ch-aviation interview: Edgardo Badiali, CEO Libyan Wings

Founded in 2014, privately-owned Libyan Wings has eked out a niche for itself in one of the world’s most unstable countries – Libya. Using a pair of A319s, it has developed a small, but sustainable, international route network serving Tunisia and Turkey with plans to expand to other North African states. ch-aviation’s Thomas Jaeger recently sat down with Libyan Wings CEO Edgardo Badiali at the Aviation Festival in London to discuss the airline’s past, present, and future operational plans as well as the peculiarities of the Libyan market.

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Despite the recent political détente, Libya has yet to return to economic and social stability. In fact, an Afriqiyah A330 was recently shot at while taxiing in Tripoli Mitiga. Given the poor state of national security, how do you keep your daily operations going?

I think that the global perception of security at Mitiga airport is actually worse than what it really is. Having said that, we are very much aware of this issue and, on top of Mitiga airport’s security with whom we work hand-in-hand, we have our own security department and people, so we are able to keep an eye on things.

Operationally speaking, and to be quite frank, we are doing far better than I would have expected for a startup operating in such a difficult environment. Our reliability is very high with a dispatch rate of over 99%. One of the main reasons for the success we have seen in these first eight months of service is our very high on-time performance, which is much appreciated in the market.

There were delays in the launch of operations initially. How have you dealt with suppliers, insurers, and even lessors given the country and the conditions you operate in?

Yes, there was a delay and it was quite painful to endure given the investment we had put in. We had the people and the aircraft in place but we could not launch given the events of 2014 [Ed note: the resumption of Libya’s internecine conflict]. In light of the prevailing situation, we decided it would be best to keep the aircraft, despite not using them from a commercial point of view. It cost us quite a lot of money but we eventually managed to launch in late 2015.

One of the major issues we had to resolve was insurance. We needed 100% coverage on the London market which, despite prolonged difficulties, we were finally able to get to the full satisfaction of our lessor.

The second major issue involved certification. To gain our AOC from the Libyan authorities, we had to undertake a proving flight with passengers but we could not bring the aircraft to Tripoli because of the situation there. So we had to resolve all of that in Istanbul, where Libyan Civil Aviation Authority personnel joined us on our proving flight to Antalya. We were awarded our AOC shortly after.

The third major issue was to make sure that we had access to an EASA-compliant line maintenance facility. While we had already signed a contract with Lufthansa Technik, the security situation prevented them from sending their personnel to Libya at that time. Eventually we were able to secure a contract with an EASA Part 145-compliant MRO organization in Italy which has a base at Tripoli Mitiga and which does excellent work for us.

So, those were, in a nutshell, the major issues we had to overcome before we were eventually able to launch commercial services in October 2015. We started initially with a single A319 before adding a second of the type in January 2016.

Libyan Wings Airbus A319 – Copyright: Libyan Wings

What about the allocation of traffic rights?

That was the next challenge; the allocation of traffic rights, slots etc. We currently focus on the Tunisian market, which we serve with twenty-four flights per week, twenty-one to Tunis and three to Sfax, and Istanbul which we serve 4x weekly. Sometimes we add more if and when we are able to get additional slots. This, in fact, would be very beneficial because our flights are basically always full.

We have also done some Umrah flights to Jeddah and Medina in Saudi Arabia.

Right now we are in talks with Morocco and Egypt about opening up flights there. With Morocco, from a civil aviation/traffic rights point of view etc., everything is ready. We’re just waiting for the Moroccan authorities to open up their airspace to Libyan carriers, following which we would be able to serve Casablanca in very short time and eventually other destinations like Marrakech. With Egypt, we are in talks to start flights to Alexandria, but again it is a matter of the Libyan and Egyptian governments reaching an agreement.

How do you plan your network given the frequent air embargoes Tunisia, Egypt, and Morocco impose on Libya?

You have to be flexible and adapt very quickly. At one point, we had to shift our Tunisian flights from Tunis to Sfax before moving to Monastir and eventually back to Tunis.

Libyan Wings Economy Class – Copyright: Libyan Wings

How is it competing with Afriqiyah and Libyan Airlines; two carriers that are essentially government-owned? Does government tend to favour them in terms of traffic right allocations at the expense of privately-owned carriers such as yours?

Not really. In terms of traffic rights, we fly to Tunisia with which Libya has an open sky agreement. Turkey has granted us additional traffic rights while with Morocco, it’s basically an open sky agreement as well.

But the status-quo could change overnight if, hypothetically-speaking, Europe were to reopen its skies to Libyan carriers. Then national-carrier status would play a significant role because in many of the bilateral air service agreements Libya has with European countries, only one airline is designated – not so much capacity constraints but a mono-designation. Take for example Malta. Malta is reserved for Libyan Airlines. Afriqiyah could not fly to Malta even before Libya was “blacklisted” by the European Union.

So that could become an issue. On what the future holds? Well it will depend on the future Libyan government. If it is intent on opening up the country to foreign investment, then it may have to embrace an Open Skies agreement with Europe in much the same way as Morocco has done and what Tunisia is currently considering doing.

Is there a reason why you only operate international flights? Or does the security situation prevent you from doing so?

We don’t fly domestically because basically the only real internal route – between Tripoli (in the west) and Benghazi (in the east) – is not feasible given the factional split we currently have in Libya. Now there are other destinations in Libya we could fly to but they would require a full fleet analysis, something that just isn’t feasible right now. So while Libya settles down, we prefer to concentrate on the routes we serve. But, in the event the situation improves, we may look into domestic flights at some point in the future.

