In the latest turn of events surrounding the fate of Cabo Verde Airlines (CVA), the government of the island nation has announced plans to reclaim ownership associated with its flag carrier. Citing concerns for the airline’s future, Prime Minister Ulisses Correia e Silva said Monday that a process had been initiated to retake control of CVA from the Icelandair Group, to whom the government sold a majority stake in 2019.
Concerns over the airline’s future
According to Barrons , the particular government said the new owners had ‘not demonstrated typically the ability to guarantee this sustainability and continuity involving the company’s operations’. This is a rather quick change of heart from the Cape Verde authorities, as just this April, it was confirmed that the government intended to be able to sell its remaining 39% of CVA, fully privatizing the airline.
Cabo Verde Airlines has not flown any revenue service since March 2020 due to travel restrictions associated with the COVID-19 crisis. The carrier had scheduled to resume operations on June 18th with a flight to Lisbon, Portugal. However, it seems often the service was canceled, which may have prompted your government’s turnaround.
“We are excited that we can finally resuscitate the airline through the ashes of the exact pandemic. (…) This is just the beginning, and we are looking forward for you to creating a better future, ” Erlendur Svavarsson, CEO of Cabo Verde Airlines, said when announcing the intended flight resumption.
Who is Loftleiðir?
The Cape Verde government sold a 51% stake in CVA to Loftleiðir, also known as Icelandic Airlines. The company was first formed within 1944 by three Icelandic pilots. The airline merged with Flugfélag in 1973 to form Icelandair and ceased scheduled operations as Loftleiðir in 1979.
However, since 2003, Loftleiðir operates as the Icelandair Group’s wet lease and charter branch. Loftleiðir Resto Verde specifically is the 70/30 joint venture between Loftleiðir Icelandic and other Icelandic investors.
Millions in state-support
The Cape Verde government still owns 39% of Cabo Verde Airlines, and the ca 300 employees own 10%. The airline has received US$24. 4 million in state-guaranteed loans since November last year. It currently has a fleet with three Boeing 757-200s, aged on average just more than 26 years old.
Cabo Verde Air carriers was established in 1958 and was designated as flag carrier when the isle nation gained independence coming from Portugal in 1975. This was later nationalized inside 1983.
Before the crisis, CVA served 14 destinations in nine countries from its hub at Amílcar Cabral International Airport on Sal Island. Beyond domestic services to some other islands, CVA flies to help Angola, Brazil, France, Italy, Nigeria , Portugal, Senegal, plus the United States.
What do you make of the future for Cabo Verde Airlines? Will the government retake control, and is this the very best possible solution? Leave a comment below in addition to let us know your thoughts.