Why Nigerian airlines can’t survive with small aircraft size-Ibom Air’s COO

  • Entire operating aircraft less than 50
  • Nation’s airlines lack critical mass to compete-Fadugba

 

The Chief Operating Officer of Ibom Air, Mr. George Uriesi stated that it is impossible for any airline in Nigeria to have a sustainable operation with four, five, or six aircraft.

Uriesi, who spoke at the Aviation Breakfast Meeting with the theme, “Aviation in Nigeria: What Next? Held at the Eko Hotel and put together by Phillips Consulting Ltd held last weekend said that in terms of business plans, it would amount to getting stuck with five, six, or seven aircraft, explaining that no airline goes anywhere with such an amount of airplanes.

The former Managing Director of the Federal Airports Authority of Nigeria (FAAN) lamented that many airlines have come and gone never exceeding five airplanes in their fleet.

Uriesi

His words, “We already knew that in terms of our business plan, if you allow yourself to be stuck staying here with five, six, or seven airplanes, you are not going anywhere as an airline. We are aggressively growing. It is only in that growth that you are able to, first of all, generate the level of consistent revenue that allows you to be a successful airline business”.

“When I look and I see many of our domestic airlines, many have come and gone, never exceeding five airplanes in their fleet. I understand why that happened. We are still in the experiment. We are trying to do everything right and learn from our mistakes as we go along and maybe as Ms. Iyabo Sosina (a former Secretary-General of the African Civil Aviation Commission (AFCAC) has said, another five, or six years down the line, all of us will know whether this thing worked or not. I think we are on the right track.”

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He listed some of the problems bedeviling the nation’s aviation industry as lack of investments; struggle to meet critical forex obligations, and struggle to offer sustainable and reliable services, maintaining that the problems of Nigeria’s aviation are self-inflicted.

He noted that despite the tough operating environment, he urged the operators to deploy creative means of accessing capital necessary to help domestic airlines invest in modern equipment so that they can grow to compete favourably and achieve the economies of scale needed to make the transition, “wannabe’, “shaky”, scheduled carriers to successful and sustainable airlines”.

He called on the Federal Government to give domestic airlines access to Forex at the rate, adding that airlines are critical enablers and engines of the economy.

Nick Fadugba

Surprisingly, Nigeria has not been able to harness this market for its benefit. The beneficiaries are foreign airlines. The country’s airlines had been tasked to work together, with many saying that the acquisition of 10, five, or fewer aircraft is nothing in the world of aviation.

The total aircraft fleet in the Nigerian aviation industry of about eight major airlines put together is less than 50; a situation that boldly advertises the precarious airline business in the country.

The country is in a situation today where there are too many airlines that are too small, and their market is fragmented. None of the airlines has a critical mass, in terms of fleet or route network to become effective and to make money.

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Fleet depletion had seen a considerable reduction in the number of aircraft acquisitions by many of the operators.
Aero Contractors, which had over five airplanes with many helicopters has ceased operations and is yet to bounce back.

Dana Air which was grounded by the Nigerian Civil Aviation Authority (NCAA) over gross safety concerns is undergoing a rigorous audit with a view to bouncing back.

The airline before its operations were grounded on August 13, 2022, had about five airplanes. Azman has about four airplanes. Air Peace has over 18 aircraft and is now dominating the Nigerian sky.

It is not certain how many airplanes Overland has, there are indications that the airline’s fleet is made up of not less than six turboprop airplanes.

Cumulatively, scheduled airlines in Nigeria have less than 60 airplanes in service, underscoring the shortage of equipment for a market of over 200 million people with less than 15 million traffic annually.

The Chief Executive Officer of African Aviation Services, Nick Fadugba recently expressed worry over the high number of airlines in the country which does not have critical mass In terms of fleet size and routes to compete effectively and make money.

He said the entire fleet of Nigerian airlines combined is 40% of Ethiopian Airlines, just as he called on Nigerian airlines to work together, especially on training, maintenance, spares pooling, and spare parts purchasing as this would help lower their cost.

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Fadugba said, “We have a situation in Nigeria today where we have too many airlines which are too small, and their market is fragmented. None of the airlines has a critical mass, in terms of fleet or route network to become effective and to make money. ”

“When you look at Ethiopian Airlines, the combined fleet of all Nigerian airlines is about 40 percent of the fleet of Ethiopian Airlines. We have approximately 40 aircraft as a country, all our airlines. Ethiopian Airlines has 90-plus aircraft and most modern you can imagine. Not only that, but in the next few years, they will operate about 130 aircraft. So, you see Ethiopian Airlines is thinking on a bigger scale. You could say that Ethiopia Airlines has a monopoly, which is very different from Nigeria. ”

Nigerian airlines

“And in Nigeria of course we have a very vibrant economy which is not a monopoly. We have many airlines which is a good thing in a way, but the problem is that none of them to the best of my knowledge is really, profitable. So, what I will recommend for our Nigerian airlines is; They need to work together. They can compete for example on Lagos-Abuja or Abuja-Port Harcourt. They can work together on training, maintenance, spare pooling, on spare parts purchasing. ”

 

Wole Shadare