attract Black American customers by selling itself as an emergent black successful enterprise. This was .... By 1971, with an array of aircraft and expertise from the French airlines in hand, the airline emerged as a ...... (2001): 675â711. Andrews ...
Full reference: Amankwah-Amoah, J., & Debrah, Y. A. (2014). Air Afrique: the demise of a continental icon. Business History, 56(4), 517-546. Air Afrique: The demise of a continental icon Abstract Although the rationale for multi-flag airlines’ formation is rooted in contemporary strategic thinking, our understanding of their emergence and subsequent mass disappearances in the 20th century remains an elusive issue. This article seeks to fill this void by examining the emergence, ascendency and demise of Air Afrique, an airline once seen as a symbol of regional integration in Africa. This examination takes a historical perspective and covers the period from 1961 to 2002. On the basis of this historical analysis, five distinct stages have been identified reflecting the firm’s glorious days, precipitous decline and subsequent collapse. These are: the golden; Africanisation; escalating indecision, escalating commitment and dissolution phases. Each phase provides insights into the deterministic and voluntaristic perspectives of organisational failure. The implications of the findings of this research for theory and practice are discussed. Key words: organisational failure; firm ascendancy, firm demise; airline, Air Afrique; Africa
Introduction In the second half of the 20th century, many newly independent African countries deployed their limited resources and capabilities towards establishing joint entities and institutions to project their image around the globe.1 These organisations were seen as a means for small nations to put their limited resources to productive use,2 but by the turn of the 21st century many of these firms had largely disappeared. In the civil aviation industry, these firms were known as ‘multi-flag airlines’ (MFAs), which refers to any ‘international airline jointlyowned and operated as a national air carrier of two or more nations’.3 Over the past six decades, with the notable exception of the Scandinavian Airlines Systems, other MFAs such
1
as Central African Airways, East African Airways and West African Airways Corporation (WAAC) have all disintegrated.4
Although business history and management scholars have long been interested in why organisations fail,5 our understanding of multiple-nation owned firms’ emergence and disappearance, over a relatively short period, remains elusive. Moreover, despite the burgeoning interest of business historians in examining organisational failure,6 there is still a gap in our understanding of the issues surrounding factors responsible for the evolution and demise of iconic firms such as Air Afrique and East African Airways. In attempting to illuminate our understanding of these issues and to contribute to the theoretical discussion, this article examines the evolution, ascendency and fall of such firms using Air Afrique as a case study. Air Afrique is the focus for two main reasons. Firstly, the airline was regarded as a ‘shining symbol of Pan-African dreams of unity and a model for the region’s post-colonial era organisations’.7 Indeed, it was also seen as a ‘shining symbol of Africa’s imminent take-off’ in respect of economic development.8 Secondly, unlike other MFAs (such as the WAAC, Central African Airways and East African Airways) that succumbed to political and economic dictates of emergent African nationalism much earlier, Air Afrique, for decades, demonstrated extraordinary resilience in overcoming political interferences.9 Its formation and experiences not only mirrored Africa’s ups and downs in the subsequent decades, but also shaped economic and development policy formulation.10 As a multi-nation entity, it was considered as ‘the most daring of the new approaches to joint air transport endeavour’.11 The airline was renowned for its efficiency and to many in post-colonial Africa, it was a dream airline to fly with and to do business with.12 These arguably are compelling reasons for using Air Afrique as a case study to illuminate our understanding of how such a celebrated business model emerged, diffused and then fizzled out in the global airline industry. 2
Overall we employ an organisational failure approach to explain, understand and learn from the sequence of events leading to failure. To achieve this aim, we begin with a brief review of the literature on organisational failure. This is followed by an overview of how MFAs evolved in Africa. The history of Air Afrique and factors that precipitated its decline and subsequent demise are then examined. The article then identifies and examines the five distinct phases in the firm’s ascendency and eventual bankruptcy. The final section outlines some managerial implications of the study.
Organisational failure literature The literature on organisational failure has polarised between the deterministic and voluntaristic perspectives.13 The deterministic perspective contends that managers are limited by exogenous industrial and environmental constraints, over which they have little or no control.14 This line of research sees failure as an inevitable consequence of the process of ‘natural selection’, where those firms that do not fit in their environment are ‘selected out’ and ‘die’.15 The main premise here is that external factors such as technological change, deregulation and liberalisation, enable more efficient firms to drive out their less efficient competitors.16 The other school of thought, the voluntaristic perspective, suggests that managers’ actions, inactions and perceptions are the fundamental causes of failure.17 The argument is rooted in the assertion that organisations through the actions of management can shape their own destiny and avoid failure. This strand of research provides evidence to support the view that firms’ inability to adapt to changing business environments and lack of managerial foresight are key factors precipitating failure.18 It further contends that organisational-specific factors such as top-management team deterioration, deficiencies in managerial knowledge and financial management abilities are also key factors in firms’ demise.19
3
Although both theoretical and empirical research reflect a clear divide between the two perspectives,20 some scholars have suggested that organisational failure is a reflection of both the deterministic and voluntaristic perspectives.21 The proponents view failure as a continuum of events, actions and inactions which transmit through distinct phases leading to ultimate collapse.22 Although the issue of organisational failure has been very extensively explored by business history scholars,23 the demise of MFAs has been largely overlooked. Therefore, this study seeks to fill this void.
The evolution of multi-flag airlines in Africa A discussion of airline formation in the post-colonial era in Africa cannot be disentangled from the colonial governance systems which shaped countries’ policies. The colonial governance policies adopted by the French and the British in West Africa seem to have influenced and shaped the identities of the post-colonial state and institutions. While the French colonial policy of assimilation seems to have fostered more cooperation among the former French-administered countries, the British policy of indirect rule did not engender that. The former British-administered countries witnessed the dismantling of economic cooperation institutions and the tendency for each independent country to go it alone. While the former French-administered countries embarked on the formation of joint entities such as the Communauté Financière Africaine (CFA) Franc zone (FZ) (detailed discussion follows) and the formation of Air Afrique, the former British colonies were busy dismantling joint entities such as the West African Currency Board and the West African Airways Corporation.
We argue that the divergent approaches adopted by former French and British colonies were rooted in the policy of assimilation and indirect rule practised by the two powers respectively. The French policy of assimilation in Africa was rooted in the egalitarian philosophy which stresses the essential ‘unity of mankind’ in terms of human characteristics.24 Assimilation sought to not only centralise control over the matters of the colonial territories, but also to 4
eliminate the ‘parochial cultures and the creation of people who are peers and culturally undifferentiated’.25 Interestingly enough, the policy of assimilation suggested that equality, fraternity and freedom (liberty) should extend to anyone who was French. In the 1790s, these privileges were extended to residents of the province of Saint-Louis in Senegal.26 As time went on, colonialism went through several phases with the signing of the Berlin Act 1885 which formalised the process for the partition of Africa. These events culminated in what became known as the ‘scramble for Africa’. By the first half of the 20th century, France’s colonial territories had stretched across West Africa to encompass countries such as contemporary Burkina Faso, Benin, Guinea, Senegal, Ivory Coast, Mali and Niger with a Governor-General of French West Africa appointed to administer the Federation of French West African colonies and based in Senegal.27 By and large, the French initiated and introduced a much centralised federalist administration in their territory, a system of direct rule.28 For the French, the training centre for future administrators at the École Coloniale established in 1899 by Eugene Etienne, Under-Secretary of Colonies, became a major source of trained bureaucrats and administrators to help manage affairs in the colonies.29
Unlike the French, the British colonies were operated on the basis of indirect rule using local power holders, rather than establishing a whole new administration.30 The actual empirebuilders in the French context were military personnel, whereas the British ‘spreading out’ in West Africa was conducted primarily by merchants, missionaries and commercialists.31 The British policy reflected devolution of political authority to local agencies and gave them direct responsibility for the territories and to shape policies to meet local needs.32 Although the French passed the enabling law in 1956, which allowed local government for individual territories in West Africa,33 their notion of assimilation never ceased but rather continued in subtle ways to shape their policies in their former colonies. In this light, the approaches 5
adopted in the post-colonial era to a great extent reflected the policies of the former colonial power with the former British colonies pursuing policies of national control of industries, whilst the former French colonies moved towards collaborative arrangements.
Following the rapid disintegration of colonial rule, many African countries initiated policies geared towards reforming the institutional environment.34 For the first time, the newly independent countries took control of their own destinies from the former colonial masters. Although the colonial governments established air transport links across the continent and provided the platform for further development, the routes were largely geared towards transporting extracted raw materials to local ports and cities to be transported to Europe.35 Indeed, air passengers (just like a phone call from one ex-African colony to another) usually had to be connected through a Western capital.36 To the new nations then, aviation was seen in terms of a ‘social and political function in breaking down the isolation that stems from inaccessibility’.37 This resulted in the establishment of symbolic airlines with the aim of improving each country’s competitiveness in the face of global competition.38 In the post-colonial era, two main views emerged on governments’ attitudes towards MFAs; nationalism or multilateralism. On the one hand, the nationalist camp spearheaded by Kwame Nkrumah of Ghana saw MFAs as obstacles to their development in the ‘New Africa’. It was therefore perceived that single country autonomous airlines offered them the best chance to succeed. Proponents of this view argued that it was impracticable to make mutually acceptable decisions within the structure of MFAs and therefore could potentially pose insurmountable problems in satisfying the interest of individual states.39 For Ghana, this meant the withdrawal from the WAAC to establish an autonomous airline – Ghana Airways – following the country’s attainment of independence in 1957.40 This precipitated the collapse of the WAAC alliance as Nigeria and other members followed suit. Consequently, the various Anglophone West African countries such as Ghana, Nigeria and Sierra 6
Leone―invested millions of dollars in setting up independent airlines, acquiring new fleet, and servicing numerous and often uneconomical routes.41
On the other hand, the multilateralism camp which consisted of many former French colonies in West and Central Africa saw MFAs as a means to ensure their international success. As far back as the 1960s, and reflecting their colonial assimilation heritage, it was generally believed among such countries that given their limited resources and capabilities, MFAs offered them an effective mechanism of utilising their national resources and projecting their collective economic strength beyond their individual national borders.42 Some governments believed that the cost savings and economies of scale could lead to sustainable success in an environment which was dominated by autonomous firms.43 The scarcity of a high degree of managerial skills required for efficient and effective civil aviation at the time in West and Central Africa also forced the countries involved in the project to explore this new ownership type. In spite of the continued criticisms at the time by the nationalist camp that MFAs require ‘a clear submergence of national differences between the joint owners’,44 there was a widely held belief among the nations that the whole was ‘greater than the sum of the parts’.45 Although MFAs came to symbolise regional integration and co-operation between governments, they became effectively governmental agents and their operations differed from private firms.46 Their competitive edge in the marketplace was partly rooted in their ability to tap into government resources and capabilities. In anticipation of these benefits, the former French colonies in West and Central Africa established Air Afrique to operate on their behalf.
