Airline sustainability: Employing right principle
Scepticism
Any time a new airline signifies its intention to begin flight operations, the response of stakeholders is always not a cheery one.
The tendency is to see any start up airline as an oddity out of a magician’s hat, a kind of illusion that will soon fade away.
Those in aviation business and the general Nigerian public roll their eyes and say, “they have come again.” There is a sense that this too shall pass and hopefully, like the plague, pass over us.
An alternative to this posture of sceptical paralysis is to find a renew commitment on how to do business and see aviation as serious business and not as status symbol or one, which gives them access to huge loans, foreign exchange that are mostly diverted to issues not related to their core aviation business.
Few genuine ones
A few of the airlines are sincere with their services, just that the enormity of the business is taking a huge toll on many of them as they soldier on. But how long can they go in the face of hostile operating environment, tough economic reality, difficulty in accessing foreign exchange coupled with huge competition posed by mega airlines that are eating deep into their market.
The new order is competition and deregulation. These are the twin monsters that have perpetually put the carriers down or made them to struggle. How long can they struggle before something snaps?
Even financially well backed airline could not withstand the aero politics of aviation. Aside that, Arik was self-destruct; a situation that has put the carrier at the mercy of the Assets Management Corporation of Nigeria (AMCON). which came for a rescue mission the troubled airline.
Airlines evolvement
Since 1980s, several airlines have evolved, operate and collapse in Nigeria as a result of unfavorable business conditions.
The major operational issue identified with airlines is incoherent manipulation of the components of their business models in response to competitive pressures and external factors within Nigeria air transportation systems.
Airline business is highly challenging and involves complex and capital intensive operations. Regrettably, the traditional business models (Full – Service, Low – Cost, and Charter Carriers) that have been deployed elsewhere do not adequately address the dynamics of air transport environment in the developing Nigeria economy.
The air transport services in Nigeria has been on the increase since 1980s that has brought about 50 airlines between mid-1980’s and early 2000 including domestic airlines in the likes of Aero Contractors, Afrijet Airlines, Arik Air, Air Nigeria, IRS, Nicon, etc.
Expected growth
It was forecast that this contribution will grow in Nigeria consistently by 5 per cent over the next 20 years and that the increasing demands of air transport services has enabled airlines contribute about $0.4 billion and over 61,000 jobs to Nigeria.
Despite the forecast growth, the numbers of airlines depreciated to the extent that most of them no longer exist. In 2010, of the nearly 40 airlines operating in the 1990’s, there remained only seven operating scheduled flights in Nigeria as at today.
Although inconsistency in regulatory policies, deteriorating airports with obsolete facilities contributed to the failings, however, two major factors inclusive of negligence and managerial incompetence contributed to their failures.
Lack of best practice
Airlines negligence of industry best practices in aircraft operations and maintenances contributed to several aircraft crashes and folding up of the airlines while managerial incompetence led to fund misappropriations, manpower mismanagement and high indebtedness.
Not a few believe that there is need for financial capital by Nigeria airlines with associated direct and indirect employment impact to economic development given a comfortable regulatory framework, modern infrastructure and taking advantage of the inherent geographical location of Nigeria.
Expert’s view
Managing Director of Medview Airlines, Alhaji Muneer Bankole, at a press briefing to announce his airline’s suspension of Dubai route last week, admitted that it is practically impossible for Nigerian airlines to compete with mega airlines such as British Airways, Air France, KLM, Emirates, Lufthansa, Delta and others because of difficulty in accessing foreign exchange, tough operating environment and access to spare parts.
He said, “Let me tell you this. From this part of the world, it is absolutely difficult to compete with these other airlines. For you to compete with the big boys on the other9 side there are three basic things you need to do. We do not have the resources to get aircraft of $50million. You cannot access dollars. I am still looking for $2.3 million dollars from the Central Bank of Nigeria (CBN) to pay for lease of aircraft. Secondly, there is no place in this country or this part of the world where you have basic maintenance facilities in case anything happens to your aircraft.”
He lamented that aircraft remain on ground for so long because of lack of spare parts for airplanes that ordinarily should be flying.
“When an aircraft is AOG, there is no AOG support here; that is what is keeping the aircraft flying. When an aircraft is AOG, you know that somebody is there. In Europe, there are platforms. If we have issues of spare parts, we have to wait scanning all over Europe, America asking them whether they have parts or not. While doing this, we catch up flight to London and wait for the airline. That aircraft will remain on ground throughout that period”.
Last line
Aviation overview in Nigeria depicts that the industry is battered with socio-political, cultural and economic factors. However, there are still potential for sustainability of airline operations. A strong potential has been propelled by goodwill gestures including the government recapitalisation policies, tax-free aircraft parts importation among others.
