Home | News    Thursday 3 February 2011

Airline companies in Sudan may cease operations as dollar shortage worsens


By: Bonifacio Taban Kuich

February 2, 2011 (BENTIU) – A Kenyan private airline has decided to suspend operations in all ten states of Southern Sudan in light of the chronic deterioration in the value of the Sudanese pound against the U.S. dollar, one of its officials told Sudan Tribune.

“We are closing down because we were facing a lot of challenges in the market due to high dollar rates. This is why we stopped and this decision came from the board of directors,” said Malual Tuong who is Branch manager for 748 Air Services in Sudan’s Unity state.

Tuong emphasized that the airline was forced to make this move as a result of the direct impact of the exchange rate issue on its bottom line. He disclosed that the company’s senior management team was recently in Juba to assess the situation.

The airline’s branch manager gave an example of how a ticket worth 500 Sudanese pounds used to exchange for 200 dollars but because of the declining exchange rate it is now worth less.

The decision became effective Monday and no date has been given for it to resume operations. Tuong said they could reverse the move if currency situation improves.

“If we are able to get any ministry or the bank of South Sudan to give us dollars, then we would be able to come back to the market. Otherwise for the moment we don’t know how long we will be out of the market” he said.

The situation faced by 748 airlines is not the only one of its kind in Sudan.

The Sudan manager of German airline Lufthansa, Hartmut Volz, told Reuters last Thursday the airline industry was being hit hard, with millions of dollars in revenue stuck inside Sudan.

"All airlines are facing the same problem," he said, adding Lufthansa would decide what to do with its Sudan operation, a tiny portion of their global network, next April.

"We are talking to the central bank and to our bank but there is no chance to get the money out at the time being," Volz said.

Last November Sudan temporarily devalued the Sudanese pound to match the black market, hoping to bring more foreign currency into official trade and destroy the parallel market. So far it has met with limited success with banks still unable to meet the demand for foreign currency.

Sudan blamed the shortage on speculation related to situation in North Sudan after the South breaks away, as well as the fallout from the global financial crisis in 2008.

Figures of the International Monetary Fund (IMF) show that Sudan’s central bank has limited hard currency at its disposal to intervene in the market.

Emirates, the Arab world’s largest carrier also began to restrict ticket sales inside Sudan because of the Forex shortages. Foreigners must now pay in hard currency or by credit card. But Sudanese can only pay by credit card, which will reduce traffic because few Sudanese have credit cards.

"Many airlines will have to close down [in Sudan] if this continues," said economist and former finance ministry official Hassan Satti.

"The foreign currency situation is not going to improve." About a dozen foreign airlines fly to Sudan.

Sudanese law prevents airlines selling to nationals in foreign currency and U.S. sanctions imposed since 1997 stops credit card transactions, which leaves few options open to airlines other than to reduce or stop operations.

Under-Secretary of the Investment Ministry Awad al-Karim Balla said the measures had caused problems but they were temporary.

"We are cooperating with the [central] bank to make some solutions to this problem, and they promised to do so in the coming months," he said.

But airlines have not been given any date for an end to the restrictions to be able to plan around them.


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  • 3 February 2011 10:05, by Chuangah

    Not only Kenyan private airlines, but all of the transport companies will cease their work becoz of the fallen prices of Sudanese pound. the govt must intervene in rescueing the situation in south sudan. South sudan will go back to square one, like the time when we were struggling. food commodities fuel, anything is at a very high prices, like one litter of fuel cost 10 sudanese pounds here in lakes. We are as if we are in economic sanctions.

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  • 3 February 2011 12:36, by Raan naath

    Wow!! Kenya airline close because of dollar price across the ten states of south Sudan. The offer of 500 SDG per ticket is enough to change 180 USD, so you greedy Kenyans demand for much consumption. Compare paying 150 USD from Juba to Kampala which is far then flying around the ten states of south Sudan. You shouldn’t play with our economics around, in order to get faster investment in south Sudan.

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  • 3 February 2011 13:06, by Janafil

    Oh my God, the government of the South should look into this very serousely!!!

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  • 3 February 2011 14:11, by Chanson

    Let 748 go for good.Since that company knows that we are using pound in Sudan then why do the chosed to came and operate in the South.that is not the reason of their leaving.The reason behind this is that they want to enhance the price of ticket from 500 SDG to 1000 SDG.That is really too much.

    One thing they should know is that South Sudan is not gas station.(Owner Lucky) Said much of that.


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    • 3 February 2011 14:40, by Stephen Gatloth K

      Only to the article,Gatloth Gai-Bentiu,

      Let them park and go for good.

      Kenyans are money lover the reasons could not be rates of Dollar if the matter is not only thier concern but the entire country Air line.

      SAC will take this advantage we don`t mine let them go and must be for good.

      If we the local community where the Air is lands,we do not benefit from them.At Koch county where the airstrip is located there is no land and air polution compensation.We hate them along with their government backed who possesed the right of my people of Koch and consum this money paid by 748.

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  • 3 February 2011 17:56, by Tambura

    Let them go forever, we should not allow them to operate in south Sudan again.
    Friend in need is friend did. They have been operating is south when the situation was bad than it is now. Why not south Sudan to start their airline?
    Four years ago they show us two boings they said it was gift from south Africa.

    The next president of south Sudan

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  • 3 February 2011 22:24, by dansu

    Emotions Emotions Emotions, keep them in check.
    This has nothing to do with them being Kenyan. The simple fact is that they are business people, who are doing business because they want profit. And if Southern Sudan is not profitable for them, they have every right to leave.
    I think what we should be saying and doing is urging the South Sudan government to make it easy for people to conduct business.

    Peace, Freedom, & Happiness
    But War is always an option.


    repondre message

  • 7 February 2011 14:54, by John mamer

    I think the closure of 748 has nothing to do with the drop of sudanese pound compare to US dollar,but they might got better market some where than in Southern Sudan instead of claiming the wrong reason 500 SP they charge for their ticket is reasonable compare to what they 748 can get in Kenya.

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