Air Afrique: a brief background At the Convention on Air Transport in Africa in Yaoundé in 1961, 11 newly self-governing African states (see Table 1) in former French West and Central Africa, agreed to bring their
7
scarce resources together to form Air Afrique.47 This was also necessitated by the fact that they lacked the indigenous private sector to sustain the operations of commercial airlines. These agreements which emerged from the Yaoundé Convention and laid the foundation for the formation of Air Afrique included not only countries of the former French West Africa (AOF) (with Dakar as the federal capital) such as Dahomey (contemporary Benin), the Ivory Coast, Mauritania, Niger and Senegal, but also countries of the former French Equatorial Africa such as Chad, the Congo, Gabon and Oubangui-Chari (contemporary Central African Republic).48 The states were once united in the federations to ensure the efficient colonial administration.49 They became the founders of Air Afrique by virtue of the 1961 Yaoundé Treaty signed in Cameroon50. The adoption of the Treaty was one of the first major attempts towards liberalisation of the airline industry in Africa.51 The Treaty established the fundamental principles which required states to designate the airline as the instrument chosen by each of them for exercising their air-traffic and transport rights in respect of international services. This enhanced their bargaining power in negotiating traffic rights within the framework of intergovernmental agreements. Consequently, the various negotiations allowed the airline to serve more routes between the contracting states and non-contracting states.52 This principle stemmed from the Chicago Convention on International Civil Aviation in 1944.
-----------------------------Insert Table 1 about here ------------------------------
The Treaty was created at the instigation of France and from the outset with notable French interests. The French government’s involvement was partly driven by the need to help the former colonies provide transport links to facilitate development and progress.53 The involvement of France was not surprising given that the economies of the former colonies were once regarded as an extension of the French national economy.54 The airline was
8
launched with 68.4% of the holding controlled by the 11 West African states, 11.8% by Air France, 8.9% by the French Development Agency and the rest by private stockholders.55 The Union Aéromaritime de Transport (UAT), which was subsequently renamed Union de Transports
Aériens
(UTA)
following
the
merger
with Transports
Aériens
Intercontinentaux, was also a stockholder and closely involved in the running of the airline.56 The countries that owned the airline changed over the years. As time went on, governments such as Togo and Mali, which were not party to the original agreement, also became members (see Table 1).
During its formation, it was agreed that the firm was to be managed in accordance with commercial goals and management to enjoy a full autonomy ‘untrammelled by any other consideration that does not contribute to the achievement of its objective under the best economic conditions while providing good quality service’.57 Throughout its history, the airline was seen as ‘the forerunner to a continent-wide Pan-African airline, particularly as it had long outlived several similar joint ventures’.58 Below is an Air Afrique advertisement in 1971, emphasising its distinctiveness and image as a symbol of African empowerment, pride and emancipation; a notion which was taking stronger roots at the time in Africa and among Black Americans (now African-Americans) in the USA (see Figure 1). It also sought to attract Black American customers by selling itself as an emergent black successful enterprise. This was done with the slogan: ‘Air Afrique. It’s black owned, black operated and beautiful’.59 The slogan: ‘Discover your heritage on Air Afrique’ is also telling as it used the word heritage to appeal and seek the patronage of Black Americans, the citizens of the member countries both at home and overseas, the African diaspora as well as from assimilation perspective former and current French residents in West and Central Africa. In this regard, it does acknowledge the contribution of the French to the building of the new nation states as well as the establishment of the airline (see Figure 1).
9
-----------------------------Insert Figure 1 about here ------------------------------
Although Ghana was the first sub-Saharan African country to begin the decolonisation process in sub-Saharan Africa in 1957, it was immediately followed in 1958 by Guinea.60 In September 1958, Guinea was the only country in French territory (colony) to reject an empire-wide constitutional referendum in favour of immediate independence.61 This set the pace for other French colonies to follow and within two years many of the colonies had gained independence. On the eve of independence, many French colonies signed a series of cooperation agreements with France in areas such as aerial navigation, air bases, economy, administration and military technical assistance.62 Some of countries were members of the Council of the Entente, a group established by Dahomey, the Ivory Coast, Niger and the Upper Volta with the backing of the French government in May 1959. The primary purpose of the Council was to coordinate the economic matters and foreign policy of the member states in areas such as customs union, taxation and public administration.63 The original objectives expanded to include the integration of the region and providing the platform for economic growth to emerge. It was believed that the Council would formulate policies for integrating their economies, manage the decolonisation processes and develop the capacity to reduce the potential dependence resulting from legacy institutional structures.64 These go a long way to explain the rationale behind the countries’ decision to form the airline given that they were barely two years old.
One great legacy of French colonial rule was the introduction of common currencies within the colonies. The CFA Franc zone (FZ) dates back to the first half of the 20th century and was a monetary cooperation arrangement between the former West and Central Africa colonies and France, with the CFA franc as a currency.65 However, in the various separate economic and monetary agreements between France and the newly independent countries in
10
1962 known as the African Financial Community many of the principles of CFA were kept.66 Most of the former French West African colonies that gained independence opted to maintain links with France and thereby continue the pre-existing economic and institutional arrangements. Guinea, which was endowed with natural resources such as bauxite and iron ore, opted out of the system.67 On 1 March 1960, the country formed its own currency and a central bank.68 Under the agreement, France provided the CFA members with unconstrained ‘access to foreign exchange and guaranteed convertibility of their common currency, the CFA franc, into French francs, with complete freedom of transfer in both directions, and without the restraining factor of being required to maintain a minimum reserve in Paris’.69 This meant that the colonies continued to enjoy the guaranteed preferential prices which had existed during the colonial period. The French, on the other hand, also gained virtual monopoly for their manufacturers of goods such as sugar, machinery and textiles. The FZ was like a system, where the newly independent countries including seven from West Africa (i.e. Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal and Togo) and five from Central Africa (i.e. Cameroon, Central African Republic, Chad, Congo and Gabon) were clustered around France.70 The system was constructed partly to keep the links between France and the colonies,
and
was
‘instrumental
in
perpetuating
and
increasing
these
states’
underdevelopment and dependency on France’ as well as impacting on the airline’s operations.71 However, the CFA franc, in relation to the French franc was always ‘overvalued’.72 This meant that workers including French nationals employed on fixed salaries in CFA Zone African countries were able to repatriate their savings to France. The practice, known as ‘faire du franc’, became a common feature of currency flow to France, but the extent of the
11
practice was never accurately established.73 As demonstrated below, this arrangement had significant effects on Air Afrique’s operations. Air Afrique’s stages of failure This section explores the fortunes of the airline from its creation in 1961, growth and ascendency (golden days) to is decline and eventual collapse in 2002. During its lifespan Air Afrique had a reputation for efficient service and was well recognised as a symbol of regional integration. But by the late 1990s its reputation was in tatters and the airline was on the verge of collapse. We argue that the factors that contributed to the failure had their origins in the conception stage. In this respect, we further argue that the failure was decades in the making with several unsuccessful attempts made by the national governments to generate a turnaround. Below is an analysis of key events during what we classify as five distinctive phases of the firm’s history or evolution. Table 2 illustrates the sequence of activities and events which precipitated the demise of the airline.
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The golden phase (1961–1979) On 28 March 1961, the signing of the Yaoundé Treaty laid the foundation of Air Afrique. Three months later, the Constituent Assembly of the airline unanimously nominated Mr M. Sheikh Fal, a former Secretary General for Transport and Telecommunications of Senegal, as the inaugural President (figurehead) of Air Afrique.74 From its inception, the airline set itself the task of becoming a major, if not the leading, player in the aviation industry in Africa. The newly emergent nations agreed for Abidjan, a leading urban and commercial centre of West Africa at the time, to become the main hub and head office for the airline’s operations. In the face of Pan-Africanism sweeping across the ‘New Africa’ at the time, the states deployed their resources and sought managerial and technical expertise from beyond their 12
national borders in particular, and Africa and overseas. They sent their Ministers to Western capitals to entice highly skilled personnel to its headquarters in Abidjan to help run the operations. Their success was particularly impressive as the governments had little history and experience in enticing nationals of the former colonial power back to Africa to run any industry or organisation. This was, however, considered necessary to meet the challenge of commercial aviation and growth in the 1960s.75 In addition, the involvement of France in Air Afrique’s formation paved the way for its cooperation with two French companies; Air France and UTA. The two companies were invited by the contracting states to bring their expertise in international aviation to help manage the operations as well as train the administrative and technical personnel. Three months after the signing of the Yaoundé Treaty, UTA leased 12 DC-4 aircraft to the airline and provided most of the technical expertise including pilots and technical crew which helped to lay the groundwork for Air Afrique’s success in the international arena.76 The cooperation and assistance received from the French Airlines provided a springboard for expansion across Africa and Europe.