Libyan Wings Business Class – Copyright: Libyan Wings

You mention that you have seen strong demand for your flights. Can you expand on that?

Our two aircraft are well utilized, so we are now looking to get a third and a fourth. To give you an idea, in the last couple of months we have consistently registered load factors of over 90%. Even our business class has seen very high demand. In light of this, we are now looking at sourcing an A321. This aircraft would be ideal for us given the demand we anticipate on routes to high-density markets such as Egypt. While we intend to retain the A319 for certain routes, we’re now looking at larger types because of overwhelming market response.

Let’s talk about the MOU Libyan Wings signed with Airbus for three A350-900s and four A320neo in November 2013. Is it still around?

Yes, it is still around. We have been in touch with Airbus and we should finalize discussions around the first or second quarter of 2017. Nothing has been finalized as yet. For our part, we may consider converting the A350s into more A320neo which would make better commercial sense at present. But this will be a matter for our upcoming discussions with Airbus.

Libyan Wings Business Class meal – Copyright: Libyan Wings

What’s your current market segmentation like? What is the breakdown of your market and given recent events, has it changed?

Most of our customers are Libyan and a substantial proportion are businessmen. Both Turkey and Tunisia see a lot of business-related traffic. For its part, aside from Libyan-owned businesses, Tunisia is also popular because of people seeking visas. You’ll recall that a number of embassies in Libya closed following the outbreak of war leaving people with no alternative but to travel to Tunis to try and apply for visas at embassies there. We also see a lot of medical-related traffic heading to Turkey and Tunisia – people seeking treatment, surgeries etc. that you cannot find in Libya.

So we see a bit of everything but the greatest percentage of passengers is business-related.

Do you think the Libyan market, as it presents itself right now, can sustain the number of operators it has? You have Afriqiyah, Libyan Airlines, Buraq, Air Libya, etc. all vying for what appears to be a relatively small market.

It depends on how Libya develops. At the moment, the environment is very difficult because of the limited number of destinations Libyan carriers can serve. But as things improve and new markets eventually emerge, so new opportunities will present themselves. However, the downside to that is that with new markets come new competitors and here I’m not only talking about Libyan carriers, but foreign carriers coming back into our market.

However, despite those possible negatives, the return of foreign airlines would also be an indication that Libya, as a destination, is becoming increasingly attractive to outsiders seeking new investment opportunities – in reconstruction among other areas. And demand has been enormous in the past. An example is the period after the 2011 revolution through to the end of 2013 when the situation started to deteriorate again. During that brief period, the explosion in traffic numbers was incredible.

Overall, insofar as competition is concerned, I am not worried. Our actual focus is to be able to progress into the second phase of operations. We were a startup, but we now have a very good product, we have high reliability, and we have built a very good brand in the market with excellent brand recognition. Now we have to figure out how to profit from this “niche” by improving our organizational processes, further innovate our product and services, develop systems in place as well as focus on training for our people. Last but not least, we have started to work towards IOSA certification which is something we want to achieve as soon as possible.

Libyan Wings HQ in Tripoli – Copyright: Libyan Wings

Are you pursuing any interline agreements that would grant you access to Europe?

We are currently looking into this and plan to start talks with airlines in target countries in this regard. We will see what the outcome is. We know already today that we have a good number of self-connecting customers at the destinations we fly to so there is strong potential.

Do you have any expectations as to when the European Union might lift operational restrictions against Libya?

No. There are basically two issues that must be resolved. One is accepting the Libyan Civil Aviation Authority (LCAA) as a regulatory body and that will take time. I have heard rumours that either the Italian or the British government will give support in this process, most likely the Italian civil aviation authority (ENAC), which will basically ensure that Libya’s regulatory oversights are in line with EASA-defined standards. To their credit, the LCAA has already made a lot of progress in terms of the alignment of its internal procedures, with more positive developments expected in the coming weeks and months.

The other issue is related to security. This pertains to whether bilateral partner countries will want to allow the resumption of flights to and from Libya.

To what extent have you deviated from your original business plan?

Oh, quite a bit. As I mentioned earlier, we need to be flexible. We fly where we can, and not, unfortunately, where we want to. So for us, we have to seize all and any opportunities as and when they present themselves. We know that any plan can be affected by external factors which are beyond our control.

Where we have not deviated from our original business plan is in our commitment to high safety standards, high product and service quality, and high reliability and punctuality.

Even though you have said long-term plans have little relevance in your market, where do you see Libyan Wings in the future?

One objective is to develop Tripoli into an intercontinental hub. Bear in mind that from Tripoli, an A320 can reach as far south as Nigeria and as far north as Oslo, Norway. So basically, we can cover nearly the whole of West and Central Africa and most of Central, Northern, and Southern Europe. There is also the possibility of developing an Asian network which, again, will depend on the country. Libya has been home to a number of expatriates from the Philippines, Bangladesh, Pakistan etc. in the past and this is likely to occur again if things improve. And last but not least – this was also one of our long-term goals – to serve the United States where there is a very big Libyan community and from where a lot of investment could come from in the future.

The other objective is to explore the cargo market. The limiting factor is that you really only have inbound loads with very little outbound. Even now, there is big demand for freighter capacity and we expect that to soar if and when the economy picks up.

Thank you very much

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