most state-owned flag carriers in the region are losing money.
While the global aviation industry is on track to make a profit of $28 billion, African airlines are projected to make combined losses of $100 million this year, IATA said in June.
Uganda Airlines, like some of its rivals, aims to attract more domestic travellers to help it buck the gloomy continental trend. Around 2 million passengers per year travel through Entebbe, Uganda's main airport. Around 70% are Ugandans, said the carrier's CEO Ephraim Bagenda.
"All those currently travel on foreign airlines," he told Reuters. "We want part of that cake."
Last year, it looked like Africa was making progress on an open-skies agreement - the Single African Air Transport Market - to let airlines decide how frequently they fly between cities and which aircraft they use.
A total of 28 countries have signed up, accounting for 75-80% of African air traffic. Uganda is considering signing, Works and Transport Minister Monica Azuba Ntege said.
However, so far only 10 signatories - including Cape Verde, Ghana, Togo, Ethiopia and Nigeria - have begun changing their own laws to implement the deal and open up their markets, said Raphael Kuuchi, Vice President for Africa at IATA.
The patchy efforts undermine the agreement and hobble direct connections within Africa, say analysts. Some airlines, including from countries that have signed up, oppose the open-skies deal because they fear bigger competitors.
"The most subsidised airlines and the biggest ones are going to take the biggest market share because they (are) able to afford it," Kenya Airways CEO Sebastian Mikosz told an investor briefing on Tuesday. "They are going to kill the smaller national airlines which are just starting because they will have no way to defend themselves."
Ethiopian Airlines, sub-Saharan Africa's only successful large state-owned airline, has bucked the regional trend and has been expanding fast, thanks in part to having secured key traffic rights in two ways.
First, it signed bilateral agreements with nearly all African countries in the 1970s, activating them as needed, said Kuuchi. The airline flew to parts of the continent served by few other carriers and leveraged that goodwill to open up markets.
"Governments were willing to give them additional rights, and travel rights, once you give them out, it's very difficult to retract," he added.
More recently, Ethiopian has been helping other countries launch their own carriers and taking a stake. That has created regional continental hubs in Togo, Malawi and Chad where it can pick up and feed traffic into its main hub in Addis Ababa, cementing its dominance and rivalling Gulf carriers.
Now governments are hoarding travel rights to protect their own airlines, so African carriers are struggling to set up hubs vital to winning international travellers, said Girma Wake, former CEO of Ethiopian Airlines.
"Instead of flying point-to-point everywhere, if they can collect traffic from the low-traffic areas and bring them to major hubs and carry them from those major hubs, you will be in a better position," he told Reuters.
African aviation accounted for only 2.1% of the global market in 2018, with 92 million passenger journeys flown, and non-African airlines including Emirates and Turkish Airlines account for around 80% of traffic in and out of the continent, IATA said.
African airlines are also struggling to improve load factors - percentage of seats filled - from the world's lowest regional level of 71% in 2018, compared with 81.2% globally, according to IATA.
Emirates builds traffic through its global Dubai hub, an advantage most African airlines don't have - except Ethiopian Airlines.
As well as protectionism, high fuel and taxation hurt African carriers.
In Europe, a passenger can travel 1.5 hours for less than $100 all-inclusive. In Africa, passenger taxes alone range from $40 to $150 per passenger, African Airlines Association Secretary General Abderahmane Berthe told Reuters.
"Many governments are levying taxes on aviation and not reinvesting these collected amounts in aviation," he said.
Governments often see air transport as a luxury that can sustain high taxes, said Air Tanzania managing director Ladislaus Matindi.
Fuel is also taxed heavily and must often be trucked in, an expensive operation. Fuel makes up about a quarter of operating costs globally but reaches 30-40% in Africa, Berthe said.
Uganda Airlines, founded by former dictator Idi Amin in 1976, was liquidated in 2001 after years of unprofitability during a push to privatise state firms.
Other African state carriers have been crippled by government interference, such as insisting on routes to unprofitable but politically important destinations.
Ghana Airways, which ceased operations in 2005, used to fly between Accra and Las Palmas, mainly because of the friendship between the leaders of the two countries, IATA's Kuuchi said.
Uganda Airlines CEO Bagenda insisted his company would be free from any political interference.
"Government policy in Uganda is eyes on, hands off," he said.