With the financial backing of the governments, the airline embarked on an ambitious statusseeking expansion programme spanning several routes in Africa, North America, Asia and Europe. This was to help project its image and signify an emerging and united Africa. From 1964 to 1967, the airline launched services to lucrative routes such as Geneva and New York with the collaboration of Pan Am.77 The airline’s cooperative ventures were given a further boost by the initiatives of African leaders in the early 1960s to create the so-called United States of Africa, a vision supported by many francophone countries. Air Afrique was seen as a shining example of this noble aspiration and as such financial resources were deployed to support its expansion.
By 1971, with an array of aircraft and expertise from the French airlines in hand, the airline emerged as a regional giant with destinations cross the globe. Aircraft upgrading and 13
replacement continued throughout this phase and by 1973, it was operating DC-10s for both cargo and passenger traffic (see Appendix 1). Within a decade after its formation, the airline established the transatlantic Dakar–New York route to serve the needs of its growing passengers. This was followed with a collaborative ground-handling agreement with Pan-Am in New York. Another major development was the introduction of its Kinshasa–Abidjan– Monrovia–Dakar–NY route. Other routes connecting African English-speaking cities such as Accra, Lagos and Nairobi to Air Afrique’s network for transfers to destinations in France, Italy and Portugal were also introduced.78 Interestingly, the expansion of the airline’s routes extended to numerous Western and African capitals with which the former francophone countries had limited trade and investment links. To a lesser extent, some of these expansions were attributed to the competition with Ghana Airways to become the dominant international airline for all of sovereign Africa. During this period, the expansion of route networks, expertise and close involvement of the French in the management and, control yielded dividends for Air Afrique and, avoided the declining revenues and escalating costs and conflict that besiege other airlines in the emerging Africa.
The first three decades of its existence were generally seen as Air Afrique’s golden days as the early years following its formation led to the expansion of its fleet and capacity.79 From 1966 to 1985 the airline recorded significant increase in passenger numbers and this represented the apogee of its fortunes. During this period, the passenger traffic grew from 300,587 to 757,323. To an extent, it fulfilled some of its original ambition of being seen as a sign of regional integration and progress.
The reality behind Air Afrique as Africa’s symbol of post-colonial unity did, however, begin to materialise. But, the Pan-Africanism ideal and goal of regional integration faltered in the 1970s when two richer member countries withdrew from the consortium. Cameroon withdrew in 1971 followed by Gabon in 1977 to establish their own airlines due to 14
geopolitical reasons, thus depriving Air Afrique access to two of its major markets.80 For Cameroon, one of the central pillars of its foreign policy in 1970s was ‘non-alignment’ with respect to western countries and former colonial powers.81 Consequently, the country concluded that Air Afrique was serving the interests of the French government and Air France rather than the contracting states. The withdrawal was seen as part of broader attempts by President Ahmadou Ahidjo to ‘break the umbilical cord tying’ the country to France.82 This was accompanied by the renegotiations of many bilateral agreements in areas such as education and structures of government ministries which were seen as legacies of French rule and domination.83 Notably, the cessation of ties was a major blow to the airline because Cameroon was the first member country where Air Afrique operated domestic services to cities such as Yaoundé and Douala. It was one of the very few countries in Africa at the time that possessed cities developed enough to make scheduled domestic flights viable.84
By the same token, Gabon also withdrew from the group to establish an autonomous airline to promote their national flag and identity. Indeed, Cameroon, alongside Guinea and Gabon were among the first of the former French colonies in sub-Saharan Africa that sought to lessen their ties with Paris. In spite of these withdrawals, the airline was still regarded as an African success story with a promising future. But this took a dramatic turn that heralded the beginning of the decline when the Africanisation policy was introduced.
Africanisation policies (1980-1989) Africanisation was a human resource management practice of replacing expatriates with indigenous staff (black Africans) in organisations in the early years of the post-independence period in sub-Saharan Africa. This stage was a turning point in the airline’s fortunes. Prior to the 1980s, French expatriates who occupied key positions in the top-management team were able to resist political pressures from the African governments.85 By the early 1980s, with the Organisation of African Unity (OAU) firmly in place and with Pan Africanism on the 15
ascendency and the influence of assimilation on the wane, many employees and the states with strong nationalistic tendencies saw the involvement of France in the management of the airline as a hindrance to its progress and development.86 This led to increasing demands for a minimal involvement of French nationals and for them to be replaced with indigenous staff.
Although the French trained a number of local officials, they were not sufficiently equipped to run the large-scale operations of the airline. Unlike the expatriates, the locals were not insulated from political pressures and lacked the managerial and technical expertise as well as the knowledge required to run such an international operation. This process of Africanisation was accompanied by initiatives aimed at promoting the national interests of the contracting states at the expense of the airline. The assembling of indigenous personnel was accompanied by strong political influence which permeated the whole structure of the organisation.
In addition, the apportion of blame to French nationals under the Africanisation policies became so intense that in 1984 a protracted industrial dispute resulted in the dismissal of 56 French nationals who were seen to have instigated the strike.87 Although other local flight crew and staff were dismissed as part of this mass dismissal, the crisis provided the opportunity for the management to pursue their Africanisation policies further. Attempts to galvanise union support for the workers to end the strike failed and this disrupted the entire operations of the airline. Although as far back as the late 1960s, Africanisation was causing minor problems with promotions and appointments based on political connections rather than merit,88 this had changed fundamentally in its intensity by the mid-1980s.
The top management team based on nationality (member state) quotas that emerged after the Africanisation policies yielded inadequate expertise and created information processing deficiencies in strategic formulation. This in turn resulted in a number of strategic errors such as misdiagnoses of the deep-seated problem of lack of managerial and technical expertise.
16
Such conditions led to commitment to wrong courses of action and strategic errors thus precipitating organisational failure.89 This was, indeed, the case with Air Afrique. By the late 1980s, the Africanisation of the airline was complete, with Africans occupying all top administrative posts. As the Africanisation agenda proceeded, the lack of skilled personnel began to pose major problems for the airline. The airline began to experience performance decline and escalating commitment.90 By the late 1980s, the airline had accrued debts of around $120 million. This was compounded by declining revenue streams as civil servants and their personal friends travelled on multiple occasions for free.91 The company was in danger of bankruptcy as the decentralised management structure (associated with Africanisation) led to a lack of direction.92
The need for robust management of the airline was recognised in the 1980s, and the French government stepped in with financial backing and the introduction of a new management team headed by a Frenchman, Yves Roland-Billecart, as Chairman and Chief Executive. The Africanisation had created much friction within the organisation such that when RolandBillecart and VP-Personnel Paul-Henri Gindre (another French citizen) were appointed; they had to assure employees and the airline’s owners that the firm would only appoint foreign nationals when no African was deemed qualified, competent and appropriate to do the job and that the sole criterion in personnel selection policy was competence.93 Subsequently, a small number of expatriates were appointed as managers. Under their leadership, the firm began a process towards rediscovering its past glory with a series of organisational changes and transformation aimed at reducing costs and bringing the airline back to some level of profitability. In line with this objective, the new management immediately instituted a costreduction strategy, which entailed a 30% reduction in the 5,800 workforce.94 This created a wedge between the trade unions and the management team, when Yves Rolland-Billecart sacked 1,600 staff in the early months of his tenure in 1989.95
17
While the management’s attention was focused on the organisational restructuring, problems were brewing on the commercial front. Air Afrique was beginning to face stiff competition on its routes. For instance in 1983, Air Afrique Council President Djalla Poli warned about the dire consequences of the uncontrolled growth of charter flights (to Abidjan and Dakar in particular) which was beginning to threaten Air Afrique’s survival.96 Competition from other national, foreign and charter airlines such as Ghana Airways and Nigeria Airways squeezed the revenue on key routes, and the marked economic decline in member states contributed to the weakening position of the firm in the 1980s. In 1989, member states adopted a Rehabilitation Plan spearheaded by the African Development Bank aimed at settling its overdue payments, cushioning future instalments and financing aircraft maintenance.97 The plan called for a $180 million cash injection, the sacking of 2,000 of the 5,634 employees and member governments restricting the competitive environment by limiting traffic rights granted to other airlines in the region.
Although the plan indicated internal restructuring, many of the proposed solutions focused on restricting competition and hence largely ignored the internal organisational problems. Similarly, at the general assembly in 1985, under the leadership of Aoussou Koffi of the Ivory Coast, the airline attributed its problems to mainly external factors such as rising fuel bills and uncontrolled growth of competing charter flights to the key profitable routes (Abidjan and Dakar) as the cause of its outstanding debts of more than $250 million.98 To respond to the increasing competition on key routes, the airline attempted to seek a ‘fairer’ arrangement with some of its competitors including UTA, to reduce competition on profitable long-haul routes to Europe.99 The overwhelming emphasis on protective measures to secure the airline’s future was surprising given that in 1988, African countries had adopted the Yamoussoukro Declaration (YD), which originated from the Yamoussoukro Convention on Market Access for Air Transport in Africa as Africa’s plan of action for liberalisation to ease
18
all air transport restrictions.100 Consequently, access to previously restricted and profitable routes was opened up to competition.
At this stage, the management under Yves Roland-Billecart continuously emphasised limiting competition on routes to help secure the airline’s future. It was believed that Air Afrique’s future was partly dependent on restricting competition from not only the 15 major West European airlines operating in the region including Air France, UTA, British Airways, KLM, Sabena, Swissair and Iberia,101 but also other West African carriers such as Ghana Airways and Nigeria Airways. A great deal of attention was devoted to finding means to deter competition but this fruitless exercise failed the test of time as Air France and others’ quality of services, prompt and reliable services, attracted a huge number of passengers on Air Afrique’s traditional routes.
