Airlines need merger, consolidation to survive-Stakeholders

The merger of airlines into two strong mega domestic airlines has been described as panacea to the frequent collapse of Nigerian airlines.

This was the view of stakeholders, who spoke to Woleshadarenews on the side-line of an aviation seminar held recently in Lagos.

They disclosed that the merger of four or more domestic airlines would help to eliminate frequent demise of airlines, which lifespan is put at 10 years.

Many of Nigerian airlines do not last more than 10 years aside airlines like Aero Contractors and a few others that operated for a very long time.

Arik, Overland and Aero have withstood the test of time despite operating in tough business environment.

According to them, consolidation of airlines will increase investment and benefit the average consumer.

The stakeholders, under the aegis of Aviation Round Table (ART), pointed out that in the last two decades, more than 50 airlines entered the market, with most of them disappearing as quickly as they started via mismanagement or through insolvency.

They maintained that between 1979 -2013, over 50 airlines went into bankruptcy.

One of the operators and the Managing Director of Air Peace, Allen Onyema, claimed that his entry into the industry had resulted in lower airfares and increased frequencies. 

He further said that he had made efforts in assisting other airlines in making profits despite barriers such as high taxes, airport fees and strenuous certification process, which he noted makes it very difficult  for operators to attract investment capital.

Onyema stated that lack of access to runway slots and terminals gates at other African and international airports limit Nigerian airlines’ ability to enter and compete in the international aviation market.

He, however, stated that Air Peace had recorded an impressive 80 per cent load factor on its maiden international flight, which he reiterated is expected to rise.

He added that the airline’s frequency of operations would give it room to review its operations and gradually improve until it achieves excellence in all its routes.

He also contended that the rights of Nigerian airlines should not be given to international carriers, hinting that local carriers should be encouraged,

“Nigerians should learn to be patriotic and not negate the policies of the industry,” he said.

He noted that the operational environment in Nigeria was ripe for mergers, especially if the proposal is for two competitors who want to partner.

“For instance, an airline, which concentrates on international routes, may want to merge with others that focus on local routes,” he noted.

Also speaking at the event, the Managing Director of Nigerian Airspace Management Agency (NAMA), Capt Fola Akinkuotu, said that the system of merger had proved to be highly reliable and efficient in African countries like Ghana, Kenya, Namibia and Ethiopia.

He pointed out that consolidation in the aviation industry would benefit the consumers, curb spike in airfares, increase the availability of seats and equally yield more non-stop options between local carriers served by several airlines.

According to them, without consolidation, airlines will increasingly find it difficult to offer efficient services, a situation that could eventually lead to  some of them going under.

Wole Shadare