Moroccan government and carrier sign contract-program
Morocco, Business, 11/28/2001

The Moroccan government and the Moroccan carrier Royal Air Maroc (RAM) signed in Rabat Tuesday a three-year program-contract, providing for a comprehensive financial, marketing and technical restructuring of the carrier.

Under the accord, the government will subscribe 440 million DH (about US$ 38.26 million) over three years to increase RAM's capital and pledges to guarantee a 300 million DH (about $26.08million) bond issue by RAM.

The state will also confirm the guarantee to substituted insurers in covering risks up to $ 950 million by incident over a three-month period starting October 24, 2001.

The state pledges to pay the arrears due by the administration to the carrier (620 million DH -- about $53.91 million -- over the period running from December 2001 to January 2003) and to take the necessary measures to avoid that arrears be accumulated again.

RAM, on its part, pledges to improve its governance, reorient its activities and update its investment program concerning both ground facilities and fleet. On the technical and financial scale, RAM is called to set out targets in precise figures and to set out datelines for the company's performance indexes.

The contract, which states that the company's current result must become positive as of 2002-2003, provides for the setting up of a committee to follow up the implementation of the decisions made and assess the performance scored compared to targets set.

The contract was signed on the government's side by minister of economy, finance, privatization and tourism, Fathallah Oualalou, and minister of transport and merchant navy, Abdessalam Znined, and RAM's side by its president and managing director, Mohamed Berrada, at a ceremony chaired by Premier Abderrahmane Youssoufi.

Youssoufi said this program-contract seeks to secure the company's future and to establish clear and transparent bases meant to create a balance between mutual interests. He said the government can only intervene to assist the carrier, that was affected by the crisis entailed by the September 11 events, and enable it to play its role in the country's economic, social and technological development. This program-contract does not only seek to overcome the effects of the current crisis but also to create the appropriate climate to secure the company's future on firm bases, Youssoufi said.

RAM has been affected by the acute civil aviation crisis which hit all world air companies following the September 11 events, and by two difficult years due to the Dollar appreciation, the hike in oil prices, and the erosion of air transport margins.

The Moroccan government, had decided, immediately after the September attacks against the USA, to guarantee the company and substituted insurers in covering risks up to one billion dollars by incident.

The government had also decided to raise tariffs, which will reduce losses from one billion DH to 750 million DH (US$ 68 million). Other measures include delaying by a year the delivery of two ordered Boeing 737 till 2003 and freezing recruitment.

RAM, which has 32 aircraft, all of them Boeings will also delay by one year the general Boeing and Airbus Purchase program under which it ordered 22 medium-haul and long-haul Boeing jetliners and four Airbus to be delivered over the 2002-2013 period.

RAM's insurance costs have almost quadrupled from 28 million DH to 120 million DH since Sept.11. The airline's number of passengers have fallen 22 percent since the day of the attacks and "winter bookings seem to be frozen," an official source had said.

Previous Stories:
  Moroccan phone directory issues electronic version   (11/14/2001)
  UPS sets up new agency in Morocco   (11/13/2001)
  RAM to service Paris-Essaouira-Paris weekly flight as of mid-December   (11/13/2001)

Please add a link on your webiste pointing to ArabicNews.com and bookmark ArabicNews.com & subscribe to our daily email news bulletin.

Search