INTERVIEW: There are many unviable airlines in operation-Adefope
Mr. Femi Adefope is the Chairman of APG IET. In this interview with WOLE SHADARE at the just concluded APG Day held in Lagos speaks on the essence of APG Day, the general state of the travel industry in Nigeria, corporation between airlines, and other issues.
What is the essence of this event? Does this look like the first time we are having something like the APG Day in Nigeria?
No. APG, being a global organization is celebrated every year. We did it last year but we did not have as much publicity and of course, our people in Paris; in getting over this challenge, we have not been able to issue tickets. They wanted APG’s products highlighted and to indicate the large network that we have. We work with airlines and also with distribution agencies. It is not the first time we are having this.
I ask this because we did not hear much from APG. How does this conflict with GDS? What is the difference between APG and the various GDS that we have? You said in your presentation that you offer this service in countries where there are no GDS. Is it a GDS on its own?
You remember the New Distribution Capabilities (NDC) with different airlines. Even locally, airlines have started moving to the NDC. Lufthansa has been working with NDC for some time. Various airlines have been moving. They compliment. The biggest challenge with the GDS as far as airlines are concerned is the cost. The new NDC is not as expensive as working through the GDS because all the costs are shared. Then also, in terms of remittances because they are web-based. You have to effect payment however in web-based payment. For example, if you are ordering from JUMIA for example, you can pay in Naira and if it is some website offshore, you can pay in foreign currencies. It has become a global facility that is why.
Could you tell us how this APG works because some people do not know how it works?
I will send you the presentation because that is better. It is a facilitator for travel, assisting airlines. For example, the airlines’ products abroad like RwandAir doesn’t have a lot of offices globally but if they are part of the APG network, travel agencies in those countries can sell RwandAir products. You don’t need to have offices that are why they work with about 200 airlines.
For example, Camair from South Africa just appointed APG as their offline GSA in six European countries. For those people in South Africa can book with Camair to different destinations and pay over there when they arrive. They can just go and board the flight. We are hoping that Air Peace will eventually sign up with us so that we can represent Air Peace abroad in over 100 countries that we have, such that anyone who wants to come to Nigeria; if they arrive in Lagos and Air Peace can connect them to points beyond. Air Peace only operates in Dubai and Johannesburg. We are still working on it. Air Peace has not completed the process. We are hoping that they would do so very soon.
Talking about payment, in what currency will it be done without losing the value of the ticket costs?
At this point in time, it is done in the local currency. We have challenges in remitting airlines’ funds. We are still working on it. We don’t have a choice. The Central Bank of Nigeria (CBN) Governor has told us that Nigeria is a Naira currency market and we are strictly abiding by that.
Looking at the fluctuation of the Naira against the Dollars, how does this not impact your business?
I think each and every one of us is going through difficult times. We have to do our own bit. We have our customers to look after and the CBN Governor has promised that airlines and other facilitators like us will get the remittances soon and he is working very hard for us through IATA which is working with them. We work closely with the ICCS which is done through IATA.
How soon will the remittances be?
We are hoping. It is a tough environment.
What about the unscrupulous travel agents using your platform to carry out some nefarious activities?
They are mainly Indian travel agencies like Satguru, Wahiguru, Blueberry, and all others that are not Nigerians. They don’t have a stake in the economy of Nigeria and they are using the opportunities provided by different airlines to do SOTO tickets. Some of them have offices in several African countries. What they are doing as usual is exploiting opportunities in Nigeria. I have spoken to a few of my colleagues to say enough is enough. You cannot come into the country and start sabotaging us economically. They are the same group of people doing everything wrong at the Port, trying to export things illegally and unethical practices. That is our biggest challenge at this point in time and they are big. Their customer base is not here in Nigeria. Their customer base is outside of Nigeria. They are taking advantage of the currency situation. That is what they do. It is an area the CBN has not taken action on because nobody came up to complain but we the indigenous travel agencies are concerned and we are saying private companies in Nigeria should work on local content, and deal with Nigerian travel companies who are not here to sabotage our economy or take advantage of them. It is a major challenge. A lot of airlines have stopped selling SOTO tickets because these companies who are some of the top performers are doing it to service other countries because those tickets don’t even come to Nigeria. They sell them through Burundi and some other places.
What is your view about the travel industry in Nigeria especially after the COVID-19 pandemic? Do you see the industry recovering? What is your view generally about the industry?
So far, to a large extent, the industry has recovered. We are about 70 percent of where we were in 2019. Business travel was the slowest to recover for obvious reasons. Technically we are still in the pandemic because the World Health Organisation (WHO) has not declared the pandemic ended because of the implications on employees but tourism has picked up. If you go to Dubai today, you will see so many Nigerians there. You will think that we have all relocated. People are itching to go on holiday because it helps everybody mentally. That has helped to jumpstart the travel business. We are hoping that business travel would start which would be slowed down during the elections. We hope that things will work out well.
Can we say the same about domestic travel in view of the cost of aviation fuel and the many ups and downs in the industry? How far has it recovered in comparison with international travel?
First of all, the airline business is a loss-making business. Like Richard Branson said that he was a billionaire when he started Virgin Atlantic, today, he is a millionaire. He lost hundreds of millions. Nigeria is a very expensive country to operate in any area because we are import-dependent. The airlines are using largely imported products even with uniforms. If the uniforms are properly made, they are supposed to be fire retardant uniforms which we do not manufacture locally. They are being subsidized somehow like petrol. We are all driving around because our petrol is subsidized and the business plans unfortunately for some of these airlines are based on the perceived success of other airlines. People are not doing proper feasibility studies before they venture into the airline business. Again, when you go to borrow large sums of money, the interest rate is a lot. I am not querying how people put funds together; there should be more cooperation between airlines. There should be a local clearing house but because people don’t trust each other, you can’t enforce anything because you do not have a national identification card system here and that is one of the biggest drawbacks that we have here. Most of our other African countries have ID cards. There are many airlines operating that are not viable. People do certain things for the wrong reasons with the government not obliged to subsidise Jet fuel because these things are paid for in foreign currency and that is why foreign airlines are not complaining because that is part of their costs because that is how they pay anyway. If you look at our business setup, a lot of people are going into the airline business without proper business plans.
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