-----------------------------Insert Table 3 about here ------------------------------
As summarised in Table 3, the net income of the firm declined from CFA 367 million in 1989 to 265 million in 1992.102 Following this period the firm tipped into the red in terms of net income in 1993. Although revenue from flight operations was increasing throughout the period, they were outpaced by a sharper growth in expenses. The exodus of the white French nationals from the top of the organisation coincided with the flight of managerial and technical expertise. Therefore, the future of the airline henceforth depended on largely nonexistent local expertise. Despite the declining revenue (see accounts) and market share, the airline maintained much of its international operations partly due to resistance from the member countries. In October 1986, it received a Boeing 747-123 followed by Airbus A300s and A310s and acquisitions of Boeing 707s, 737s and the Russian Antonov 12.103 Appendix 1 provides details of all the aircrafts delivered in the 19980s and the subsequent years.
19
Scandinavian Airlines System (SAS) is a striking example of another multi-flag airline that managed to enjoy success relative to Air Afrique partly due to its responses to liberalisation. Although deregulation and liberalisation have progressed at a different pace in Europe and Africa, the gradual market reform which culminated in the Single European Market in 1997 triggered changes in employment in air transport.104 It led to the demise of lifetime employment and high pay conditions. In 1991, for example, SAS announced lay-offs of 3,500 staff aimed at driving down costs and increasing efficiency.105 The transformation of employment conditions in Europe and the inability of Air Afrique to overcome political interference and resistance to the reduction of its staff numbers may help to explain the contrasting fortunes of the two multi-flag airlines.
Escalating indecision phase (1990–2000) The phase of stalemate and cycles of perpetual decision-making at the airline can be referred to as the ‘escalating indecision’ phase.106 The organisation appeared to be trapped in cycles of gridlock of unending decision-making and implementation, where report after report reached the same conclusion that the airline was losing money and therefore major restructuring was required. Consideration of proposals for potential injections of private capital into the carrier usually required executive meetings of ministers of the member countries and heads of states.107 Although the desire to incorporate members’ views in the strategic direction of the firm was welcomed, the continued referral of issues such as staff levels, to meetings of government/ministers of member states created a bureaucratic organisation, which was incapable of shaping its own future. The prolonged period, where the top-management team and the states continuously diagnosed, failed to take action, re-diagnosed, unmade, and remade strategic decisions meant that for decades attention and resources were deployed to finding the airline’s problems, but implementation faced major obstacles and bureaucratic inertia, and proposed changes largely failed to materialise. The Board of Directors was
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composed of people from the sovereign states and they all did not always have a common interest. Under the Yaoundé Treaty, decision-making was by consensus and this was not always to the benefit of the airline. As the World Bank puts it: ‘The deficiencies in the decision-making process, resulting from the practical obligation to reach a consensus prior to all major decisions has been a paralyzing factor affecting the multinational (multi-flag) airline’s ability to respond to the challenges of a rapidly changing economic environment’.108
However, decision-making was often a protracted process and often consensus never emerged due to ‘outside uncontrolled events’.109 The absurdity of decision-making process was epitomized by the excessive number of directors. For instance, Air Afrique had 32 directors whereas a leading Fortune 500 listed firm such as General Motors had around 15.110 Although the owners were adept at expressing their concerns and interests to the governing boards on numerous occasions, they largely faltered in simultaneously committing sufficient financial resources to help turn around the airline. In 1984, for instance, an estimated $50 million of membership contributions were unpaid and hence owed by the states.111 During the 1980s and then in the 1990s, some of the member states were amongst the poorest countries in the world and lacked the funds to sustain large-scale loss-making operations.
In the late 1990s, the appointment of Sir Harry Tirvengadum, former head at Air Mauritius, as the new chairman raised hope that Air Afrique would become one of the few African airlines at the time to have freed itself from state control.112 Prior to this, a previous chairman Yves Roland-Billecart had proposed a rescue package which would have required the states to provide CFA1 billion each, with an additional CFA20 billion from Asecna (the interstate agency which oversaw aviation safety and navigation among the states). The implementation had, however, been anaemic, facing resistance from employees and the national governments. In this case, the states failed to provide the required funds and the recovery plan was
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abandoned.113 Below, we elaborate the issues of overstaffing and scapegoating leaders, which were also closely associated with this phase.
Overstaffing Over-staffing affected the airline throughout its life. When the airline was founded, the contracting states contributed to the majority of staff with many based in the country offices. In the 1990s, of the 4,300 in the workforce, the majority were from the Ivory Coast and Senegal – around 800 each – followed by Benin and Burkina Faso, with an estimated 400 each, with the Central African Republic and Mauritania among the countries with the fewest nationals in the airline.114 Restrictions were, however, imposed by governments on the dismissal of redundant or unproductive employees for political reasons. In terms of organisational structure, the nationals of the contracting states held eight of the 12 vice– presidencies. Although the headquarters of Air Afrique was in Abidjan, a number of its workers were based in the various countries and it was in the interest of the governments to insist that reductions in staff numbers had to come from ‘elsewhere’. But the most damaging was the Ivorian government’s insistence that reductions must be equally shared. The conflicting interests meant that staff numbers were historically overblown to accommodate those various interests.
Although some parts of Air Afrique had shown signs of decline (such as shrinking revenues and an increasing number of unprofitable routes) as early as the 1970s, it was not until the late 1990s, when Yves Rolland-Billecart arrived as the chief executive, that the airline began to address seriously the increasing staff numbers by firing 1,600 personnel. When such large dismissals of personnel occurred it was perceived by many employees as a breach of the psychological contract that had existed between the employees and employer. Psychological contracts refer to the unwritten or unspoken expectations widely held by employers and employees about the nature of their work relationships. It is the ‘individual beliefs in a 22
reciprocal obligation between the individual and the organisation’.115 In other words, it is what employers expect their employees to contribute and what the employees expect to get in return.116 In the case of Air Afrique, the psychological contract was a reciprocal promise to the employees to accept less favourable terms of employment and pay in exchange for lifetime employment. From the 1960s through to the 1980s, the employees were afforded the job security of ‘government jobs’ and lifetime employment. The notion of job security rooted in the state employment and promises by the states created the expectation of jobs for life. An expectation was also created by the trade union in their negotiations with the airline that a reduction in strikes would in return be rewarded with secured long-term employment.
Confronted with the commercial pressures to reduce overstaffing and improve productivity, the firm began to abandon lifetime employment and favourable employment terms. The pursuit of profits and hence the economic viability of the firm by management which resulted in large-scale redundancies were seen as a betrayal and breach of the psychological contract and an abandonment of the reciprocal expectations. This seriously undermined the employee loyalty and commitment to the airline and was seen as the final straw in the firm’s ‘job-forlife’ culture. The employees had expected their loyalty and hard work would be reciprocated with long-term employment and reward. This development gave birth to employees’ obduracy which in turn resulted in the organisation of a number of protests across the member states’ capital cities and producing friction between the airline and its employees which continued for at least a decade. Indeed, in 1996, a tense standoff between management and unions led to the sacking of chief executive Yves Rolland-Billecart (1989-1996).
Scapegoating leaders In the late 1990s, the airline was diagnosed as suffering from ‘low-volume routes, labour strife and deepening political differences among its members over the company’s future’.117 This led to emergency meetings by ministers of the 11 countries and heads of state to discuss 23
the strategic direction. As far back as 1996, the then French executive director, Yves-Roland Billecart, observed that the airline as near bankruptcy and the only option for the airline was an alliance with Air France which would have led to joint schedules, yielding potential savings of around $70 million a year for the two companies. Air Afrique employees (including pilots, flight attendants and ground-crew) strongly opposed this solution, however, arguing that the ‘airline is worth saving only if it can retain an African identity’.118 The multiflag ownership with the backing of the French government led to a false belief among the trade unions and employees that, given the unique status of the airline it was somehow indestructible, which contributed towards the intense resistance to change exhibited by them.
In an unprecedented move, the employees accused the top-management team and the chief executive, Mr Billecart, of having the interests of the European companies, notably Airbus and Air France, at heart and that these had shaped his strategic choices.119 They condemned his decision in 1990 to sell the airline’s fleet of McDonnell Douglas DC-10s and to purchase new Airbus A310s, which were considered unsuitable for the airline’s needs and operations at the time.120 In addition, Air Afrique helped Air France to avoid a 20 per cent default penalty by taking its orders of Airbus planes, which was seen by employees as an example of the French influence in the management and strategic direction of the airline.121 The former colonies have been historically reluctant to challenge the French influence in the management of the airline. This was partly due to lingering colonial attitudes and the French ‘tendency to intervene in their former colonies to install (or re-install) leaders whose views and policies are consistent with French interests’ exemplified by its actions such as Chad in 1969, Central African Republic in 1979, Gabon in 1964 and Zaire in 1977.122 One of the consequences was that the leaders demonstrated their gratitude by not challenging French domination of their countries.
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In spite of the fierce criticism of Air France by the Air Afrique employees, the French government continued to inject financial capital into Air Afrique and encouraged nationals to help turn around the ailing entity partly due to the historical relationship between the states and France. Following trade unions’ demands for a change of the entire management team, ministers of transport of the carrier’s owner nations decided to sack the chief executive, Yves Rolland-Billecart in 1996.123
Perhaps the most contested aspect of this whole sorry affair has been a long tradition of scapegoating of the French nationals as being the source of the problem (exemplified by the Africanisation policy) and serving the interest of Air France, which was in competition with the firm on many of its route networks. Some employees argued that the organisational resources were not allocated to profitable routes partly because of Air France’s presence (holdings on the board) and the reluctance by the board to engage in direct and intense competition with that airline.124 The concerns demonstrated that there was insufficient glue to bind the employees to reform, which was necessary to help ensure the long-term survival of the firm. A strong nationalistic tendency contributed towards this intense resistance to change by the employees.
