BaretaNews earlier announced the corporation between US BOEING and Cameroon Camairco. Our very finest columnist and analyst Mr Callistus gave one of his finest analysis to understand the CAMAIRCO game. He writes:
Knowing what the Biya regime is up to and knowing what corporate management entails, I suspected what might have gone wrong. I have done market research on an airline company using Cameroon and Nigeria as my markets. I have studied companies like Lufthansa. I have some knowledge about the rivalry between Boeing and A380 Air Bus.
All companies have strategies and companies like Camair-Co and Boeing which are big corporations must be managed by experts and not by some unqualified dudes who happen to be the friend or relative of a-man-that-counts. I would avoid doing a critical analysis on corporate strategies or strategic management using Camair-Co because it will require too much of my time and efforts. I would just dwell on what I read from Baretanews:
1. THE FAILED CAMEROUN FLIGHT COMPANY, CAMAIR-CO SHALL IN THE DAYS AHEAD BE BENEFITTING FROM THE EXPERTISE OF THE AMERICAN BOEING COMPANY.
Let it be known that Boeing is an aircraft manufacturer and not an Airlines company. As we already know, Camair-Co is a passenger airlines company and not an aircraft manufacturing company. If we are talking about the management of Camair-Co as a corporation, then Boeing is the wrong company to embrace. Boeing does not have the expertise in managing an airline company. If the Biya regime intends to save and rescues Camair-Co from collapsing or to restructure Camair-co, then Biya should have invited rival companies like Rwanda, Kenya Airways, Brussels Airlines, etc (just to name a few) for the project. These companies could either do the following:
Partner with Camair-Co (Joint Venture)
Acquire Camair-Co (Acquisition)
Franchise (Licensing), permitting Camair-Co to use their names, operate with certain standards provided by these companies and then pay royalties to these companies for using their brand name.
This form of alliance, known as horizontal integration would have meant much to Camair-Co, considering the fact that these companies are already expert in the industry. Any of these new ventures could lead to strategies such as down-scoping, downsizing, market expansion, diversification, organisational flexibility and structural flexibility, etc.
The only way Camcair-Co can unarguably benefit from Boeing’s expertise is if Boeing is to offer technical support and not passenger management service to Camair-Co. This technical support can come in the form of either or both pre-sale or after-sale services. That is, Boeing could be responsible for supplying Camair-Co with planes, inspecting and repairing Camair-Co planes. This form of alliance or co-operation was known as vertical integration could either be backwards or forward integration.
On this point, I would conclude that Boeing’s expertise in managing the affairs of Camair-Co falls short of Boeing’s own core competence and capabilities. An airline company would have made some sense to me.
2. THE APPROVAL CAME FOLLOWING RECOMMENDATIONS IN JUNE 2016 TO SAFEGUARD THE AILING AND FAILING COMPANY.
It is true, then the company is in a free fall situation. But recommending Boeing as the saviour is a huge mistake. When companies of this nature are failing, then rival companies often step in. If none of the rival airline companies has stepped forward, then I will say for sure that, there is a bad odour within the Cameroon power corridors that put potential investors away. Cameroon authority has to put its acts together, clean her house and do so in a proper way.
The story continues:
3. THAT BOEING WILL HAVE THE MANDATE TO RESTRUCTURE CAMAIRCO.
How? Restructuring of Camair-Co does not need the brain of the Americans. Camair-Co-managers would just have to look into why Camair-Co has failed and then provide solutions to the problems. Even a first year accounting student at the university can detect what went wrong with Camair-Co, just by looking at the annual report of the company. An accounting student or a business student can make proposals and recommendations for improved performance at Camair-Co. Unfortunately, Annual Reports of Corporations in Cameroon are kept secret. This is completely against accounting principles and international law.
4. CAMAIRCO WILL HENCE FLY TO 27 DESTINATIONS INCLUDING PARIS, BRUXELLES, WASHINGTON AND OTHER DESTINATIONS.
What prevented the current management from flying to these destinations?
5. THE PAYMENT OF 35 BILLION FCFA CAMAIRCO OWES AND THE INFUSION OF 60 BILLION FCFA WILL BE INJECTED INTO CAMAIRCO’S OPERATION
It means Boeing has taken the responsible to payoff Camairco’s debt of 35 billion CFA and is Boeing is ready to pump in another 60 billion CFA. The total cost of this operation (take over), is at least 95 billion CFA. “Na who Biya di foolam”?
6. As reported by BaretaNews, ‘inspection works have begun and BOEING is set to take the stage in the months ahead’.
Inspection is part of due diligence. And due diligence does not start after a contract has been signed. It is the result of the due diligence that determines if any company would invest in another.
My judgement is based on what I have read online from news outlets. I have not read the report about this Take Over (which is not even hostile). Previous reports had shown that Camair-Co was indebted to Boeing. Boeing is not an airline management company. How come it is now taking control of the management of CamairCo? There is something fishy about this deal. My guess is that because CamairCo cannot afford to pay Boeing the money CamairCo owes Boeing, Boeing and CamairCo have come into an agreement that Boeing will take over CamairCo, run/manage it until Boeing gets back her money. So, in a way, CamairCo has been ‘SEQUESTRATED’ by Boeing. All the revenue and profit will go to the Yankees and not to Cameroon. So, my people, take it from me, until you get another proof, the biggest beneficiary is Boeing and not CamairCo or Cameroon or Cameroonians. Even if the services improve as it should be expected because Boeing wants to get back her money, the profit will not go to us. We are already the loser.
Callistus for BaretaNews.
God is still saying something.