Why foreign carriers flourish on Nigerian routes
Notwithstanding the harsh economic reality, the classification of Nigeria as high yield and mixed income route would continue to make foreign carriers flourish. Managing Director of a leading airline, who preferred anonymity, expressed the view.
He said that the pulling out of Iberia from the route was not because it is not lucrative, explaining that the European airline hadn’t built the type of capacity created over the years by airlines such as British Airways, Air France-KLM, United, Delta and other mega carriers. He added that the action would be to the great advantage of BA.
Both BA and Iberia are owned by International Consolidated Airlines Group (IAG), indicating that the British carrier could clandestinely fill in the gap for Iberia following Iberia’s inability to grow the route over the years.
The airline chief disclosed that foreign carriers are getting high yield on Nigerian route, stressing that many Nigerians even enjoy paying for their tickets in the United States currency; a situation he said pleases the airlines.
He said: “Foreign airlines are getting high yield on this route. It is a mixed income route. Nigeria is not a single currency route.
So, it will be difficult for these major airlines to stop operations. We do not have airlines to even challenge them.” Experts are of the view that passengers from Nigeria pay more than travellers from Ghana, South Africa and other countries in Africa.
This is compounded by lack of functional national carrier or competitive flag carriers to force down airfares. Business and First Class cabins are usually sold out because of high travel taste of Nigerians, coupled with demand that far outweighs supply, forcing these international airlines to jerk up fares at will.
The pulling out of Iberia from the Spain-Lagos route had raised fears that other mega airlines could follow suite, but two of the leading foreign airlines restated their commitments to the Nigerian routes.
The Spanish national carrier, Iberia Plc, operating under the Oneworld Alliance had penultimate week announced plans to cease operations to Nigeria from May 12, 2016, citing dwindling low patronage for the action. Regional Manager, West Africa of British Airways, Mr. Kola Olayinka, while speaking to New Telegraph, said it is inconceivable for BA that has operated in Nigeria for 80 years to leave a route it helped develop.
He agreed that the nation’s economy was tough at the moment, but gave assurance that the challenge would be resolved very soon. On the $600 million airlines’ funds allegedly trapped in Nigeria, Olayinka said the International Air Transport Association (IATA) would be in the best position to give the actual figure, just as he declined to be specific on the BAs funds stuck in Central Bank of Nigeria (CBN).
He, however, confirmed that foreign companies including airlines held a meeting with the House Committee on the Federal Inland Revenue (FIRS) in Abuja recently. He described the meeting as fruitful, but noted that the carriers’ inability to repatriate its revenue was affecting its performances in the country.
