Saving local airlines amid pandemic, aeropolitics
World airlines are revving up to return to recovery path after months of lockdown. Amid uncertainties, stiffer competition awaits the scramble for the depleted market. In all of these, protecting the local airlines should not be an afterthought of both the government and regulators. WOLE OYEBADE writes.
Global airlines are once again taking to the skies as nations ease the lockdown to salvage the economy. With the curve still not flattening in many parts of the world, a new mode of living and of doing businesses are now emerging. It is the era of a new normal!
Unlike the golden age of modern air travel that just rolled by unannounced, airlines are also required to do more but for less in the COVID-19 era.
Indeed, the new safety measures are imperative to prevent further spread of the deadly virus with all expenses on the airlines. But majority of the airlines are cash-strapped and in financial distress due to the lockdown. While further delay is dangerous, resumption offers very little hope as the travelling public are wary of getting infected. Certainly, it is going to be a difficult long-haul recovery for all.
President of Emirates, Tim Clark, said it could now take up to four years for the Dubai-based airline to fully recover from the Coronavirus crisis. The airline previously suggested it would take 18 months before travel demand returns to a “semblance of normality”.
Aviation consultant, Chris Aligbe, reckoned that the recovery would be tedious for both operators and agencies to survive without a great deal of support from the government.
Aligbe said no one should expect normalcy to return to air travel in Nigeria until about 18 months. Because, in the absence of vaccines, travellers will still be afraid of infection, there will be restrictions in some countries, and then due to economic recession, the lack of funds will prevent people from travelling like before. “This will have impact on airports and the agencies,” Aligbe said.
The differences in how long the recovery might take notwithstanding, Clark and Aligbe were unanimous that the airlines’ survival strategy would depend more on how they brave the odds, exploring new opportunities and boost their competitive edge in the race for survival that has just begun.
The worry for Aligbe and many stakeholders in Nigeria is the readiness of the local airlines and flag carriers among them to make the most of the domestic market and favourably compete on the international front.
Braving the odds amid pandemic
Indeed, local airlines are some of the worst hit businesses during the lockdown. To date, estimates have it that the sector has lost as much as N180 billion in total, with airlines alone accounting for N21 billion monthly. All the airlines reduced staff strength by 80 per cent.
Air Peace airlines, however, demonstrated its capacity for international operations during the period. The airline evacuated about 210 Israelis from Nigeria to Tel-Aviv on March 29, 2020, repatriated about 301 Chinese from Lagos airport to Guangzhou, China on May 28, and also returned 286 Indians to Kochi from Lagos on May 31, 2020.
Preceding the evacuations were some special missions in support of the Federal Government to airlift medical supplies from China and Turkey.
The Chairman and CEO of Air Peace, Allen Onyema, said that the airline was grateful to these countries for the confidence they reposed on the airline, which in no small measure portrayed their support for the development of Nigerian airlines.
“Israel blazed the trail when it approved the evacuation of its citizens from Lagos and Abuja to Tel-Aviv, followed by China and India. For the three countries to engage Air Peace to carry out the evacuation exercise speaks volumes about the level of confidence they have on the airline and its safety standards, which has been attested to by the International Air Transport Association (IATA) Operational Safety Audit (IOSA) certification of our airline.
“What the three countries have done will help in creating and sustaining jobs for Nigerians and by identifying with a Nigerian carrier at this time shows that they love our country and their support has challenged us to do more by improving on our achievements,” Onyema said.
He added that though the lockdown was a trying period for all, the local airlines had consistently demonstrated that they could represent Nigeria well in fair aeropolitics and with the support of the Federal Government.
He said further that the bane of Nigerian airlines has been the feisty aeropolitics often played by foreign airlines, which is bound to worsen in the quest for survival in the COVID-19 era. The recent rejection of the airline’s proposal to evacuate Nigerians from Canada, he said, was not unconnected with aeropolitics.
He said it behooves on the Federal Government to protect the local airlines from alleged preference for foreign carriers, multiple entry slots already accorded and the odds often stake against reciprocating local carriers overseas.
The Chairman of the Airlines Operators of Nigeria (AON), Capt. Nogie Meggison, said it was unfortunate that the State officials gave preference to foreign airlines over Nigerian carriers during the evacuation exercise, adding that such an attitude should not be allowed as flights resume.
