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Air Afrique to Liquidate in Favor of New Carrier - 2001-08-15

Leaders of the 11 African nations that own Air Afrique have agreed to liquidate the airline and give up their majority control of a new carrier that will be formed in its place. The agreement is the latest attempt to save the financially troubled multi-national airline, once seen as a symbol of postindependence unity among former French colonies in West and Central Africa.

The agreement follows months of discussions that have centered on saving the airline, which has been on the verge of collapse under a multi-million dollar debt.

Leaders meeting Tuesday in Brazzaville, Congo, agreed to accept a bailout plan offered by the French national carrier, Air France. The plan is seen as a virtual handover of Air Afrique by its African owners to French control.

African nations owned 68 percent of the airline. Under the new agreement, that share will drop to less than 30 percent. Meanwhile Air France's current 12 percent stake will grow to 35 percent. The French carrier has promised to infuse nearly $70 million to restructure the airline.

By approving the plan, African leaders in effect rejected a restructuring recommended by the World Bank. That plan called for the downsizing of Air Afrique's 4,000 employee staff, a move which leaders saw as politically dangerous. Airline employees have staged numerous protests recently in Abidjan, where Air Afrique is based.

The plan, announced in Brazzaville, calls for the creation of a new company that will bear the same name and logo. Air Afrique will maintain its current schedules and landing rights in various African cities.

In announcing the deal, leaders said Air Afrique's current director, American Jeffrey Erickson, whose cost-cutting plans made him the target of angry employee protests, will be relieved of his duties at the end of this month.