Escalating commitment phase (1990-2000) Escalating commitment refers to the propensity of organisations to commit additional resources to failing courses of action.125 The phenomenon of the escalating commitment within the firm needs to be understood within the wider ownership structure and divergent interests of the national governments. Sir Harry Tirvengadum shed further light on the political influence of the states and Air France when he asserted that the airline had been ‘open to political interference from its 11 state owners in West Africa and with Air France (and therefore the French Government) making them the dozen’.126 He observed that
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the airline had to address the interests of a dozen states, with France exerting pressure on its operations.127 In addition, compulsory services on unprofitable routes to member states’ capitals exacerbated the financial problems of the company.128 One of the primary aims at the launch of the company in 1961 was to link the capitals of member states with air transport services.129 Services to the capital cities of the contributing states were not, however, grounded in economics. The decisions of whether to discontinue or add new routes were largely driven by the countries’ desires to maintain flight connections to their important cities at all cost. The decision to persist with loss-making routes stemmed from the management’s inability to terminate services without the consent of the states, which in any case were reluctant to allow services to their countries to cease.
The carrier received financial and non-financial supports from the governments such as subsidies, debt forgiveness, exclusive access to travel agents and lucrative slots to Western destinations from the governments to help sustain the operations of the airline. The countries believed that the demise of the airline would lead to a surge in unemployment and loss of their highly skilled engineers, pilots and ground-handling staff. The carrier was seen as integral to the pan-African movement. It was also believed that low traffic demand in some of the national capitals would lead to the discontinuation of air services which was unlikely to be filled by the private sector and therefore the need for the multi-flag carrier.
The
governments resisted attempts to privatise the airline partly due to the conflicting interests of the states. These developments led to the ‘escalating commitment’ to such routes and forced the organisation to enter and perpetuate the ‘escalating indecision’ phase.130 The airline had indications from the chief executives, from Yves Rolland-Billecart and previous chief executives that it was overstretching its limited resources to loss-making routes and needed to change. These warnings were ignored by member states and the top management could not 26
act on its own. The inability of the top-management team to change direction and hence to persist with this failing course of action was rooted in the political interference by the member states and in particular their resistance to reduction in the workforce. The states had no desire to increase unemployment by agreeing to large-scale staff reductions.
However, the airline also registered successes in withdrawing from some unprofitable routes in Europe. For instance, in 1995 it eliminated loss-making destinations such as Geneva, London, Marseilles and Nice.131 These reductions occurred after they had already drained millions of dollars of financial resources, and were therefore insufficient in transforming the fortunes of the airline. Another barrier to implementing a large-scale reduction in staff numbers was the belief that there were sufficient slack resources within the organisation and that the 12 states (including France) could buffer the airline from any external shocks to its operations. This proved accurate for some time but as time went on the cost of sustaining such loss-making operations made member countries reluctant to put in any additional funds, forcing the airline towards liquidation. This phase also witnessed extreme external shocks such as the devaluation of the CFA which further eroded the competitiveness of the airline and compounded its problems.
(i) Currency devaluation On 12 January 1994, the Heads of State of the CFA franc zone countries decided overwhelmingly in Dakar to devalue the currency by 50% in order to restore their export-led growth and poverty alleviation drive which were collapsing.132 Prior to the mid-1980s, the franc zone nations experienced solid economic growth and the CFA franc was the currency of choice for cross-border traders due to the unstable currencies of neighbouring Ghana and Nigeria.133 By the mid-1980s, the political demands of CFA zone governments forced the partly state-owned banks to lend to unviable state-owned firms, which precipitated the collapse of the banking system.134 In the early 1990s, almost all the countries in the currency 27
zone went into deep recession as majority of the banks collapsed and this subsequently led to devaluation of the CFA. Although the CFA franc zone brought price stability, convertible currency and overdraft facilities for the countries, overvaluation of the currency relative to other sub-Saharan African currencies and more importantly the US dollar forced the countries to devalue.135
The currency integration dates back a long time, however, it was not until the early 1990s that the full effects of the CFA on Air Afrique’s operations became evident to the contracting states. Between 1991 and 1993, the airline borrowed millions of dollars to procure four Airbus A310 fleets to launch new services. By 1994, however, the debt more than doubled suddenly when the regional currency, fixed/pegged to the French franc, was devalued by 50 per cent.136 Devaluation meant that debt repayments were overwhelmingly inflated overnight. The CFA devaluation dramatically increased Air Afrique’s strong currency debt burden and operating costs.137 The problem was very severe because at the time around 65% of all expenses were paid in foreign currency and their revenues were mainly denominated in CFA francs. This sudden turn of fortune was unfortunate given that the airline had no influence over the currency issue, which led to debt defaults and seizure of a fourth of its fleet. The airline survived this deteriorating financial position partly by the governments’ financial capital injections. Indeed, between 1993 and 2001, the airline was bailed out four times by the key stakeholders.138
-----------------------------Insert Figure 2 about here ------------------------------
As the decades passed, it became increasingly clear that the debt levels had become unsustainable and the firm was suffering from high operating costs. Although the arrival of Yves Roland-Billecart and Sir Harry Tirvengadum in the 1980s and 1990s as chief executives raised hopes, numerous external factors such as high fuel prices, increasing competition
28
through bilateral arrangements and new rights granted under the YD represented insurmountable obstacles in their ability to generate recovery. Figure 2 shows that the airline's share in terms of passenger traffic on long-haul market/routes and market share began to fall dramatically from 1998 in face of competition mainly from Air France.
Dissolution phase (2000–2002) In November 2000, the World Bank and the Finance and Transport Ministers of the member states met in Washington, which led to the adoption of the ‘Washington Consensus?’139 The World Bank-led plan was articulated in two distinct phases backed by an appointment of a new management team: stage 1 entailed the design and implementation of a restructuring plan aimed at reversing the loss-making operations. This was supposed to be completed within 12 weeks.140 The second stage was supposed to last around 14 weeks leading to the privatisation of the airline.141 In January 2001, with an $800,000 World Bank grant in hand, shareholders invited an American air-transport consulting firm, Simat, Helliesen and Eichner (SH&E) to examine the airline. They found that: ‘The company's accounting system had shut down in 1999, so that it produced no accounts; local offices ran their own finances; many passengers travelled free; and almost every flight was either late or cancelled. The timetable was not changed even after exasperated creditors had repossessed three aeroplanes’.142
However, when the World Bank put forward the recommendations for privatisation by SH&E as a means of restoring the airline back to prosperity, this was largely rejected by the key players – employees and the states. Historical records offer considerable insight into the level of over-staffing in the final years of the firm’s demise. From the late 1990s to early 2001, the airline employed around 4,200 employees to operate eight aircraft, whereas European budget carrier EasyJet operated 21 aeroplanes with 1,400 staff.143 In the final year of its operations, the following quote illustrates the deep-seated nature of the airline’s problems:
29
‘Despite empty coffers and a small six-aircraft fleet, the troubled carrier retains 4,000 employees on its payroll’. 144
This made Air Afrique one of the world’s most over-staffed airlines.145 Declining demand had rendered several routes unprofitable, but the troubled carrier retained the same level of staff on its payroll.146 Accordingly, it was saddled with unsustainable debt and poor-quality services.147 By mid-2001, the airline’s ability to mobilise resources from states and the state’s willingness to foot bills for the loss-making operations had waned considerably. Perhaps the most intriguing issue was the realisation that the numerous attempts to avert disaster had failed. As failure loomed, managers attempted to seek private capital which included the potential of Air France’s acquisition, alliance or merger with Air Afrique to help eliminate the duplicated activities.
Other lingering internal problems also precipitated the collapse of the airline. For instance, around mid-2001 about 40 per cent of passengers travelled free because they utilised political clout to gain tickets.148 The following quote captures the alarming problems that began to escalate and threaten the existence of the firm. ‘Air Afrique’s descent was precipitous. Nepotism, corruption, the contraband of tickets, the seats handed out to governments that never paid, the business class seats that were reserved for ministers’ girlfriends – all these problems ... were obvious to all’.149
Even on the verge of collapse in 2001 and in the midst of debt of around $431m, many employees saw the airline as an ‘African success story’.150 Gaining employees’ commitment and minimising resistance to reforms were essential in delivering the kind of reforms needed to turn around the firm, but this failed to materialise. In the last few months of its operations, the airline was besieged with problems such as lengthy delays, stranded passengers and poor baggage handling operations which forced many potential passengers to desert it. Following 30
decades of operations and failure to fulfil its original aims, Air Afrique went into bankruptcy in 2002 with a debt of US $458million signalling the failure of the joint ownership structure. The complicated process of closing down the firm began with the laying-off of employees who had spent decades in the firm. For a firm which was seen as a torchbearer of African unity this was an ignominious end. The demise marked the end of a chapter in Africa’s aviation history. The slow lingering collapse of Air Afrique left a vacuum for carriers across Africa to battle for and replace the lost capacity. The following quotes attributed to Abdoulaye Wade, a President of Senegal, in an interview with the Dakar daily Wal Fadjiri (March 1996) captures the life story of the airline: ‘Air Afrique was a toy of the post-independence era, and we used to be very proud to see its name written on the side of the aircraft. But the shorter a joke lasts, the better’.151
Discussion and conclusion The article set out to examine the demise of a multi-flag airline, Air Afrique. The demise is entrenched in decades of mismanagement, overstaffing and the implementation of Africanisation policies that deprived the firm not only of an opportunity to acquire skilled personnel, but also accelerated the loss of experienced and competent French expatriates. Deterministic factors such as liberalisation and the depreciation of the CFA franc in 1994, which were beyond the control of the executives, doubled its debts and helped to seal the fate of the firm. Although some of the organisational problems were discovered at the embryonic stage, resistance by employees and conflicting interests of the states meant that actions taken were largely anaemic at best. As shown in Figure 3, the study identified five distinct features in the demise of the airline.
