Aviation expert advises domestic airlines to form alliances
Nigerian Civil Aviation Authority
Mr Gbenga Olowo, the President, Aviation Round Table (ART) has advised domestic airlines to form alliances to enable them surmount their current challenges.Olowo gave the advice while speaking with the News Agency of Nigeria (NAN) in Lagos on Monday.
He noted that most of the airlines were faced with multiple taxation, scarcity of aviation fuel, and difficulty in sourcing foreign exchange for their operations.According to him, the problem is compounded by unhealthy competition among the airlines which makes them unable to earn enough revenue to cover cost.
“The competition in the place is suicidal. There are about seven or eight airlines doing Lagos-Abuja and Lagos-Port Harcourt routes.“So, most of the time, they fly their aeroplanes half-filled or empty. Thus they are not earning enough because of the unhealthy competition.
“We don’t need more than two or three airlines in this economy. If you have two or three, that is what economist call duopoly or oligopoly. There will be healthy competition and all the benefits of competition.
“So, the first solution is that they should form strong alliances to become two or three so that we can minimise competition that is preventing them from charging adequate fares.’’He noted that some international airlines were already involved in such alliances, adding that Nigerian airlines should take a cue from them.
The ART president also called on the Nigerian Civil Aviation Authority (NCAA) to formulate a policy that would make the airlines go into alliances.
Olowo said: the NCAA will not prevent anybody from coming into the sector.“However, if you have only two or three aircraft, you will be directed to belong to one of the three groups which will have not less than 50 aircraft each.’’
Related
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.
1 Comments
By all measures, Gbenga Olowo is an intelligent, ethical professional; however, I believe much of what he intends to convey in words and concepts – is either omitted or purposely misrepresented in print.
This article is a good example: This piece claims that Olowo ‘advised’ airlines to ‘form alliances to surmount their current challenges’. OK…let’s form alliances…and then…DO what?
If the competition among airlines is ‘suicidal’ – then so be it. If the men who own and manage these companies cannot see the future – then they deserve to fail and cease operations. Being a member of an ‘alliance’ will not impute vision, intelligence, business acumen or common sense.
I support Mr. Olowo’s philosophies regarding commercial aviation in Nigeria; however, the root cause for the dismal ‘state of the art’ in Nigeria is a gross lack of talent, wisdom, skills, fundamental mismanagement of a very complicated industry…and the ever present corruption.
We will review and take appropriate action.