• Sunday, December 03, 2023
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Nigeria has most airlines in Africa but survival is low

FNAC 2023 targets sustainability, investments for aviation sector

Nigeria has the most airlines in Africa, but it also has the highest failure rate when it comes to survival and longevity of those airlines. With about nine commercial airlines and 25 prospective airlines in the process of getting their Air Operating Certificate (AOC), airlines in Nigeria would increase even further; yet, the average lifespan is 10 years.

While a higher number of airlines would ideally create more competition and build a vibrant industry, experts say this may not necessarily mean the airlines are at par with contemporaries in other African countries.

For instance, Ethiopia currently has about four domestic airlines with Ethiopian Airlines as its major carrier, flying the skies for 75 years. Ghana currently has three airlines; Africa World Airlines, Passion Air and Gian Air. Awa Airline, its major carrier, has operated for 10 years, Passion Air – four years and Gian Air – 11 years.

Morocco runs a major carrier called Royal Air Maroc, which has been operating for about 64 years. Kenya operates one major airline, Kenyan Airways and has run successfully for 44 years. The country also has few other airlines, which also operate within the country. Egypt has Egypt Air as its national carrier and has operated for 89 years.

In Nigeria, however, investigations show that in the last 25 years, over 30 airlines have closed shop.

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“We fought a daily battle against government agents who wanted to daily make fortune from us, politicians who saw the government 49 percent as a meal to seek for all kinds of favour,” said Richard Branson, chairman of Virgin Atlantic, which attempted to crack the Nigerian market in the 2000s. Watchdogs (regulatory bodies) that did not know the responsibilities required of them, were persistently asking for bribes, he said.

Some of the defunct airlines in Nigeria 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, and Chrome Air Service. Others are 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, Skypower Express Airways, Sosoliso Airlines, Trans-Air Services, Triax Airlines, UAS Cargo, Virgin Nigeria and Wings Aviation.

While it can be argued that many other African countries run national carriers that are financially supported by their governments, Nigeria also had national carriers that were supported by the government yet had a short life span.

Various attempts by past governments to set up national carriers failed over power play, politicking, lack of management and unhealthy competition, among others.

A recent data released by African Airlines Association (AFRAA) on African airlines ranking by traffic showed Nigeria lagging other countries on the continent.

Ethiopian Airlines of Ethiopia, Egypt Air of Egypt, Royal Air Moroc of Morocco, Safair of South Africa, Kenya Airways of Kenya, Air Algeria of Algeria, Air Arabia Moroc of Morocco, Tunisair of Tunisia, Mongo Airlines of South Africa and Comair of South Africa topped the list for airlines with the highest passenger traffic for domestic, intra-Africa and intercontinental flights.

However, as more airlines spring up and aim to compete locally and internationally, there are mistakes made by their predecessors that can be avoided.

Daniel Young, an aviation analyst, says there is a growing sense of entitlement among airlines that needs to be curbed; because it forms the basis for their continued epileptic financial performance.

Young says local carriers see the Federal Government as the first and only resort when in need of cash.

Alexander Nwuba, managing director, Smile Air Ghana and former MD, Associated Airlines and WestAir Benin, notes that airlines that failed might not have, if they kept correct books subjected to scrutiny.

“When you fabricate books and raise money you’ll also fabricate the business. Financial transparency is key to business success,” Nwuba states.

John Ojikutu, aviation security consultant and secretary general of the Aviation Safety Round Table Initiative (ASRTI), says with the types of aircraft that new airlines are buying, they need to review their business plans, and otherwise, they would fail like their predecessors.

Ojikutu explains that the load factors of the small aircraft are lower, so they may not break even if they charge the same rates with airlines having bigger aircraft.

Also, passengers are not available as they were before COVID-19; so the option would be for the domestic airlines to look inward for domestic cargo operations with aircraft that can lift about 20 tons per flight, he states.

“Rather than buying or having only passenger aircraft, they could look for cargo aircraft for domestic cargo operations. Otherwise, it would take two to three years before we get to pre-COVID passenger figures and before then the new aircraft would get to the level of periodic maintenance; where would the cost come from? What I can see happening is another short lifespan,” he says.

For Seyi Adewale, CEO, Mainstream Cargo Limited, airlines need to review their viability plans and make adjustments where necessary in view of current and changing realities for instance FX projections.

Adewale advises airlines to start signing agreements with state governments, large corporations and Ministries, Departments, and Agencies (MDAs) with large projects to move assets and personnel.

They generate substantial cash flow by selling tickets many months ahead, ensuring a large pool of good agents across the country, and giving them incentives and partner international or regional airlines for interline arrangements, he advises further.