Royal Air Maroc aims to quadruple its fleet and improve regional connectivity
In a bid to strengthen its presence in the aviation sector and establish itself as one of the region's main air links, Morocco has unveiled plans to improve the operations of its state-owned airline. The Moroccan government, led by Prime Minister Aziz Akhannouch, has embarked on a programme to increase the capital of Royal Air Lines with the aim of quadrupling its fleet by 2037.
A contract was signed on Tuesday between Prime Minister Akhannouch and the company's CEO, Hamid Adou. Under the contract, Royal Maroc intends to expand its air fleet from the current 50 aircraft to a total of 200 over the next 15 years.
The contract also involves an increase in the state's contribution to the capital of the Moroccan state-owned airline. However, the exact amount of the increase was not disclosed in the statement released by the official Moroccan News Agency.
In 2019, the company's capital was valued at approximately $370m, with the state owning more than 98% of the shares. To finance the acquisition of new aircraft, the government has included debt guarantees in its financial support package for the company.
The ambitious plan prepares the company to compete in the regional market and potentially expand into long-haul routes, especially with Morocco's adoption of an open skies policy.
According to Al-Arab, Royal Airlines previously owned 60 aircraft, but due to the impact of low demand caused by the pandemic, it decommissioned 10 aircraft and sold others. Now, with the aim of becoming one of the largest international airlines, similar to Emirates Airlines, Qatar Airways and Etihad Airways, Royal Air Maroc intends to significantly expand its fleet.
Industry experts believe that the airline intends to establish itself as a crucial link between Europe and West African countries, taking advantage of the absence of successful airlines in North Africa. They argue that Morocco, unlike Dubai, Manama, Doha and Muscat, which are competing to become transit hubs for East Asia, has a unique advantage. Since the European Mediterranean coast is relatively expensive, and the nearest alternative point of operation is Istanbul airport, creating complexities for travellers, Moroccan airline routes are an attractive option.
In addition, experts suggest that Royal Air Maroc can compete effectively with leading airlines such as Dutch carrier KLM and German carrier Lufthansa, which currently dominate the market for Western Europe to West Africa.
The company's CEO revealed during the Bloomberg New Economy Gateway Africa conference last June that the tender for new long- and medium-haul aircraft had been finalised to accommodate the growing number of tourists and expand its network of destinations.
To support the airline's major investment project, the government plans to implement a comprehensive development plan, improve its competitiveness and digitise its services. The programme also includes the opening of new international destinations to align with the strategic plans of the tourism sector. In addition, Royal Air Maroc intends to strengthen domestic air connectivity by introducing approximately 46 new flights.
Ministry of Economy and Finance data reveals that 2018 was the last profitable year for the company, generating $15m in profits. However, losses began the following year, amounting to approximately $12.8 million. The situation worsened further during the global health crisis, reaching some $370m in 2020, but narrowing to $260m in the following year.
By the end of May, the tourism sector had experienced exceptional growth, with revenues up 42% to around $4 billion.
Rabat therefore aims to boost the tourism sector, which accounts for around 7% of the country's Gross Domestic Product, by intensifying promotional campaigns, investment and air traffic. The authorities aim to attract 17.5 million tourists by 2026. However, the tourism offer in the Moroccan market is occasionally criticised for high prices and quality of services, especially for Moroccan tourists.