Crowded African skies get even busier with Uganda Air’s return
Crowded African skies get even busier with Uganda Air’s return
- Continent lacks Dubai-style hub as Emirates and Turkish Airlines dominate routes
How a Saudi start-up hopes to beat sickle cell disease with an AI-trained gene-editing biorobot
- Sickle cell disease is a genetic blood disorder in which red blood cells are crescent shaped and rigid
- Riyadh-based NanoPalm is combining AI-trained models and nanotechnology to remove faulty genes
RIYADH: Saudi-based biotechnology company NanoPalm is developing a biorobot using a unique blend of artificial intelligence, nanotechnology, and gene therapy to find a solution for patients with sickle cell disease.
Affecting approximately 20 million people worldwide, sickle cell disease is a genetic blood disorder in which red blood cells are crescent shaped and rigid. Patients with sickle cell experience blocked blood vessels, pain, fatigue, and anemia, impacting their well-being.
Founded in 2022, and headquartered in Riyadh, NanoPalm began life at the King Abdulaziz City for Science and Technology (KACST) before it was incubated by the NextEra initiative.
The biotechnology company is run by the Ministry of Communication and Information Technology in partnership with The Garage — once a car park, now a 28,000-square-meter space that can accommodate 300 startups.
Ali Al-Hasan and Samar Al-Sudir, the founders of NanoPalm, have used their expertise to develop a product that goes beyond treating the symptoms of sickle cell. Their aim is to remove the gene from a patient’s body altogether.
With Al-Hasan’s knowledge of nanomedicine and Al-Sudir’s background in chemistry, the pair were able to bring their combined expertise to bear.
The NanoPalm team spent more than a year collecting data to feed into artificial intelligence models, Al-Hasan told Arab News.
“We explored AI and we found it was a long journey where we needed to create our own data and generate the data that will be used to train AI models,” he said.
“It will predict the best gene therapy and predict its safety, its effectiveness, and cut down the duration of the therapy, while making it affordable.
“Discovery is at the heart of any drug development process in any pharma company. Now it has become digitized and AI enabled.”
In the development of their product, NanoPalm uses three technologies: AI to model and predict, nanotechnology to create the medicine, and gene therapy to edit genetic material.
“We use the manufacturing recipe from the AI and then go to the lab to build a lipid biorobot,” said Al-Hasan.
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“It’s like a vehicle. And those lipid biorobots encapsulate genetic materials such as mRNA and other RNA molecules, which act like scissors to remove the gene that we want to remove.
“When patients come to the clinic, they usually get an IV infusion of biorobots encapsulating genetic materials for four hours and then go home. The biorobots will then navigate their body and find where the disease is. They go after cells responsible for sickle cell.”
NanoPalm has set out to revolutionize the biotech industry. Al-Hasan said the company’s mission is to make treatment more cost-effective.
“As we dove into this problem, we found two important facts,” he said. “Sickle cell disease is not the only genetic disease. There are 6,000 other genetic diseases that have no known cures.
“The second problem is that the current gene therapies are ineffective. They are super expensive. The patients would have to be rich to afford gene therapies, for example, because sickle cell patients would have to pay $2.2 million to get one injection.”
NanoPalm is collaborating with KACST, King Saud University, and the National Guard Hospital to treat 15 sickle cell patients from Saudi Arabia.
Al-Hasan says some 42,000 Saudis stand to benefit from NanoPalm’s product when it is launched in 2030.
China’s exports and imports return to growth
- Shipments from the country grew 1.5 percent last month by value: data
RIYADH: China’s exports and imports returned to growth in April after contracting in the previous month, signaling an encouraging improvement in demand at home and overseas.
The data suggests a flurry of policy support measures over the past several months may be helping to stabilize fragile investor and consumer confidence.
Shipments from China grew 1.5 percent year on year last month by value, customs data showed on Thursday, in line with the increase forecast in a Reuters poll of economists. They fell 7.5 percent in March, which marked the first contraction since November.
Imports for April increased 8.4 percent, beating an expected 4.8 percent rise and reversing a 1.9 percent fall in March.
“Export values returned to growth from contraction last month, but this was mainly due to a lower base for comparison,” said Huang Zichun, China economist at Capital Economics.
“After accounting for changes in export prices and for seasonality, we estimate that export volumes remained broadly unchanged from March,” she added.
