‘How Nigeria’s poor airports killed over 30 airlines in 30 years’
High mortality rate of local airlines was, yesterday, attributed to the decrepit infrastructure and inefficient service delivery at Nigerian airports nationwide.
The airport-factor, stakeholders said, has often been overlooked, yet remains central to airlines’ survival, growth or demise in global aviation.
Former Managing Director of Federal Airports Authority of Nigeria (FAAN), Richard Aisuebeogun, at the opening of the Aviation and Cargo Summit (CHINET 21) in Lagos, said the role of airports in airlines’ failure has been more pronounced in the country in the last three decades.
Records at the Nigeria Civil Aviation Authority (NCAA) showed that more than 30 operating airlines have closed shops in the last three decades, with only 18 in scheduled and non-scheduled operations to date.
Aisuebeogun said though some failures could not be absolved of mismanagement, corruption, faulty business models and economic factors, the poor viability of 20 out of the 24 airports accounts for low aircraft optimisation and revenue yield for airlines to survive.
He noted that airports and airlines are mutually dependent for survival. The International Air Transport Association (IATA) earlier benchmarked airport viability on five million passengers a year. And that is dependent on population in a region, economy and tourism potential.
However, except for Lagos and Abuja airports, none of the other 22 airports pulls as much traffic yearly to boost revenue of airlines and aviation generally.
He said funding remains the major issue in aviation development. “Our airports are operating at a loss. By 5:00pm or 6:00p.m., they have already closed for the day, which takes the business off the airline. But without optimal services and night operations, airlines cannot survive. That is why the airline mortality rate in this part of the world is staggering.
“There are about 25 airlines that have collapsed before 2010 and another five in the last five years. FAAN is operating at a loss, using profit from Lagos and Abuja airport to fund other airports. I think we need to start rethinking operations of the airport for the survival of all parties, not just the airlines,” Aisuebeogun said.
A panelist at the opening session and Chief Executive Officer (CEO) of Belujane Konsult, Chris Aligbe, reckoned that both airlines and airport have always operated in silos, earning the operators only 60 per cent aircraft utilisation.
“Our airports are closed by 6:00pm, or an airline will have to induce the service providers to run into the night. That is not a sustainable system for aviation business. There is a need to transform the airport sub-sector to develop the airlines. That is why I support airport concession. We need a standard that will give us the desired change. And until we move out of the cycle of doing things the old way, we will not get it right. Why generate funds from one airport to run the other 18 that are not viable to sustain themselves? If they cannot survive, then let them die,” Aligbe said.
Group Capt. John Ojikutu (rtd) said though revenue generated and remittances of FAAN rarely add up, the airlines themselves cannot be absolved from operating the wrong business models.
“I don’t see how any airline will survive charging below $100 airfares on one hour flight services. In the 90s, the same route cost between N3500 and N4000, which is not below $100. That was the era of locally sourced Jet-A1. Now, I see airlines charging flights of less than $70 and they want to survive? No. I think the Nigerian Civil Aviation Authority (NCAA) really needs to wake up to its responsibilities in economic regulations and sanitise the sector.”
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