Is Air Ivory-Coast’s decision to raise US$170 million the right one?

Air Ivory -Coast is seeking 170 million dollars (around 104 billion CFA francs) in financing from local and international banks and financial institutions. Ivory -Coast’s national airline is preparing to reinforce its fleet with two new Airbus A330-900 NEO aircraft, which experts praise for their fuel efficiency and long-haul capacity, offering the user airline,

 “greater operational flexibility and enhanced passenger comfort“, says an Ivorian.

Air Ivory-Coast is seeking to complete payment of advances on delivery already made to Airbus, representing 97% of the total cost of the two aircraft. In detail, the funds requested will be obtained with a minimum maturity of 10 years on a defined schedule: 85 million dollars in December 2024, in anticipation of the delivery of the first aircraft, and a similar amount in April 2025 for the second aircraft, according to the details communicated by Air Ivory-Coast.

The only problem is that Airbus has booked more than 2,000 orders for 2023, 600 more than its previous record in 2013 and, according to RFI, 700 more than Boeing, its main competitor. The problem is the supply chain can’t keep up. To build its aircraft, Airbus relies on more than 3,000 suppliers, all potential bottlenecks.

A plane costs between $70 and $350 million

The aircraft manufacturer had announced that it would deliver 800 aircraft this year, but has now revised this figure downwards: Airbus will only be able to market 770 aircraft in 2024. Hardly reassuring news for Air Ivory-Coast. As our RFI colleagues remind us, an aircraft costs between $70 and $350 million, and airlines only pay on delivery. A new equation, for Air Ivory-Coast development strategy, aimed at improving its network of international roads and strengthening its presence on the African market. A hyper-competitive air transport market.

Passenger traffic in Africa is up by almost 22.1%. In November 2023, African airlines recorded an increase in passenger traffic of almost 22.1% compared with 2022, according to IATA (International Air Transport Association) in its latest report. Capacity for all carriers increased by 29.6%.