Business

Foreign airlines await ‘lucrative’ Nigerian sky

Pressure for resumption of international flight operations may have paid off. Foreign airlines ramp up plan to begin quest for predatory Nigerian route as local airlines still have nothing to offer, WOLE SHADARE writes

 

Pressure pays off

 

The pressure for Nigeria to reopen its airspace after over five month hiatus occasioned by COVID-19 was huge.

 

Despite the evacuation/humanitarian flights approved by the Federal Government to give stranded Nigerians and other nationals a window of opportunity to be with their families and loved ones did not assuage the pain many people encountered. Nigeria suspended all flights in March after the country’s coronavirus cases increased from 12 to 22.

 

The initial ban was meant to last for one month, but as cases continued to grow, the ban was extended. Despite the window of evacuation, many people could not afford the exorbitant fares put together by many countries, which are paid for by desperate travelers. So, they decided to wait for when the ban on international air travel would be lifted.

 

Prayers answered

 

That prayer was answered when the Minister of Aviation, Hadi Sirika, on August 17, 2020, disclosed on the micro-blogging site, Twitter. “Glad to announce the resumption of international flights from August 29, 2020, “Beginning with Lagos and Abuja as we did with the domestic flight resumption,” he tweeted, adding that all protocols must be observed.

 

“Protocols and procedures will be announced in due course. We thank you for your patience,” he added. The minister said Nigeria’s international airports had reached advanced stages of preparedness for the resumption of international flight operations.

 

Airlines in bated breath

 

Since the announcement, foreign carriers are dusting their airplanes with a view to starting immediate operations into the country.

 

Many of them are at various stages of compliance with the protocols they need to comply with before they are given the green light to fly into Lagos and Abuja; two airports that are being used for experiment before more other international airports are thrown open.

 

Virtually all foreign airlines have not met the condition but  there is hope that they would do so before or after the planned August 29 resumption. Virgin Atlantic, at the weekend, said it would be welcoming customers back onboard as it makes a return back to Lagos on September 10, 2020.

 

A statement from the carrier said to ensure the health and safety of customers and crew, Virgin Atlantic was implementing additional measures to offer peace of mind at airports and when taking to the skies.

 

These include enhanced and thorough cleaning practices at check in, boarding gates and onboard including the use of electrostatic spraying of high-grade disinfectant in all cabins and lavatories before every flight, ensuring no surface is left untouched. Safe distancing will also be adhered to wherever possible, and mask wearing will be required throughout the journey.

 

All customers will be provided with a personal Health Pack for their health and safety, which will contain three medical grade face masks to be worn on-board, surface wipes and hand gel.

 

The allure Yes, Nigeria’s aviation market may be regarded as small, weak and fragmented, but the allure the route brings to many foreign airlines including African carriers brings to question what they see that have made them remain including many asking for extra frequencies.

 

The contribution of the aviation industry to Nigeria’s economy (in nominal value) increased by 0.14 per cent in 2019, as it rose to N198.62 billion, according to the National Bureau of Statistics (NBS).

 

But there are concerns that the feat would not be repeated or surpassed in 2020, as the industry has suffered expected decline due to coronavirus pandemic. The year started rough for the aviation industry globally with the spread of coronavirus.

 

This led many countries to place travel ban or restrict foreign flights into their countries. Aside European, Gulf, and American airlines, African airlines like Ethiopian Airlines, Kenyan, South African Airways, EgypAir, Africa World Airlines (AWA), ASKY are excited to begin their predation on the market, which unfortunately is underserved by Nigerian airlines and likely to remain so for a long time to come.

 

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

 

Air Peace, which is regarded as the country’s biggest airline, in truth, is smaller than the weakest airline in Europe and elsewhere.

 

It lacks the capacity and capability to serve West African market not to talk of markets in the continent. Notwithstanding the harsh economic reality, the classification of Nigeria as high yield and mixed income route would continue to make foreign carriers flourish.

 

Experts’ views

 

Managing Director, Aero Contractors Airlines, Capt. Ado Sanusi, said: “The high yield has made them to see Nigeria as an attractive market. High yield means that if you look at how they calculate it, it is price per seat kilometer. “What it means is that in a simple man’s language, it is flying from point A to B, a difference of, let’s say, 10 klm and you charge let us say N15.

 

That means you are burn  ing the same fuel and you are almost having the cost for the same yield. The yield is what is attracting them. It is a short distance of six hours. The ticket price is more than anywhere in the world.

 

“The same thing is applicable with airlines on the continent. Most of our tickets are quite expensive out of Abuja, out of Lagos, Enugu anywhere out internationally. They like those tickets because they tend to breakeven quickly. Lufthansa has a lot of business class travel out of Nigeria for instance.” “The moment they have filled half of their business class, they have broken even.

 

The people at the back are just profit and most Nigerians fly business and first class. Once they fill the front cabin, the rest is more profit for them and if you go to Europe on the other hand, people like to fly tourist class,” he added.

 

Chairman, African Business Aviation Association (AfBAA), Nick 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 are major constraints in the very complex aviation industry in Nigeria.”

 

Last line

 

Undoubtedly, Nigerian aviation sector has great market, especially with increasing population of the middle class. The biggest threat to the Nigerian domestic airlines is from foreign operators. They need effective strategy. Addressing these challenges will significantly unlock the industry’s potential for future growth.

 

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