Aviation Transport

New Airlines Spring Up Amidst Drop In Revenue

Players in the Nigeri­an aviation industry have expressed con­cerns over the emer­gence of new airlines at a time the global industry, including Nigeria’s, was experiencing a huge reduction in revenue and air travellers.

Already, airlines’ ticket sales in the country declined by $132 million in the first quarter of 2020 with a total of $151.09 million revenue made, compared to $282.35 million sales recorded in the previous year, according to data obtained from the Na­tional Association of Nigeri­an Travel Agencies (NANTA).

The data showed that about $57.79 million worth of tick­ets were sold in January 2019 alone.

 Ticket sales figures for Feb­ruary of the same year stood at $51.52 million; March re­corded $80.55 million; April, $92.59 million; bringing the total to $286.36 million.

Those spoken to by our correspondent warned that if quick actions to save the sector were not taken by the government, existing and new airlines may close shop within the year.

 Capt. Musa Nuhu, the Di­rector-General of the Nigeri­an Civil Aviation Authority (NCAA), said recently that no fewer than three new carriers would commence operations in 2021.

“We are expecting maybe three or four new airlines to come on stream within the next three or four months.

“I can say that as a regula­tor, we are here to support any applicant, whether a nation­al carrier or a private based, to go through the process of proper certification and sit down with them to resolve any challenges or difficulties they may be going through and give them approval.

 “However, I cannot disclose the level of processes of any airline, but we are ready to help anybody that comes.

“If you want to do busi­ness, the better for me; the more airlines that operate, the better for me, and the bet­ter the impact on the aviation industry”, he said.

About a week ago, United Nigeria Airlines, a start-up carrier, commenced sched­uled flights in the domestic scene with plans to expand reach to the West Coast.

Information also gathered indicated that Green Airways Africa and Cally Air owed by the Cross River State govern­ment may commence flight services before the end of this quarter.

 Nigeria Eagle, sponsored by Asset Management Corpo­ration of Nigeria (AMCON), already has two aircraft paint­ed in its livery.

Also, Nigeria Air, the pro­spective national carrier, was expected to come on stream in 2021.

The stakeholders ex­pressed worries over the in­vestors’ boldness to float new airlines at a time of global meltdown, air travellers’ indif­ference to the sector and con­sistent call for a government bailout for existing carriers, occasioned by the outbreak of the COVID-19 pandemic.

Alex Nwuba, aviation ana­lyst, said the commencement of new airlines in Nigeria at this time was bad for the operators, especially as the existing airlines struggle to remain in the air.

 Nwuba also said that the palliative released to the oper­ators recently by the Federal Government were ill-timed, stressing that it would have a peripheral impact on the larger sector.

“United Nigeria Airlines has taken the most practical approach, focus on one mar­ket at a time and bite off-mar­ket share until you dominate it, then move to others.

“It is a great strategy but bad in an industry where volumes have declined and incumbents have to struggle with start-ups in the limited pool of customers. It is good for United but a challenge to the entire industry.

“The palliatives are ill-timed and will contribute only marginally to improving the sector.

 “It needed to be given in greater quantum and more focused. It is not just about handing out cash, but many input components of the in­dustry need to be adjusted – fuel price, airport services, navigation charges, airline employees and infrastructure issues.

“We need to stop taking bites off problems that can be comprehensively addressed.”

Besides, Nwuba called on the Federal Government to adopt a more comprehensive strategic plan for the growth of the industry.

Group Capt. John Ojikutu, another aviation analyst, said the only way airlines could survive in the industry today was through the acquisition and use of small aircraft like E195-E2 and other smaller aircraft.

Besides, he declared that the recent palliatives given to the airlines by the govern­ment may not save them from collapse due to the humon­gous debts recorded during the closure of the airspace against commercial flight operations.

 “First, it could be making sense for them to go buying low number seat aircraft that are on the ground in devel­oped commercial aviation countries.

“These aircraft have pas­senger seats of about 100 or less, which were the types of the F27/F28 for a quick turn­around with minimum or no delays.

“Secondly, if regular passenger statistics is to be considered, government and political officials make over 60 percent of the annual pas­senger traffic.

“Moreover, the election year is gradually approach­ing for the barrage of politi­cal campaigns and the move­ments of the politicians are done mostly by air to most state capitals. These low seats aircraft would be at hand.”

On how to sustain the in­dustry, Ojikutu advised the government to develop sep­arate policies for Nigeria do­mestic, regional, continental and intercontinental airlines and review multiple destina­tion landings to foreign air­lines by the government.

He said: “We cannot con­tinue to allow foreign airlines to dominate our domestic routes.

“Therefore, no foreign airlines should be allowed to operate from Lagos to Abuja, and any other in the alternate regional zone. However, any airline can make multiple fre­quencies to these airports of its choice.

“Our airports should be categorised A to D based on the number and quality of services provided.

“While Category A can charge a maximum of 100 per­cent, B can charge 75 percent, while C can charge 50 percent and D can go for 25 percent.

“These should give the air­lines, too, the choice of which airports to operate based on its earnings.”

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