CASABLANCA – Morocco’s flag carrier Royal Air Maroc (RAM) will order six new planes this month despite the bleak outlook for business travel during the global economic downturn, its chief executive has said.
Royal Air Maroc, one of the most profitable airlines in North Africa, has plans to beef up its Boeing-dominated fleet to 50 jets, RAM Chief Executive Driss Benhima said.
It is benefiting from the government’s policy to increase tourism to 10 million visitors by 2010 from 8 million in 2008. The government is also encouraging the expansion of air transport, including low-cost flights.
Morocco signed an Open Skies agreement with the European Union in 2006 allowing new airline competitors, including low-budget carriers such as Ryanair (RYA.I) and easyJet (EZJ.L).
“We will put an order for six planes. We will sign the order deal by the end of this month,” Benhima told a business conference in the North African country’s commercial capital Casablanca.
He gave no more details on the order, but said RAM is looking beyond this year’s economic crisis to develop its business and survive the competition from European airlines.
The Open Skies agreement spurred passenger traffic to grow by between 16 percent and 19 percent per year since 2006. Passenger traffic grew to 11.2 million in 2008 from 5.5 million in 2006, Benhima added.
But he expected air passenger traffic to shrink this year causing RAM to post its first loss in 10 years.
“We have a double-layer strategy for RAM. One is focusing on how to weather the crisis this year; and the other for past this crisis is to adopt a modified business plan that allows the airline to face the competition,” he added.
RAM, which draws more than 70 percent of its revenue from European markets, and its low-cost Atlas Bleu subsidiary must embrace a different strategy than its competitors.
“Our competitors are strong with big fleets. We can not take them on with similar offers and promotions. We have to distinguish our business,” he added.
Benhima said RAM will beef up its routes inside Morocco and expand further its growing operations in Africa.