Explainer: How Aero, Dana, Overland defy lifespan myth
It is on record that in the last 80 years since the first flight operations in Nigeria, domestic airlines have active operations between five to 10 years and struggle to stay afloat thereafter.
High maintenance and operational costs, multiple taxations, lack of corporate governance and financial transparency have been generally identified as killers of the airlines.
BusinessDay’s investigations show that in the last 27 years, over 30 airlines have closed shop in Nigeria, with profitable operations lasting for less than 10 years.
Some of the defunct airlines include ADC Airlines, African International Airways, African Trans Air, Afrijet Airlines, Afrimex, Air Atlantic Cargo, Albarka Air, Al-Dawood Air, Arax Airlines, Barnax Air, Bellview Airlines, Capital Airlines, Central Airlines, Chanchangi Airlines, Chrome Air Service, Dasab Airlines, Earth Airlines, EAS Airlines, Easy Link Aviation, First Nation Airways, Freedom Air Services, GAS Air Nigeria, Hamzair, Harco Air Services, Intercontinental Airlines, Kabo Air, Meridian Airlines, Nicon Airways, Nigeria Airways, Okada Air, Pan African Airlines, Sosoliso Airlines, Trans-Air Services, Triax Airlines, UAS Cargo, Virgin Nigeria and Wings Aviation.
However, BusinessDay’s investigations have shown that Aero, Dana and Overland have defied the trend and remained sustainable even after 10 years.
Aero, which is on the verge of collapse, has set the pace for others. Aero has operated for 61 years now with 54 years of profitability before its journey to exiting the skies started seven years ago when the Asset Management Corporation of Nigeria, (AMCON) took over management of the airline.
Before the take-over, Aero had aviation professionals in its management team and had transparent financial records until it allowed external interference to negatively impact its operations.
Dana Air, established in 2008, is the only airline in Nigeria that has survived a crash and has come back to life. With a fleet size of five, the airline’s dedication to flying, its professional aircraft scheduling and prudence in finance has kept it strong and sustainable.
Overland, which was founded in 2002, has a fleet size of seven and since inception has maintained its Turboprop aircraft, which is fuel-efficient and this has since helped the airline cut down of operations costs from fuel consumption. The airline has also maintained its share of the market with its city-to-city and West coast routes.
Olumide Ohunayo, an aviation analyst, told BusinessDay that Dana, Aero and Overland remained profitable for over 10 years because they did not engage in ambitious expansion, as they grew slowly and made the necessary impacts.
He said: “Of the three, only Dana had a major crash; they learnt from their mistakes and since they came back, they have been working continuously to return to full strength. At one stage, they had commonality in aircraft usage.
“Dana specialised with the MDs aircraft. Overland uses Turboprops and this reduced their operational costs. They grew slowly and knew their limits. And they were not ambitious to run international routes which often bring down airlines. I commend them for this. They have remained on their route and built passengers’ patronage.”
For Seyi Adewale, chief executive officer of Mainstream Cargo Limited, Overland Airways has been succeeding because of its choice of aircraft fleet with ATRs, Beech and Embraer.
“These are low cost, good fuel efficient fleets. Secondly, the choice of route is unique to the airline and has been developing and managing these routes over the years rather than competing in ‘crowded and very competitive’ routes. Lastly, the airline has good safety records,” Adewale said.
For him, Dana’s strength and endurance is attributed to the goodwill generated over the years based on very good inflight services and customer service skills.
Dana also operates from a much-diversified group structure that enables them to benefit from shared services and complementary product offerings, he said. “The airline has been able to have very good disaster management capabilities despite the not so laudable safety records,” he added.
Adewale hinted that for 61 years, Aero has sustained its good safety records, good maintenance records, and history of a very competent aviation professional team and this historically generated goodwill that endeared ‘corporate Nigeria’ to them.
He, however, noted that what has bedevilled the airline included poor corporate governance that led to its huge indebtedness and the consequent focus and poor aviation skills of its undertaken financial managers.
Kingsley Ezenwa, communication and marketing manager, Dana Airlines, told BusinessDay that part of the secret of Dana Air is its sound management team with committed staff members.
On the commercial side, Ezenwa said the airline has a very efficient, vibrant scheduling and commercial team and has continued to invest in data analysis. “We don’t just start out on routes for the sake of it. We do proper route analysis and we study what our customers want in terms of timing and fares. There is no haste to increase fares,” he said.
He said the airline had also mastered the art of taking criticisms in its stride but sticking strictly to global best practices and doing the right things across board from customer relationship, to safety, training, staff welfare, among others.
Ibrahim Mshelia, owner of West Link Airlines Nigeria and Mish Aviation Flying School, said all airlines operating in Nigeria, even those that have survived for just three years, should be applauded because of the harsh operating environment.
Mshelia said until those heading Nigeria’s aviation sector do the right thing, airlines would continue to struggle and would come and go.
He noted that one of the killers of airlines is surcharges, adding that airlines need to be dedicated to paying numerous surcharges to survive.
“If you are a professional and know what you are doing, you will survive. Airlines can survive; it is just that they can’t be strong. If they lose any airplane, the impact will be felt. They can’t expand. Airlines cannot make savings because the government is taking away all their income. People keep staying in the business because of their dedication and patriotism,” he said.
Talking about Edward Boyo, chief executive officer of Overland Airways, he said: “I knew Boyo as far back as 1982. He has been flying and decided to join the airline business. He understands the airline business and knows how to do everything and that is why he is surviving.”
According to Mshelia, the owners of Dana are not pilots but renowned business men and the airline allows professionals to run the business and the day-to-day activities of Dana.
Aero also had professionals running the airline. Ibru family had no pilot but had business acumen but when Aero started bringing their family members into the business, the airline started having issues, he said.
He also commended Max Air, which started off as a hajj airline and succeeded before adding scheduled operations to it.