Shuttle service as new niche market

Shuttle airline service is being reenforced as a new entrant shifts away from the popular triangular operations, WOLE SHADARE writes

 

Game change

A departure from the past where airlines compete on the triangular routes of Lagos-Abuja-Port-Harcourt seems to be on the card.

 

 

Aero Contractors tried it in the 90s and became instant hit when it introduced shuttle services between Lagos and Warri, Delta state with about 50 seater airplanes.

 

 

It developed into smaller airports and reaped the benefits. Overland Airways is currently doing same connecting satellite airports to bigger aerodromes. They both developed niche market to their advantage.

 

 

Passengers are going to experience the real sense of air shuttle as Quorum Aviation Service has concluded plans to develop a niche market for the Nigerian travel industry.

 

 

With the plans to begin air services between Abuja and Kaduna just as the carrier is also increasingly tailoring service to specific market niches, sometimes to an extraordinary degree.

 

 

Danger on the road

 

 

The Abuja-Kaduna Expressway has become what many describe as a den of robbers, with many struggling to get on seats on the train that shuttles between the two cities.

 

 

Inspite of government’s efforts at trying to find a lasting solution to the security challenge, this could be a huge and rewarding investment for both the super rich and not too rich to travel in class and speedily in less than an hour while the train spends about two hours to Kaduna from Abuja. 

 

 

This service would provide the carrier opportunity to improve domestic links in Nigeria by making use of satellite airports in major urban markets to enhance the passenger experience.

 

 

The carrier believes that many will be willing to pay a little more for its own services that will “focus on pre-flight, in-flight, and post-flight services that create a simpler, more personalised and stress-free travel experience at every touch point.”

 

 

The airline believes its own flights could bring down journey times between the two cities by as much as one hour or less depending upon the exact origin and destination point, even though the flight time is slightly longer due to the use of smaller turboprop aircraft.

 

The deal

 

 

Quorum Aviation Service Limited and United Kingdom based 328 Dornier recently went into $2b investment venture for the country’s aviation sector.

 

 

328 Support Services GmbH, a wholly owned subsidiary of Sierra Nevada Corporation (SNC) is the type certificate holder of the Dornier 328 aircraft.

 

 

The Dornier 328 is a modern regional turboprop airliner with 30 seats. The aircraft got its certification in October 1993. Initially it was produced by Dornier Luftfahrt GmbH.

 

 

In 1996, Fairchild Aircraft acquired the Dornier Luftfahrt and formed a new company named Fairchild Dornier GmbH.

 

 

The agreement would provide the basis for the start of a new chapter in Nigerian aviation sector as the United Kingdom-based aviation support group would supply aircraft for Quorum Aviation Abuja-Kaduna air shuttle service project, which was previously announced by the Nigerian company and the Kaduna State Government in 2019.

 

 

The deal also provides opportunity for Quorum to be engaged in the selling of Dornier 328 aircraft in Nigeria and West Africa aside the setting up of aircraft maintenance centre among other aviation related services in the country.

Lack of sound business model has done incalculable damage to airlines especially Nigerian carriers. This yawning gap manifests itself in the choice of airplanes and routes they operate.

 

 

Beyond the prevailing harsh operating environment, the faulty business models airline operators often adopt may be responsible for the perennial low market penetration and short lifespan of local carriers in the country.

Policy review

 

 

 

Poor extant policies of regulators are not encouraging niche markets and other innovations to maximise the potential market at large.

 

 

There is creation where all operators converge on the small viable high traffic routes, with gross under-utilisation of available equipment and neglect of potential traffic.

 

 

Nigeria has about 180 million population and one of the lowest air traffic demands by population.

 

 

An airline operator, who does not want to be named, stated that there was no separating the faulty business models and wrong types of equipment from the regulatory policies that permitted them and allowed the industry to stagnate.

He said a business model was a dictate of what obtains in an operating environment but “if the extant policies do not support the kind of business one wants to operate, such is bound to fail irrespective of how wonderful the model is.”

He observed the new airlines in countries like Brazil, Ethiopia and even Ghana, were hardly allowed into already established local markets, to protect operating airlines from failing. So, new entrants must have their niche market.

 

 

 

According to him, “to do contrary is to end up with what we have here. You have a situation where all the airlines are concentrated on three routes, engaging in destructive competition because you are throwing too much capacity into the otherwise saturated market.

 

 

 

“These three routes give you 80 per cent of the traffic. In realistic terms, what is the break-even factor that each airline would have? It all tells you that the NCAA does not see the wisdom to licence airlines to focus on niche markets like Minna-Abuja or Minna-Sokoto and so on.”

Servicing niche markets

 

 

Like every other wide-serving industry, aviation must adapt its conventional business model to meet changing consumer demands.

 

 

Strategically diversifying the traditional business model will allow airlines to satisfy passengers, capitalise on international trade and serve potential niche markets that are currently underserved.

 

As air transportation becomes increasingly accessible to more people with rising incomes, airline companies are looking to serve specific niche markets with revised revenue models.

Here are some of the niche markets the aviation industry is shifting toward in the future of  business.

 

 

 

Low-Cost Carriers

Low-cost carriers (LCC) are hardly a new concept in the aviation world, as no-frills, discount air travel has been available for decades. However, what’s predicted to expand is the sheer volume of low-cost airline companies available to consumers, as well as the selection of routes. LCCs used to be solely reserved for short-distance flights, but industry business experts predict that long-haul LCC options will increase thanks to the development of more LCC hubs around the world.

 

 

Middle ground

 

 

Consumers are increasingly seeking a middle-ground option between luxurious-yet-expensive business class and affordable-but-cramped economy seating.

 

 

Many airlines are now offering premium economy seating options which give passengers additional legroom and some extra perks for an additional fee.

 

 

The limited availability of premium economy seating on airlines drives demand within a specific consumer segment looking to increase their comfort while still keeping within their budget. This future aviation trend will likely expand further, particularly within long-haul and transcontinental routes.

 

 

Last line

The new venture makes travel easier and less stressful to/from key markets in the busy and congested aerodromes.   

 

 

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