In Q1, both imports and exports rose 1.5 percent year on year, buoyed by better-than-expected trade data over the January-February period. But the weak March figures prompted concerns that momentum could be faltering again.
Crude oil imports
China’s crude oil imports rose on the previous year in April, as refiners prepared for a fully recovered Labor Day holiday travel season, official data showed on Thursday.
Crude imports in April totaled 44.72 million tonnes, or about 10.88 million barrels per day, according to data from the General Administration of Customs.
That represented a 5.45 percent increase from the relatively low 10.4 million bpd imported in April 2023.
China saw more than 1.3 billion passenger trips over the five day Labor Day holiday that began on May 1, up 2.1 percent from a year earlier, state media outlet Xinhua reported.
Highway traffic was up 2.1 percent while air trips surged 8.1 percent, Xinhua said.
Domestic airline seat capacity in April was up 1.3 percent on last year, data from consultancy OAG showed.
China’s manufacturing sector continued to see muted recovery in April.
Natural gas imports for April rose 14.7 percent from a year earlier to 10.30 million tonnes, data showed.
Prices of liquefied natural gas for Asia at the end of April were down 11.3 percent on the same period last year, and down 43 percent from last year’s peak in October.
Customs data also showed exports of refined oil products, which include diesel, gasoline, aviation fuel and marine fuel, were up 21.46 percent from a year earlier at 4.55 million tonnes.
Coal imports
China’s coal imports rose in April fueled by lower domestic production and greater buying by power generators to swell stockpiles ahead of the peak summer demand season.
Shipments of coal into the world’s largest consumer of the fuel were 45.25 million tonnes last month, up 11 percent from 40.68 million a year earlier.
That was up by 9.4 percent from March and 2 million tonnes less than December’s record of 47.3 million tonnes.
The boost in imports is partly because domestic coal production has not increased to meet demand, said Feng Dongbin, an analyst with consulting firm Fenwei.
China’s coal output fell 4 percent on the year during the first quarter, the most recent data shows, in part because of a string of deadly accidents that forced mines in the top coal-producing province of Shanxi to halt operations for safety inspections.
Saudi bourse among top 10 in the world in terms of market cap, says official
RIYADH: Saudi Tadawul Group finds itself in a “fortunate” position amid the Kingdom’s rapidly growing industries, said a senior executive.
On the sidelines of the Capital Market Forum 2024 held in Hong Kong, Nayef Al-Athel, group chief of sales and marketing officer at Tadawul Group, highlighted the company’s aim to attract global investors by sharing compelling success stories at international forums.
Speaking to Arab News, Al-Athel explained the dual nature of the group’s goals, emphasizing commercial targets focused on maximizing revenues as a listed company.
He said: “I think we are very fortunate as a capital markets group, fortunate in the sense that a lot is going on in the Kingdom. There’s unbelievable momentum in various facets of this country, and we are fortunate to be at the juncture of spillover from all these industries and all these new sectors being unraveled and unveiled in Saudi Arabia.”
Al-Athel added: “The story of the Kingdom of Saudi Arabia is very attractive, and that attraction then translates to us being very attractive as a capital market.”
Additionally, he emphasized Saudi Arabia’s geographic and time zone position, acting as a bridge between the East and West.
“If you take that from a geographical standpoint, time zone perspective, that can be straightforwardly translated into capital markets narratives of connecting East to West,” Al-Athel said.
He added: “If you look at the conference that we’re in here at CMF Hong Kong, it’s literally an attempt, which we think is very successful of us, connecting East to West.”
Commenting on his statement from the previous CMF in February held in Riyadh, Al-Athel explained how Tadawul Group is at the forefront of global capital market leaders.
“We are a top 10 stock exchange when it comes to market cap, to continue to propel ourselves high incomes to market cap rankings. That, of course, means more IPOs and more capital market transactions, more interest from investors all over the world,” he said.
Al-Athel further explained that the group’s success is building itself as an equity capital market powerhouse in Saudi Arabia, particularly through a significant number of IPOs in recent years. There’s a focus on expanding into debt capital markets and derivatives to diversify their offerings.
“We’ve worked hard on building ourselves as an equity capital market powerhouse. The number of IPOs has been staggering over the last three to four years in the Kingdom,” Al-Athel stated.
However, he mentioned that there are currently no specific announcements to make.
