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‘Harsh operating environment behind airlines’ distress’

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Mr Gbenga Olowo

Experts in the aviation sector have blamed the challenges facing domestic airlines in the country on harsh operating environment.

The experts, under the aegis of Aviation Safety Round Table Initiative (ART), said the environment, fueiled by bad policies, account for high mortality rate of airlines than alleged mismanagement of managers.

President of the ART, Gbenga Olowo, said 30 per cent of the failures of the airlines are as a result of mismanagement by the owners and 70 per cent are as a result of the harsh government policies.

The implication is that until the authorities take critical look at the current operating policies with political will to make the environment business friendly, the plight of airlines and contributions to economic development will continue to worsen.

Recall that The Guardian had recently reported that no fewer than 40 erstwhile functional airlines have gone under in the last 17 years, with some of the surviving eight facing bankruptcy.

Spokesperson of the Nigerian Civil Aviation Authority (NCAA), Sam Adurogboye, had hinted that at the time NCAA started in January 2000, there were about 150 airlines on the register, which came down to 28 in 2006, and eight as at today.

Olowo, who is also the Chief Executive Officer of Sabre Network NMC West Africa, told reporters that airlines consistently have 10 years lifespan because it is just almost impossible to survive the odds.

Olowo, with about four decades of experience in the sector, said he had since 1973 seen airlines fail and fall for the same obstacle.

Though Nigeria Airways was a government business, its problem was not any different from the second generation airlines such as Okada airline, Hak air, amongst others that meant well but soon failed.

According to him, “Okada Airline for instance, brought a Boeing 747 aircraft. It never flew but allowed to rot away as investment was wasted.

“The operator of the airline got a promise from the vice president then but we were looking at the airplane everyday positioned to do Lagos-London-Lagos routes. That was on the side of government and this was the same situation for Okada Cargo, Hak Air,” Olowo said.

He also recalled that as far back as 1994, the exchange rate was around N22 to a dollar, while Nigerian airlines were selling one-hour in-jet for Lagos-Abuja or Lagos-Kano at N2, 200 and at the exchange rate of N22 that amounted to $100.

“Lagos-Abuja was $100 value in 1994, which was about 23 years ago. Today,the exchange rate has moved from N22 to N450. Today, an airline sells ticket for N16, 000, which amounts to $30.”

Olowo added that in an ideal setting, someone in government should have raised an alarm and enquired of the manager’s “plan to kill the airlines”.

“If I am in government, I will shut down the airline, because this is showing you desperation for cash flow. And they call it promotion. What kind of promotion? Exchange rate will never make you earn the right tariff because people will not be able to buy the ticket.

“So, you decide to reduce the price, meanwhile your cost is increasing. The airlines in Nigeria currently are not charging the right tariff after 23 years. If people cannot fly, then do not kill them. If I am the NCAA DG, I will shut any airline that charges less than $100,” he said.



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