-----------------------------Insert Figure 3 about here ------------------------------
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The findings lead to the conclusion that prior to the 1980s Air Afrique’s mainly expatriate management was less amenable to political influences of the contracting states and as such this golden phase (1960- 1979) experienced significant growth in the number of routes and fleet. During this period, appointments were made largely based on competence, which to a great extent changed with the advent of the Africanisation concept in the 1980s. This paved the way for political influences in the airline’s operations and the replacement of competent French expatriates with locals/nationals of the member states, whose appointments were largely based on political connections rather than competency alone. Another contributing voluntaristic factor was the airlines’ inability to achieve consensus on staffing levels and routes. This escalating indecision phase lasted two decades (i.e. 1980– 2000). Resistance to needed reforms and organisational change by the member states stifled the management’s ability to generate a turnaround resulting in a concurrent escalating commitment phase (1980–2000). This phase was characterised by under-utilisation of fleet, idle employees and declining revenue (partly due to poor services) seeped into the organisation. Consequently, the airline advanced towards a downward spiral, which became increasingly difficult to turn around due to the deep-seated political influence that had permeated the structures. These factors cumulatively contributed to the demise of the airline. The paper demonstrates how decision-makers’ inability to change courses of action (constrained by stakeholders’ power) led to an escalation of organisational commitment to failing courses of action. The inability to terminate unprofitable routes, overcome governments and employees’ intransigence became major obstacles for the business. The topmanagement team became trapped in a course of action dictated by external demands to project the image of the states i.e., ‘fly the flags’. Governments’ obstinacy to accept staff reduction hampered the cost reduction and recovery plan. The dissolution phase (2000–2002) saw attempts to generate an eleventh-hour solution to the problems. During this stage, it
32
became abundantly clear that the long-drawn-out process of the firm’s decline was coming to an end, when member countries could no longer sustain the loss-making operations. From a theoretical standpoint, the paper has delineated the features of the concepts – ‘escalating indecision’152 and ‘escalating commitment’153 in the process of organisational exit by dissolution. The paper extends the literature on the use of these concepts by demonstrating how they exhibit themselves in the process of organisational decline leading to eventual death. In addition, the study revealed five phases in the firm’s demise which illuminate our understanding of how organisations fail and how we can learn from the failure of others.154 This has provided further insights towards helping organisations avoid ‘learning the wrong lessons from history’.155 Although some of the seeds of the airline’s demise were present at its inception, throughout its lifespan the issue of conflicting interests of the various states was largely left unaddressed. The findings here have led to the conclusion that the establishment and operation of a multiflag airline necessitates a clear ‘submergence of national differences’ to create space for the organisation to prosper.156 The diffused power structure and divergent interests of multiple stakeholders led to organisational over-commitment and inability to reverse the process of decline. The lesson here is that for multi-state commercial organisations to succeed they should seek to assemble teams composed of individuals of diverse and balanced capabilities, not based on just a quota (non-meritocratic), as Africanisation sought to do.
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Onishi, Norimitsu. “Troubles Tarnish a Once-Shining African Airline”. New York Times June 20, (2001): 39. Pirie, Gordon H. “Aviation, Apartheid and Sanctions: Air transport to and from South Africa, 1945– 1989”. GeoJournal 22, no. 3 (1990): 231–40. Pirie, Gordon H. “Southern African Air Transport after Apartheid”. Journal of Modern African Studies 30, no. 2 (1992): 341–48. Planespotters “Air Afrique fleet details and history”. Berlin: Planespotters. September 1, 2010. http://www.planespotters.net/Airline/Air-Afrique#AirlineFleetList. Robinson, Olive. “Employment Policy and Deregulation in European Air Transport”. Service Industries Journal 14, no.1 (1994): 1–20. Rodney, William. “The Entente States of West Africa”. International Journal 21 (1965): 78–92. Rousseau, Denise M. “Psychological and Implied Contracts in Organizations”. Employee Responsibilities and Rights Journal 2, no.1 (1989): 121–39. Schmidt, Elizabeth. “Anticolonial Nationalism in French West Africa: What Made Guinea Unique?” African Studies Review 52, no. 2 (2009): 1–34. Sedbon, Gilbert. “AirAfrique Gets New Head”. Flight International 3970 (1985): 7. Sedbon, Gilbert. “Air Afrique Salvage Plan Welcomed”. Flight International 4152 (1989): 12. Silverman, Brian S., Jack A.Nickerson, and John Freeman. “Profitability, Transactional Alignment, and Organizational Mortality in the US Trucking Industry”. Strategic Management Journal 18, no.1 (1997): 31–52. Sparaco, Pierre. “Air Afrique Shows How Multi-Partner Carrier Can Work”. Aviation Week & Space Technology 147 (1997): 83. Sparaco, Pierre. “Air France Proposes Rescuing Air Afrique”. Aviation Week & Space Technology 155 (2001): 46–47. Staw, Barry M. “The Escalation of Commitment to a Course of Action”. Academy of Management Review 6, no. 4 (1981): 569–77. Sutton, Robert I. “The Process of Organizational Death: Disbanding and Reconnecting”. Administrative Science Quarterly 32, no. 4 (1987): 542–69. The Economist. “A New Air Afrique?” 360 (2001): 49. Thornhill, Stewart, and Raphael Amit. “Learning About Failure: Bankruptcy, Firm Age, and the Resource-Based View”. Organization Science 14, no. 5 (2003): 497–509. Thornton, Robert L. “Governments and Airlines”. International Organization 25 (1971): 541–553. Tirole, Jean. The Theory of Industrial Organization. Boston, MA: MIT Press, (1988).
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Tumba, Simon. “Eleven Oust Afrique Boss”. Airline Business. http://www.flightglobal.com/news/articles/eleven-oust-afrique-boss-15772/.
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UNECA (United Nations Economic Commission for Africa). Assessing Regional Integration in Africa: Towards Monetary And Financial Integration. Addis Ababa, Ethiopia: UNECA, (2008). UNECA (United Nations Economic Commission for Africa). Declaration of Yamoussoukro on a New African Air Transport Policy. Yamoussoukro, Côte d’Ivoire: UNECA, (1988). Vandyk, Anthony. “Bucking the Trends”. Air Transport World 30 (1993): 40–43. Walsh, Ian J, and Bartunek, Jean M. “Cheating the Fates: Organizational Foundings in the Wake of Demise”. Academy of Management Journal 54, no. 5 (2011): 1017–1044. Weitzel, William, and Jonsson, Ellen. “Decline in Organizations: A Literature Integration and Extension”. Administrative Science Quarterly 34, no. 1 (1989): 91–109. Whetten, David A. “Organization Growth and Decline Processes”. Annual Review of Sociology 13 (1987): 335–58. Wild, Andrew M. “Learning the Wrong Lessons from History: Underestimating Strategic Change in Business Turnarounds”. Business History 52, no. 4 (2010): 617–50. Wooten, Stephen. The French in West Africa: Early Contact to Independence. Working paper, University of Pennsylvania - African Studies Center, (1992). World Bank. Air Transport Trends and Economics in Western and Central Africa. Washington, D.C.: World Bank, (1998). World Bank. A Memorandum of the President of the International Development Association to the Executive Directors on a Regional Integration Assistance Strategy for West Africa. Washington, DC: World Bank, (2001). World Bank. Air Transport in Western and Central Africa: Facts and Issues. Washington, D. C.: World Bank, (2003). Yacouba, N'Diaye. My era Africa. August 15, 2010. http://www.airafrique.eu/mon-ere-afrique-2/. Yansane, Aguibou. “The State of Economic Integration in North West Africa South Of the Sahara: The Emergence of the ECOWAS”. African Studies Review 20, no. 2 (1977a): 63–87. Yansane, Aguibou. “West African Economic Integration: Is ECOWAS the answer?” Africa Today 24, no. 3 (1977b): 43–59.
38
Figure 1. Air Afrique as a symbol of post-colonial Africa
Source: Air Afrique advert, which appeared in the November issue of the Black Enterprise (1971).
39
Data sources: World Bank, French Civil Aviation Department www.dgac.fr
Figure 3: Historical phases in the demise of Air Afrique The golden phase (1960-1970s)
Africanization phase (1980-1989)
Symbol of pan-Africanism Pooling of countries’ limited resource and quest for expertise
Declining managerial and technical expertise Hiring based on political links Misallocation of resources
Escalating indecision phase (1990-2000) Employees’ and states’ resistance The conflicting interests of governments. Inability to respond to external factors
Escalating commitment phase (1990-2000)
Desire by states to maintain the status quo-routes and staffing Employee resistance
Dissolution phase (2000-2002) Organizational scapegoaing Failed recovery strategy and its subsequent demise.
Source: Constructed from field notes.
Table 1. Contracting nations of Air Afrique from 1961-2002.
40
Founding members Dahomey, contemporary Benin Upper Volta, contemporary Burkina Faso Central African Republic Chad Congo-Brazzaville Ivory Coast Mali Mauritania Niger Senegal Togo (expressed interest in 1964 to become a member) Cameroon (formed autonomous carrier, Cameroon Airlines in 1971)
Period 1961-2002 1961-2002 1961-2002 1961-2002 1961-2002 1961-2002 1992 -2002 1961-2002 1961-2002 1961-2002 1968-2002 1961-1971
Gabon (Formed Compagnie Nationale Air Gabon in 1977)
1961-1977
Source: Constructed from field notes.
Table 3: Operating Accounts (in million CFA) Year Income from flight operations Other income Miscellaneous revenues (PF and commissions) Reversals Total income Flight expenses Structure Expenses (sale, stopover) Other expenses (FF, exchange loss) Allocations to depreciation and provisions Total expenses Net income
1989
1990
1991
1992
1993
1994
1995
1996
1997
111220
117397
113766
120618
120741
213110
223549
215983
229612
15736
13744
14068
13477
12483
21615
19500
22923
25410
16786
7237
12825
12878
12025
17856
16648
9617
23283
1051
1403
2990
923
611
764
2641
951
2350
144793
139781
143649
147896
145860
253345
262338
249474
280655
78294
83185
80986
80725
83998
145337
154410
150697
155262
31214
35448
33532
36062
40239
52979
61593
65129
65944
24821
12204
16584
19090
18197
35658
37557
32457
34808
10097
8784
12329
11754
11869
21321
24715
24754
31214
144426
139621
143431
147631
154303
255295
278275
273037
287228
367
160
218
265
-8443
-1950
-15937
-23563
-6573
Data source: African Development Bank, Multinational Company Air.
