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Foreign carriers dominate as local air travel market shrinks

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PHOTO: Arik Air

Poor outing of Nigerian airlines on international routes, has forced the actual air travel market in the country to shrink. Estimates of capacity and frequencies recorded at the airports are discouraging.

The local airlines small, weak and under-capitalised are unable to compete favourably to drive the local potential market.

Some 23 foreign airlines are taking advantage of the local inefficiency, controlling at least 90 per cent of the market share on routes to and from Nigeria.

Currently, only Air Peace is functional on the West Coast while other flag carriers have suspended most of the international operations.

Arik Air, in the wake of its takeover by the Asset Management Corporation of Nigeria (AMCON), suspended its London, New York and Johannesburg operations.

Med-View Airlines Plc, citing operational and leasing challenges, has also temporarily withheld its London, Dubai and West Coast services.

Chief Executive Officer (CEO) of African Aviation Services Limited, Nick Fadugba, observed that activities, especially connectivity at hub airports, are parameters for measuring growth of the industry and contributions to the economy.

Unfortunately, Fadugba said, Nigerian hubs at both Lagos and Abuja airports had dropped in capacity and frequencies.

According to Nigeria Civil Aviation Authority (NCAA) estimates, Murtala Muhammed International Airport, Lagos had total capacity of 115,919 in 2012, but the figure dropped to 90,014 in 2017. Total frequencies also plummeted from 811 to 603 in the five-year period.

Nnamdi Azikiwe International Airport, Abuja, had total capacity of 54,600 in 2012 which dropped to 50,520 in 2017, just as the total frequencies fell from 413 in 2012 to 392 in 2017.

This happened while other major airports on the African continent were on the growth path.

For instance, Addis Ababa Bole International Airport, in Ethiopia, grew total capacity of 100,900 in 2012 to 181,547 in 2017. Frequencies of 614 in 2012 also rose to 1,005 in 2017.

Jomo Kenyatta International Airport in Nairobi, Kenya had total capacity of 111,883 in 2012, which increased to 117,234 in 2017, while total frequency grew from 983 to 1,060 in the five-year period.

Kotoka International Airport, Accra, Ghana, also grew total capacity from 35,794 in 2012 to 45,108 in 2017, while total frequencies of 280 in 2012 rose to 351 in five years.

Fadugba said Nigeria had a buoyant international and domestic air transport market, but “lack of airline business knowledge and acumen to do basics like fleet planning, route network scheduling and aircraft finance and lease negotiations, is a major constraint in the very complex aviation industry in Nigeria”.

According to him, there is also lack of cooperation among the airlines, in the form of joint ventures, interlining and code-sharing that are now the in-thing among the legacy carriers “Win-win partnership is a strategy for success.”

Secretary General of the Aviation Safety Round-table Initiative (ASRTI), a think-tank group of the industry, Group Capt. John Ojikutu (rtd), blamed the shrinking of the Nigerian commercial aviation market on what he described as loose funds which many who have little or no knowledge in the aviation business bring into the industry.

He also blamed the situation on faulty business plans that are allegedly recycled among the operators. According to Ojikutu, the airlines are generally single ownership, owned by traditional Nigerian traders or businessmen and not a good attraction to technical investors and financial boardroom gurus.

“Passengers are stranded not because there are no aircraft but because of poor management of utilisation of capacity.

One or two of the four airlines flying now have about 30 new or modern aircraft in their fleet, but how many of these can they put in the air in a day or how many hours would each of these aircraft fly in one day?

“How many technical crews are available to fly available aircraft?

Having plenty aircraft in your fleet should not be an ego to brand as capacity but the utilisation of that capacity is what should matter to you.

Nigerian Airways at some time in its life did not have as many aircraft as some of the present airlines but it covered more domestic and international routes than all the present airlines put together,” the expert said.

He stressed the need for interlining and code-sharing among the operators, saying “for as long as there are problems of single ownership in the Nigerian commercial aviation, and the airlines are not ready to interline or co-shared and there are no efficient ways to utilise capacity, the air travelling passengers will continue to suffer.”

To the Chief Executive Officer of Med-View Airlines Plc, Muneer Bankole, the problem is more of harsh operating environment that has almost made it impossible for any airline to survive.

Bankole, while taking delivery of a new Boeing 777-200ER for Med-View, said airlines in other climes were better off, given healthy and business-friendly environment that are allegedly lacking in Nigeria:

“The truth is that doing business is tough around here, and anyone that is managing to survive should be given the credit.

You know very well that the environment is not conducive, many political issues, security threats, financial issues.

“So, for those of us who are still in the business, I will say, we give thanks to God helping us in sustaining this momentum.

It has never been easy; are you talking about the charges, taxes, cost of operations and the weather? Let’s just thank God that we have kept the business going.”

His counterpart in Air Peace, Allen Onyema, lamented that the environment continued to be staked against the operators because the government allegedly failed to support the industry to grow and be competitive.

“We are going through very tough patches. You can bring all the legacy carriers to run in the same environment; I can assure you that they will only last 72 hours. That is how it has really been tough around here.”

He said an example of how the Federal Government failed to support them was in allowing foreign carriers to originate multiple flights from Nigeria, which he described as “a rape on the economy.”

He added: “ASKY was established in Togo and their population is not as high as that of Lagos yet they are flying into Nigeria and other countries, meaning that their market is not Togo.

But when we (AirPeace) wanted to go there, we were given approval in Nigeria only to get there and be told we cannot fly.

“I went to the media and also threatened to file a legal action and then someone came to me and said don’t go to court.

This is supposed to be where the country stands up for the airline, but no. Eventually they decided to give us the approvals but they charged $5000 landing cost.

Up until now, we are not flying into Cote d’ Ivoire because of their ludicrous charges, yet Air Cote d’ Ivoire flies here.

So, how have we protected our airlines from being fleeced?”


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