“We’re living in a very exciting situation as we speak, hosting 300 investors from 44 companies at the Capital Market Forum in Hong Kong,” said Al-Athel, adding that it’s the first cross-border capital market event, with participation from entities in Saudi such as the CMA and the Ministry of Investment.
He continued: “This is the flavor of where we are at the moment. This is where we are focused. Again, for sure there will be activity in the foreseeable future.”
Furthermore, Al-Athel mentioned that the group has celebrated 400 securities listed on Tadawul.
“Among those 400 listed securities, we find many success stories, and those success stories do sell themselves internationally. We have more than 22 companies traveling with us to Hong Kong, and the sole purpose of those companies, the Saudi corporates, is to tell their success stories to investors from Asia.
Al-Athel concluded his statement by highlighting the significant transformation undergone by the capital market, particularly with the achievement of 400 listed securities and a diverse investor base spanning Saudi Arabia, the region, and globally.
He noted that the rise in institutional investment and increasing numbers of IPOs signal a healthy market environment.
Al Rajhi Bank launches $1bn in perpetual bonds, says document
RIYADH: Al Rajhi Bank, the world’s largest Islamic bank by assets and market capitalization, has launched $1 billion in Additional Tier 1 sustainable sukuk, or Islamic bonds, a document from one of the banks arranging the deal revealed on Thursday.
The final yield for the debt transaction was set at 6.375 percent, tighter than the initial guidance of around 6.875 percent released in a document earlier in the day. The notes are perpetual in nature and can first be redeemed in May 2029.
The deal received more than $3.5 billion in orders and allocation is expected to happen later in the day, the document showed.
AT1 bonds, the riskiest debt instruments banks can issue, are designed to be perpetual in nature, but lenders can call them after a specified period.
Closing Bell: Saudi main index slips to close at 12,284
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Thursday, losing 175.70 points, or 1.41 percent, to close at 12,284.41.
The total trading turnover of the benchmark index was SR7.31 billion ($1.94 billion) as 41 of the stocks advanced, while 184 retreated.
On the other hand, the Kingdom’s parallel market Nomu rose 199.85 points, or 0.74 percent, to close at 27,086.44. This came as 20 of the stocks advanced, while as many as 45 retreated.
Meanwhile, the MSCI Tadawul Index slipped 19.92 points, or 1.28 percent, to close at 1,537.54.
The best-performing stock of the day was Al-Babtain Power and Telecommunication Co. The company’s share price surged 7.77 percent to SR45.75.
Other top performers include Retal Urban Development Co. as well as Tanmiah Food Co.
The worst performer was Gulf Union Alahlia Cooperative Insurance Co. whose share price dropped by 10 percent to SR22.68.
Other worst performers were Allied Cooperative Insurance Group as well as Al-Etihad Cooperative Insurance Co.
On the announcements front, Jamjoom Pharmaceuticals Factory Co. has announced its interim financial results for the period ending on March 31.
According to a Tadawul statement, the company’s net profit hit SR102.9 million in the first quarter of 2024, reflecting a 22 percent surge when compared to the similar quarter last year.
The increase was mainly driven by an increase in sales, which were slightly offset by the devaluation impact from the Egyptian pound.
Moreover, the National Gas and Industrialization Co. also announced its interim financial results for the first three months of 2024.
A bourse filing revealed that the firm’s net profit reached SR78.6 million by the period ending on March 31, up 7.6 percent in comparison to the corresponding period in 2023.
The increase in net profits is primarily attributed to a surge in gross profit by SR9 million due to increased revenues, alongside a rise in investment and finance income by SR2 million. Additionally, there was an increase in other income by SR1 million, coupled with a decrease in zakat expense by SR2 million.
Furthermore, Modern Mills for Food Products Co. also announced its interim financial results for the first quarter of the year.
According to a Tadawul statement, the company’s net profits climbed 1.3 percent to reach SR64.9 billion in the first three months of 2024 compared to the same period a year earlier.
This rise is mainly owed to revenue growth as well as improving efficiency.
Additionally, Saudi Industrial Investment Group also announced its interim financial results for the period ending on March 31.
A bourse filing revealed that the firm’s net profit stood at SR28 million at the end of the first quarter of 2024, compared to a net loss of SR242 million recorded in the same quarter a year ago.
The increase in net profit is attributed to SIIG’s higher share of profit from joint ventures, coupled with a reduction in zakat expenses.
