BusinessDay

Nigerian airlines to miss out as Emirates cuts flights

...Airlines yet to access trapped funds from CBN

Domestic airlines in Nigeria are not able to fill the gap created by the reduction of flights into the country by Emirates Airlines, the United Arab Emirates’ biggest flag carrier, BusinessDay findings show.

Currently, the only Nigerian carrier that operates into Dubai is Air Peace with three weekly flights, as against 14 daily frequencies operated by Emirates to Dubai.

A circular to travel agents by Emirates on Sunday which was made available to BusinessDay, said: “Operations to Nigeria will be reinstated with 4-weekly Lagos (LOS) flights effective 11 September 2022. Lagos flights beyond 30th September will be advised in due course.”

Susan Akporiaye, president of the National Association of Nigeria Travel Agencies, who confirmed this to BusinessDay, said the message was sent to travel agents and they were still waiting for directives from Emirates on a go-ahead to commence ticket sales.

This comes after the Central Bank of Nigeria (CBN) announced that it had released the sum of $265 million to airlines operating in the country, to settle outstanding ticket sales in a bid to avert a brewing crisis in the country’s aviation sector.

The Emirates had on August 18 announced that it would suspend all its flights from September 1, 2022 but the airline reviewed this decision following the announcement from CBN.

Emirates had the largest frequencies with 14 weekly flights into Lagos before it started reducing frequencies. If the airline reduces frequencies into Lagos to four, it means 10 weekly flights will be needed to bridge the gap Emirates would create.

Emirates carries an average of 350 passengers per flight. For 14 flights from Dubai to Lagos, the airline carries 4,900 passengers. To operate a return flight, the airline would carry an average of 9,800 passengers weekly on the Dubai-Lagos route.

With the reduction of flight frequency to four, it means the airline would now carry an average of 2,800 passengers weekly on the same route.

The remaining underserved 7,000 passengers would have to jostle for flights on other carriers.

Experts say no other airline aside from Air Peace operates the route. Passengers would be left to jostle for flights on Ethiopian Airlines, Egypt Air, Etihad Rwanda and Air Peace, which fly directly to Dubai or connect passengers to Dubai.

Bilateral Air Service Agreement (BASA), founded on the principle of reciprocity, is a deal that enables a country’s airlines to enjoy equal leverage, in terms of flight operations, in countries with which their home country has an air agreement.

But Nigeria has continued to miss out on this huge potential revenue because it does not have a national carrier.

The Single African Air Transport Market, which is part of the BASA agreements, is a flagship project of AU Agenda 2063, which aspires to create a single unified air transport market in Africa, liberalise civil aviation in Africa, and motivate the continent’s economic integration agenda.

Read also: Five highest-paying airlines in the world for pilots

The agreement has seen more foreign airlines such as Sudanese Airlines, Ethiopian Airlines, RwandAir, Emirates and Qatar Airways open more routes and increase frequencies in Nigeria, while Nigeria airlines suspend operations into foreign countries.

Nigeria currently has over 10 foreign airlines operating in the country and most operate into Lagos, Abuja, Port Harcourt and Kano, while only one Nigerian carrier, Air Peace, currently flies into or from West African countries, UAE and South Africa.

John Ojikutu, an industry expert and secretary-general of Aviation Round Table, said that while Nigerian airlines lack capacity to operate into other countries, the removal of multiple destinations given to the foreign airlines and limiting them to either Lagos or Abuja and one other airport in the alternative geographical area to their choice in Abuja or Lagos would boost revenues of local carriers.

He said: “Let foreign airlines make as many frequencies as they wish to the given destinations but they must make interlining arrangements with the domestic airlines to help distribute incoming international passengers to their final destination and connect outbound international passengers to the nearest international airport but payments must be done for the interlining connection in dollars.

“This way, you remove the foreign airlines out of our domestic routes and domestic markets of the domestic airlines.”

He also suggested that a domiciliary aviation commercial account be opened with the CBN where money generated by the operators in aviation and maritime are kept and the naira equivalent given to the depositors.

These dollars, he said, can be taken back when needed and the naira returned as the domiciliary account can be a succour for the repatriation of the foreign airlines money.

“From 14 flights weekly to four; imagine the loss in revenues to the service providers, the Federal Airports Authority of Nigeria, Nigerian Airspace Management Agency, Nigerian Aviation Handling Company Plc, Skyway Aviation Handling Company Plc, fuel marketers and even the NCAA,” Ojikutu said.

Sindy Foster, principal managing partner at Avaero Capital Partners, who also expressed concerns that Nigerian airlines would be losing out on the opportunities that Emirates’ flight reduction presents, said reduced frequencies on the direct Lagos-Dubai route would significantly impact passengers even if Emirates uses alternative aircraft that can carry more passengers.

“It’s not yet clear whether Air Peace will be able to add more frequencies to its own route. If they can, this would be a great opportunity. The alternative for passengers will be non-direct flights via third-party countries. Several airlines offer this option currently. These trips will probably attract more customers and have increased load factors,” Foster said.

Kingsley Nwokeoma, president of Association of Foreign Airlines and Representatives in Nigeria, told BusinessDay that the funds promised by CBN was an announcement, saying there was paperwork to be done and they would look at the various airlines and know how to disburse the funds.

According to him, what will be released by the CBN is not up to half of what is being owed. “If the CBN has started this way back, we will not be where we are today. We need to try to avoid these circumstances that the airlines have found themselves in.”

Get real time updates directly on you device, subscribe now.