Experts task airlines to partner foreign investors

Aviation experts said for the aviation sector to grow, there is the need to build airlines that would stand the test of time by going into partnership with foreign companies and other willing private investors.

To them, airlines need strong financial muscles to make them survive by opening it up to several investors and spread the risk. A former Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr. Richard Aisuebeogun, stated this in a chat at the weekend.

Aisuebeogun stated that the report of a survey carried out in May, 2016, noted that in the last 12 years, nearly 37 airlines were launched in Africa and almost all of them had failed, 25 of which are from Nigeria.

He stated that today, only about 12 Africa airlines have inter-continental operations, stressing that the more “we realise that airlines are not a luxury but a necessity in our remote villages and hub cities, the more we can change our thinking and make sustained efforts to ensure that airlines are supported and developed for the accelerated development of our economies and improvement of our livelihoods.”

Aisuebeogun who is one of the very few qualified and graduate of (Global) International Aviation Professional (IAP) noted that the potential of aviation in Africa is under-utilised, but for the region to realise its potentials, aviation, particularly commercial air transport, must be prioritised by government.

He disclosed that today, air transport is recognised as an important element in the achievement of the United Nation’s Vision 2030 Sustainable Development Goals, which seeks to improve individual livelihoods in all corners of the globe, adding that air transport is also vital to achieving the African Union’s (AU) Agenda 2063, which seeks to transform Africa’s economy from its current largely underdeveloped state to hugely developed economies.

According to him, Africa has the potential to be a significant force in aviation on the back of robust economic growth forecasts, with Africa being among the fastest growing economies worldwide, but the continent’s airlines carry only l.3 per cent of global air cargo.

“These small proportions contributed by Africa to global air cargo indicate that Africa has a huge potential to grow,” he said. He also observed that the performance of the African aviation industry is lagging behind those of the rest of the world at less than three per cent of global revenue passenger miles (RPKs).

“The growth is heavily constrained by the high industry costs, inadequate infrastructure at several airports, slow implement tion of the Yamoussoukro Decision (liberalisation of Africa’s airspace) and lack of a single traffic rights negotiating body with respect to third parties like the EU.

Nonetheless, demand for air transport has increased steadily over the past years with passenger numbers and freight traffic growing significantly,” Aisuebeogun said.

He stated that the cost of operation in Africa’s environment is among the greatest challenges to African airlines and these include relatively high taxes, charges and fees.

IATA has also pointed out that these high charges are part of the reasons why airlines have short life span in Africa. Also, Managing Director, Bristow Helicopters (Nigeria), Capt. Akin Oni, reiterated that Nigerian operators need to operate and challenge big foreign carriers like KLM, British Airways and others who come into Nigeria.

“When your money, my money is involved, we’ll be checking what the management is doing. The moment you introduce government into it, you create complexity and we don’t have the structure in Nigeria.

I see huge opportunities in aviation in Nigeria and Africa.” Oni explained that Nigerian carriers struggle because of huge exposure to dollar, saying that speaks a lot to the economy.

He stated that when the economy improves, there would be growth in the country’s Gross Domestic Product (GDP), adding that airlines travel is tied to GDP. “Once we see that change, there will be a change in aviation. We need airlines built on solid foundation,” he added.

Wole Shadare