Investigation: Why Nigerian carriers can’t compete

The fragmented and microscopic nature of Nigeria’s domestic aviation market, are majorly responsible for why the nation’s carriers are not competitive, Woleshadare.nethas learnt.

Investigations revealed that the total number of aircraft in the fleet of eight Nigerian airline operators is 78 aircraft according to the records in the custody of Nigerian Civil Aviation Authority (NCAA).

This is a far cry and pales into insignificance compared to other places in Africa where a single operator operates all the aircraft of Nigeria’s domestic aviation.

More worrisome is that out of these 78 registered airlines, less than 30 per cent of them are in actual operations for domestic or scheduled operation, thus signposting that operators compete against each other and had persistently rejected the option to merge their operations for efficiency.

According to a list of scheduled and non-scheduled operators from the NCAA sighted by this newspaper, Arik had 27 registered aircraft. But the carrier is left with less than nine airplanes in its fleet shortly before the Assets Management Corporation of Nigeria (AMCOM) took it over, reportedly as a result of mismanagement by the owners over N400 billion debt.

Although, AMCON claimed it had since turned around the shaky airline, but the number of aircraft is still less than 10. Aero, on its part, has seen its operations cut by over 70 per cent as a result of dearth of airplanes. The airline has no funds to bring back some of its airplanes that are out on checks.

A visit by this newspaper to the airline’s hangar last weekend showed a state of rot of once highly prosperous airline. Also, its oil and gas services have equally been dealt a blow by other airline services doing onshore services to oil installations.

Some of Aero’s aircraft are Hawker 800 with registration 5NJMA, registered on March, 4, 2005, manufactured in 2004; A330-300 with registration 5N-JIC, manufactured 2008; A330-300 with registration 5N-JID manufactured in 2008; B737-700 (5N-MUB) manufactured in 2007; B737-7BD (5NMJD); B737-7GL (MJE); B737-700BD MUJ); B737-7BD, among several others.

Most of these airplanes are seen grounded on the tarmac of both the domestic and international airport tarmacs of the Lagos airport. At a time, Arik had and still has the youngest aircraft fleet, but the airline is now a shadow of its former self.

Air Peace, which is now considered the biggest airline in Nigeria as a result of fleet size and size of operation, has 11 aircraft in operation. Some of the aircraft types are B737-300 (5N BQO); B737-300(5NBQQ); B737-524 (BQP); B727-36N (BQU) manufactured in 1998, 1997, 1995 and 1997 respectively.

FirstNation Airways has two aircraft – Airbus A319-113 with registration 5N-FND and 5N-FNE manufactured in 1997. Others are Overland Airways with nine, followed by Medview, Dana, Azman and Aero with five, six and 16 respectively.

Despite the huge seat capacity on the domestic routes, most Nigerian airlines fly empty most time of the day, thereby raising the call by stakeholders that they should merge or interline their operations to cut cost and be profitable.

Aside the triangular Lagos- Abuja-Port-Harcourt, most other routes are not profitable, while the triangular routes are over saturated because virtually all the carriers operate there.

Speaking to our reporter recently, President/CEO Sabre Network, West Africa and President, Aviation Round Table, Gabriel Olowo lamented that 30 per cent of the failure of the airlines are due to mismanagement by the owners and 70 per cent from government, coupled with the harsh economic environment.

His words: “I have been in the sector since 1973 and I have seen the airlines failing within a space of 10 years they started operations. So, there is a common factor. The problem of corporate governance.