41
Table 2. Key events illustrating salient events in Air Afrique’s demise)
Air Afrique 1960s
Key events On 28 March 1961, the Treaty of Yaoundé led to the creation of Air Afrique.
The newly emergent states signed economic and monetary agreements with France to create the CFA franc.
The contracting states sought managerial and technical expertise from France and within member countries to help overcome competency gaps.
The airline launched long-haul flights between Africa and France.
Became the first African company to acquire Airbus fleets in 1979.
The oil shocks in 1973 and then in 1979 exerted financial pressures on the firm.
1980
The process of Africanisation began.
1984
Operating losses of almost $10 million and outstanding debts totalling over $250 million.
Protracted industrial dispute led to the mass dismissal of 117 pilots and technicians including 56 French nationals. This began as a
1970s
72hr strike (over planned cutbacks in staff and salaries) and rapidly escalated into a war of attrition between labour and management.
1985
Concerns expressed by some states and commentators about the pace of the Africanisation process.
Aoussou Koffi reduced the net operating deficit to $732,000 for 1984, compared with nearly 10 times that figure in 1983.
Aoussou Koffi’s 12 years’ reign came to an end. Under Koffi's tenure, around 40 African pilots and mechanical engineers accepted wage cuts of 45 per cent.
Former Congo foreign minister, Auxence Ickonga appointed as new president and director general to help steer the airline from bankruptcy by streamlining the operations through tighter financial control and a reduction in staff numbers.
Its position was further strengthened after the Economic Community of West African States (ECOWAS) fleshed out the possibility of establishing a regional airline.
1987
Auxence Ickonga warned of potential collapse as the debt of around $42.3 million became unbearable, but survived on overdrafts
42
of around $18 million.
The heads of member states mandate President Felix Houphouet-Boigny to devise a strategy towards the revival of the airline.
1989
$180 million was required to rescue the firm – the French government offered about two-thirds.
1994
Recapitalisation brought in some 30 billion CFA francs.
1996
Tense standoff between management and unions led to the sacking of chief executive Yves Rolland-Billecart (1989–1996).
The airline proclaimed itself as ‘the No. 1 Company in Black Africa’.
Between 1989 and 1996, the airline carried more than 800,000 passengers annually.
Sir Harry Tirvengadum appointed new chairman to turn around the airline and secure private investment.
The war in the Democratic Republic of Congo (the former Zaire) meant services to Brazzaville were suspended for nine months,
1997
costing the airline CFA13 billion. 1998
Four Airbus A310-300s, representing a third of its passenger fleet, were seized by creditors – Creditors Crédit Lyonnais, Dresdner Bank and Midland Bank.
1998
1999
2000s
The French Government unveil a plan to buy back and lease the four aircraft to the carrier.
Estimated debts of $ 5.6 million and served 30 destinations in Africa, Europe and North America.
Reduced frequencies on some routes in attempt to reduce cost.
Unveiled restructuring package aimed at whittling state ownership and employees of 4,900.
In December 1999, the military takeover in Abidjan disrupted the commercial activities of the airline.
World Bank grants of $800,000 following US consulting firm, Simat, Helliesen and Eichner’ s report on the firm.
Diagnosed as over-staffed, poor-quality services and serving numerous unprofitable routes.
Air Afrique went into bankruptcy in 2002 with unsustainable debt of US $458million.
On 22 December 2000, member countries adopted the ‘Washington Plan’ in Abidjan aimed at privatisation and restructuring to ensure its long-term survival.
Source: Constructed from field notes.
43
Appendix 1: Air Afrique fleet details and history Aircraft Type
Delivered
Boeing 737-2Y5(A)
25/05/1997
19/02/1998
Boeing 747SR-81 Airbus A310-304 Boeing 767-38E(ER) Airbus A300B4-203 Douglas DC-8-63PF Boeing 737-33A
1997 Dec-94 21/02/1999 11/12/1998 Nov-75 01/10/1990
May-97 04/06/1996 28/11/1999 Feb-99 Jan-76 01/09/1991
Boeing 737-33A Boeing 737-2A1(A)
01/11/1989 Oct-94
28/10/1990 May-95
Boeing 747-121 Boeing 747-121 Airbus A310-324
26/05/1994 25/05/1994 30/09/1998
05/06/1994 Jun-94 29/11/2005
Nov-75
Jan-76
Boeing 737-3M8
14/01/1997
10/05/1997
Boeing 737-3Q8 McDonnell Douglas MD-81
05/10/1997
13/10/1998
11/10/1982
11/07/1983
Boeing 767-330(ER) Boeing 747-123
Nov-99 Oct-86
19/09/2000 01/01/1987
Douglas DC-8-62(F) Douglas DC-8-63CF
15/03/1998 May-79
10/03/1999 Nov-79
Douglas DC-8-63CF
20/09/1980
Nov-80
Douglas DC-8-63CF
Oct-1979
Nov-80
Douglas DC-8-63CF
Douglas DC-8-63CF Douglas DC-8-63CF
Exit Date
Sep-80 Oct-77
Oct-81 17/12/1977
Douglas DC-8-53 Boeing 747-123
03/05/1982 Sep-85
15/04/1984 Dec-85
Boeing 747-246B Boeing 7372Q5C(A)
Apr-00
May-00
08/10/1993
01/05/1998
Airbus A310-304
29/04/1991
11/06/1999
Airbus A310-304
12/08/1992
16/02/2000
Airbus A310-304
04/09/1992
08/04/1999
Aircraft Type Airbus A300B4203 Airbus A300B4203 Boeing 737-242C Airbus A330-223 Airbus A330-223 Airbus A310-304 Douglas DC-8-32 Douglas DC-8-53 Douglas DC-8-53 Douglas DC-855CF Douglas DC-8-33 Douglas DC-8-33 Douglas DC-863CF Douglas DC-854CF Douglas DC-855CF Douglas DC-8-53 Douglas DC-855CF Jet Trader
Delivered 12/07/1983
Exit Date Scrapped
13/09/1984 26/07/1995 29/09/2000 16/11/2000 12/08/1999 Jan-63 Apr-69/ oct63 01/07/1968
Written Off Written Off 28/02/2002 28/02/2002 22/08/2001 May-63
02/08/1966 31/10/1967 09/11/1965
Scrapped Scrapped 13/06/1968
28/05/1970
17/12/1991
10/11/1974
01/03/1979
08/08/1975
10/03/1988
15/02/1979
Scrapped Scrapped
Preserved
24/02/1967 (02-1966)
05/04/1967
Douglas DC-863PF Boeing 737-3H9
05/06/1977 Sep-98
01/05/1979 17/04/2000
Boeing 737-3Q8
31/10/1998
23/10/2001
08-10-1998 Boeing 737-3Q8 McDonnell Douglas DC-10-30 McDonnell Douglas DC-10-30
31/10/1998 30-11-1997
23/10/2001
13/11/1986 28-02-1973
05/01/1996
20/05/1976
01/11/1992
19-06-1975 McDonnell Douglas DC-10-30 Airbus A300B4203 Boeing 7472S4F(SCD) Airbus A300B4622R
10/08/1979 07/05/1981 Mar-85
23/02/1995 Stored 24/09/1985
Airbus A310-304 11/08/1993 01/08/1999 27-10-2000 04/03/2002 Airbus A300B4622R 27-10-2000 22/03/2002 Boeing 737-3H9 Jul-98 02/04/2000 Airbus A300B4Airbus A300B4605R 05/04/1995 Oct-01 605R 23/05/1995 Oct-01 Data sources: African Development Bank, Multinational Company Air; Planespotters (n.d); http://aerobernie.ae.funpic.de/Air%20Afrique.html.
44
Notes 1
Barrett, “Multi-Flag Airlines”; Thornton, “Governments and Airlines”.
2
Ibid.; Cumming, “Aviation in Africa”.
3
Barrett, “Multi-Flag Airlines”, 7.
4
Thornton, “Governments and Airlines”. For examples see Argenti, Corporate Collapse; D’Aveni, “The Aftermath of Organizational Decline”;
5
Hambrick and D’Aveni, “Top Team Deterioration as Part of the Downward Spiral of Large Corporate Bankruptcies”. For examples see Fleming et al., “The Decline and Fall of the North British Locomotive Company”;
6
McGovern, “Why Do Successful Companies Fail? “; idem, “The Decline of the British Tyre Industry”; Higgins and Toms, “Public Subsidy and Private Divestment”. 7
Farah, “Air Afrique's Fall to Earth”, E01.
8
Onishi, “Troubles Tarnish a Once-Shining African Airline”, 39.
9
Ibid.; Fadugba, “United We Fall, Divided We Fall”.
10
Ibid.
11
Barrett, “Multi-Flag Airlines”, 10.
12
Onishi, “Troubles Tarnish a Once-Shining African Airline”, 39.
13
Whetten, “Organization Growth and Decline Processes”.
14
Ibid.; Moulton et at., “Business Decline Pathways”.
15
Andrews et al. “Performance Failure in the Public Sector”; Fortune and Mitchell, “Unpacking Firm Exit at
the Firm and Industry Levels “; Nelson and Winter, An evolutionary theory of economic change; Tirole, The Theory of Industrial Organization. 16
Anderson and Tushman, “Organizational Environments and Industry Exit”; Silverman et al., “Profitability,
Transactional Alignment, and Organizational Mortality in the US Trucking Industry”. 17
Mellahi and Wilkinson, “Organizational Failure”; Nutt, “Surprising but True: Half the Decisions in
Organizations Fail.” 18
For example see Weitzel and Jonsson, “Decline in Organizations”.