The AON said government’s action was disappointing after it had made earlier statements that it would engage three domestic airlines that have capacity and airplanes to carry out these evacuation exercises.
Meggison described the action of engaging foreign carriers to evacuate Nigerians as economic sabotage!
“Our Government is putting money in the aviation sector to support their survival and somebody is giving Nigerian jobs to outsiders. How do we pay back the loans? How can our airlines rejuvenate their staff without money? How do we keep our airlines afloat? How do we contribute to Nigeria’s Gross Domestic Product (GDP)? So, we are calling on the government to probe those involved in this mischief because what they have done is counterproductive and they should cancel this foreign contract.
“It is painful for government to bring out money to support aviation and some officials will be undermining government’s efforts. Azman has two Airbus A340-600, with 340 seats and a range of 14 hours. They are wide-body aircraft yet idle. Max Air has three Boeing B747-400 – 420 seater with 15 hours flight range – parked on ground. And Air Peace has three Boeing B777-300 – 370 passengers and 16 hours range – parked.
“All these airplanes have four sets of crew and engineers all seating at home in Nigeria. AON has the capacity to airlift these Nigerians. Just imagine how the money earned would have strengthened the operations of the airlines and the Nigerian GDP during this period. Each aircraft has four sets of pilots. Their action does not add up. That is not how to support your own, and such should be part of the recovery era,” Meggison said.
A potential market for all
Certainly, the local market will be crucial to global recovery effort and for airlines operating the route. The foreign carriers’ attraction to the most populous black nation is not far-fetched. With a population of 200 million people, large middle-class, an airport in almost all the 36 states, and just an average of six-hour flight to most parts of the world, Nigeria surely has the market any airlines would desire.
Before the COVID-19 outbreak, 34 foreign carriers operated in and out of Nigeria almost on daily basis. Among them are nine African carriers. Besides Air Peace that recently opened the Lagos-Dubai operations, only Arik Air is on the regional routes.
A recent fact-check by the AON revealed that the foreign carriers account for over 90 per cent of about five million international passengers that travel through Nigerian airports yearly. The capital flight is in excess of $3 billion (N1, 050 trillion) yearly.
Recall that the Bilateral Air Service Agreement (BASA) provides for reciprocity by the number of flights and destinations. Not for lack of trying to reciprocate though. It has always being a tale of woes for local airlines on most competitive international market without the governments’ protection that often sustains national carriers.
Apparently in recognition of the unusual strength and fleet size from a local carrier, the Federal Government lately allotted some of the bilateral routes for reciprocity. But stakeholders said the good intention would yield fruits with complementary support and protection of local interest.
From all indications, Air Peace airlines has on the table direct flights between Lagos, its hub, and Mumbai in India, Milan in Italy, Jeddah in Saudi Arabia, Lisbon in Portugal, and Brazzaville in the Democratic Republic of Congo.
These are on the heels of earlier approval for the airline to run direct flights from Nigeria to Dubai/Sharjah in the United Arab Emirates, Johannesburg in South Africa, Guangzhou in China, London in United Kingdom, and Houston in the United States.
Chief Executive Officer, Centurion Securities, Group Captain John Ojikutu (rtd), however, said granting multiple entries and frequencies to foreign airlines, are more of the problem than the solution to uncompetitive nature of the local airlines.
Ojikutu said government should rather limit the routes to just two per airline, with one in the North and another in the South, but not Lagos and Abuja for an airline.
He explains the rationale: “How can our airlines develop capacity when any foreign airline can fly to all four or five of our international airports? How can our airlines develop capacity when the exclusive market on our domestic and regional routes is left open to foreign airlines? Which law allows only Saudi airlines to airlift nationals of other countries for Hajj?
“Would British allow Arik or Med-View to fly to Gatwick and Heathrow the way the British Airways flies to Lagos and Abuja? Or would the U.S. allow Nigerian airlines to have multiple destinations the way Delta Air flies to Abuja and Lagos.
“Worse still, which African country would allow a Nigerian airline to gallivant in her country the way Ethiopian airline is gallivanting to all of Nigeria’s five international airports? We need to call government’s attention to this lopsidedness, else there is no room for capacity development for the domestic airlines,” he said.