Inaccurate data push airlines into unprofitable routes – Air Peace chairman
Inaccurate data has been identified as the one of the reasons some airlines commence operations into unprofitable routes, after which they are not able to sustain the routes.
Allen Onyema, chairman, Air Peace airlines on Thursday disclosed that some of the data given to airlines are not accurate and this can push them into routes that won’t profit them.
Onyema who disclosed that since Air Peace commenced the Niger route, 15 passengers was the highest the airline could airlift and most times the airline would airlift less than 10 passengers on the route. He said this led the airline to shut down the route because it was unprofitable.
He hinted that before the airline commenced Niger route, data made available to it showed that the route was very lucrative and this wasn’t the case.
BusinessDay investigation showed that the airline has also suspended it’s Yola and Benin-Port Harcourt routes.
Speaking during the maiden edition Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) with the theme: ‘Advancing the Frontiers of Possibilities for Safe, Secure and Profitable Air Transport’, in Abuja on Thursday, Onyema said the airline went into Niger route after it collected data showing the route was profitable but the data was inaccurate.
“We need to improve on our data collation in Nigeria. This is one of the challenges airlines face in Nigeria,” Onyema added.
The Air Peace chairman also said funding has continued to affect airlines’ operations in Nigeria and is the reason why airlines do not deploy the right aircraft to routes because they do not have the fund to acquire the right aircraft.
According to him, when airlines deploy wrong equipment to routes, in a matter of time, the airline will stop operating the route because the cost of operating such equipment may exceed the amount the airline is generating from passengers on the flight.
“When an airline deploys a Boeing 737 to an unprofitable route, in a matter of time, the airline will stop the route. Nigerian airlines are trying to connect flights across the country, the opportunities are there but the incentives are lacking
“Airlines are given over 20 percent interest rate on loans collected in Nigeria whereas in other countries their airlines get loans with as low as two percent interest rate. Lack of funding has become a bane for airlines to expand routes in Nigeria,” Onyema said.
He disclosed that when Air Peace started the Port Harcourt-Kano route, there was low passenger traffic on this route but the airline had to pay the price by being persistent and purchasing the right aircraft for the route.
He said today, the Port Harcourt-Kano route is performing very well.
He noted that other challenges faced by airlines include competition from modern road transport companies, lack of government support, sunset airports and unhealthy competition among airlines.
Speaking during a panel session, Rabiu Yadudu, the managing director of FAAN said the issue of sunset airport is something the authority is looking into but insisted that FAAN cannot deploy manpower and facilities into an airport with very low passenger traffic.
“It will take a lot of time and resources to make an airport that has less than 1,000 passengers per annum work. If an airport is not viable, it is not viable. FAAN is here to do business. If we spend N300 million a month for an airport that generates less than N10 million a month, it shows the airport is not viable. We need to ensure these airports are profitable and can contribute to the nation’s economy,” Yadudu said.