19
D’Aveni, “Top Managerial Prestige and Organizational Bankruptcy”; Hambrick and D’Aveni “Top Team
Deterioration as Part of the Downward Spiral of Large Corporate Bankruptcies”; Thornhill and Amit, “Learning About Failure”. 20 21
Mellahi and Wilkinson, “Organizational Failure”. Knott and Posen, “Is Failure Good?”; Silverman et al., “Profitability, Transactional Alignment, and
Organizational Mortality”. Cameron et al., “Organizational Effects of Decline and Turbulence”; Sutton, “The Process of Organizational Death”; Walsh and Bartunek “Cheating the Fates”; Weitzel and Jonsson, “Decline in Organizations”. 22
23
Higgins and Toms, “Public Subsidy and Private Divestment”.
24
Clignet, “The Legacy of Assimilation in West African Educational Systems”; Clignet and Foster, “French and
British Colonial Education in Africa”. 25
Clignet and Foster, “French and British Colonial Education in Africa”, 191.
26
Ibid.; Wooten, The French in West Africa.
45
27
Ibid.
28
Ibid.
29
Cohen, “The Lure of Empire”.
30
Clignet and Foster, “French and British Colonial Education”, 191; Wooten, The French in West Africa.
31
Ibid.
32
Clignet and Foster, “French and British Colonial Education in Africa”.
33
Wooten, The French in West Africa: Early contact to independence.
34
Heymann, “Air Transport and Economic Development”; Pirie, “Aviation, Apartheid and Sanctions”; idem,
“Southern African Air Transport after Apartheid”. 35
McCormack, “Airlines and Empires”; For further details see Decker, “Corporate Political Activity in Less
Developed Countries”. 36
See McCormack, “Missed opportunities’ for discussion of the British government’s attempts to develop air
services in British West Africa”. 37
Heymann, “Air Transport and Economic Development”, 387.
38
Cumming, “Aviation in Africa”.
39
Barrett, “Multi-Flag Airlines”, 12.
40
For a detailed discussion see Amankwah-Amoah and Debrah, “The evolution of alliances in the global airline
industry”; UNECA, Air transport trends and economics in Western and Central Africa. 41 42
Cumming, “Aviation in Africa”. Barrett, “Multi-Flag Airlines”, 12; Fadugba, “Air Afrique Struggles to Control Costs”.
43
Cumming, “Aviation in Africa”.
44
Thornton, “Governments and Airlines”, 546.
45
Barrett, “Multi-Flag Airlines”, 12.
46
Thornton, “Governments and Airlines”, 546; Cumming, “Aviation in Africa”.
47
Cumming, “Aviation in Africa”.
48
See also Yansane, “The State of Economic Integration in North West Africa South of the Sahara”.
49
Ibid.
50
Vandyk, “Bucking the Trends”.
51
Amankwah-Amoah and Debrah, “The Evolution of Alliances in the Global Airline Industry”.
52
Sparaco, “Air Afrique Shows How Multi-Partner Carrier Can Work”.
53
Farah, “Air Afrique's fall to Earth”; Thornton, “Governments and Airlines”.
54
Rodney, “The Entente States of West Africa”
55
BBC, “Air Afrique's Mayday Call”.
56
Vandyk, “Bucking the Trends”
57
African Development Bank, Multinational company Air-Afrique reinforcement project, 1.
58
Fadugba, “Air Afrique Struggles to Control Costs”, 7.
59
Black Enterprise, “Air Afrique’s Advertising” 9.
60
See Gladdish, “Evolving systems of government in Africa”; Yansane, “The State of Economic Integration”
for detail discussion on the decolonising process in French Equatorial Africa and French West Africa.
46
Immediately after independence, the Ghana-Guinea Union was formed in 1958 which was accompanied by the Ghana-Guinea-Mali Union (The Charter of the United States of Africa) in 1961. 61
Schmidt, “Anticolonial Nationalism in French West Africa”.
62
Kofele-Kale, “Cameroon and its Foreign Relations”.
63
Yansane, “The State of Economic Integration”; Rodney, “The Entente States of West Africa”.
64
Ibid.
65
Gurtner, “The CFA Franc Zones and the Theory of Optimum Currency Area”; Martin, “The Franc Zone,
Underdevelopment and Dependency in Francophone Africa”. 66
Rodney, “The Entente States of West Africa”.
67
Yansane, “The State of Economic Integration”.
68
Martin, “The Franc Zone, Underdevelopment and Dependency in Francophone Africa”.
69
Rodney, “The Entente States of West Africa”.
70
Ibid.; Martin, “The Franc Zone, Underdevelopment and Dependency in Francophone Africa”.
71
Ibid.
Rodney, “The Entente States of West Africa”. , Ibid., 86. 74 Yacouba, “My Era Africa”. 72 73
75
Barrett, “Multi-Flag Airlines”
76
Details of other aircraft used by the airline can be found in Appendix 1.
77
Yacouba, “My Era Africa”.
78
Kromah, “Aviation and Regional Cooperation in Africa”; also See Pirie, “Aviation, Apartheid and Sanctions”
for detailed discussion on the expansion of other African airlines including South African Airways. 79 80 81
Onishi, “Troubles Tarnish A Once-Shining African Airline”. Ibid.; World Bank, Air transport in Western and Central Africa. Kofele-Kale, “Cameroon and its Foreign Relations”, 207; idem, “The Policy of Non-Alignment in An Age of
Alignment Politics”. 82
Ibid.
83
Ibid., 201.
84
Kromah, “Aviation and Regional Cooperation in Africa”.
85
Farah, “Air Afrique's fall to Earth”.
86
Ibid.; Onishi, “Troubles Tarnish A Once-Shining African Airline”.
87
Fadugba, “Air Afrique Struggles to Control Costs”.
88
Barrett, “Multi-Flag Airlines”.
89
Hambrick and D’Aveni, “Top Team Deterioration as part of the Downward Spiral of Large Corporate
Bankruptcies”. 90
Onishi, “Troubles Tarnish A Once-Shining African Airline”.
91
Sedbon, “Air Afrique Salvage Plan Welcomed”.
92
Adeble, “Air Afrique States Case”.
93
Vandyk, “Bucking the Trends”.
94
Ibid.
95
Tumba, “Eleven Oust Afrique Boss”.
47
96
Fadugba, “Air Afrique Struggles to Control Costs”.
97
Details of the report outlined by the African Development Bank, Multinational company Air-Afrique
reinforcement project. 98
Sedbon, “AirAfrique Gets New Head”
99
Ibid. For further details of the Yamoussoukro Declaration See UNECA, A Memorandum of the President of the
100
International Development Association. 101
Sedbon, “AirAfrique Gets New Head”.
102. The exchange rate was around 3.5-4 CFA to US$1 before the 1994 devaluation. 103
Kromah, “Aviation and Regional Cooperation in Africa”.
104
Robinson, “Employment Policy and Deregulation in European Air Transport”.
105
Ibid.
106
Denis et al., “Escalating Indecision”.
107
Flight International, “Air Afrique Takes Privatised Route to Clear Debts”; French, “Revenue and Hope Ebb
at West Africa’s Airline”. 108
World Bank, Air transport in Western and Central Africa, 79.
109
Ibid., 78–79.
110
Goldstein, “Infrastructure Development and Regulatory Reform in Sub-Saharan Africa”.
111
Fadugba, “Air Afrique Struggles to Control Costs”.
112
Airline Business, “West African Optimist”.
113
Ibid.
114
Vandyk, “Bucking the Trends”.
115
Rousseau, “Psychological and Implied Contracts in Organizations”, 121–123.
116
Ibid.
117
French, “Revenue and Hope Ebb at West Africa’s Airline”.
118
Ibid.; Tumba, “Eleven Oust Afrique Boss”.
119
Ibid.
120
Ibid.
121
Ibid.
122
Kofele-Kale, “Cameroon and its Foreign Relations”, 201.
123
Tumba, “Eleven Oust Afrique Boss”.
124
French, “Revenue and Hope Ebb At West Africa’s Airline”.
125
Staw, “The Escalation of Commitment to a Course of Action”.
126
Airline Business, “West African Optimist”.
127
Ibid.
128
Tumba, “Eleven Oust Afrique Boss”.
129
Mackenzie, “Air Afrique Reaches End of the Line”.
130
Brockner, “The Escalation of Commitment to a Failing Course of Action”; Staw, “The Escalation of
Commitment to a Course of Action”. 131
Sparaco, “Air Afrique Shows How Multi-Partner Carrier Can Work”.
132
Gurtner, “The CFA Franc Zones and the Theory of Optimum Currency Area”
48
133
UNECA, Assessing Regional Integration in Africa.
134
Ibid.
135
Gurtner, “The CFA Franc Zones and the Theory of Optimum Currency Area”.
136
Sparaco, “Air Afrique Shows How Multi-Partner Carrier Can Work”; Farah, “Air Afrique's Fall To Earth”.
137
Ibid.
138
BBC, “Air Afrique's Mayday Call”.
139
World Bank, “A Memorandum of the President of the International Development Association to the
Executive Directors on a Regional Integration Assistance Strategy for West Africa”; Yacouba “My Era Africa”. 140
Ibid. Document delineates the precarious position of the airline at the time.
141
Ibid.
142
The Economist, “A New Air Afrique?” 49.
143
Ibid.
144
Sparaco, “Air France Proposes Rescuing Air Afrique”, 46–47.
145
Minder, “Four Air Afrique Planes Seized”.
146
Ibid.
147
Ibid.; The Economist, “A New Air Afrique?”.
148
Farah, “Air Afrique's Fall To Earth”.
149
Onishi, “Troubles Tarnish a Once-Shining African Airline”, 39.
150
BBC, “Air Afrique's Mayday Call”.
151
French, “Revenue and Hope Ebb at West Africa’s Airline”.
152
Denis et al., “Escalating Indecision’.
153
Brockner, “The Escalation of Commitment to a Failing Course of Action”; Staw, “The Escalation of
Commitment to a Course of Action.” 154
Whetten, “Organization Growth and Decline Processes”.
155
Finkelstein, “Why Smart Executives Fail”; Wild, “Learning the Wrong Lessons from History”.
156
Thornton, “Governments and Airlines”, 546.
49
