Bristow Helicopters Nigeria Limited, a provider of helicopter services to the global offshore energy industry is beginning to diversify operations from off shore, serving major oil and gas companies to aviation support services, fixed wing operations as result of dwindling airline operations and current slump in oil price.
This diversification is said to be coming at a time when the number of airlines operating in the country have reduced from eight to seven within a period of 8 months and existing airlines have also reduced flight frequencies over depleting number of fleets.
BusinessDay’s checks show that Arik Air and Aero Contractor, the two biggest airlines reduced frequencies to major destinations such Abuja, Port Harcourt, Owerri, Enugu and Kano in a bid to effectively manage the airline under the management of the Asset Management Company of Nigeria, (AMCON). Also, the FirstNation Airways has abandoned its Certificate of Airworthiness as a schedule operation for charter services.
Ayo Stilo, Base Manager, Bristow Helicopters (Nigeria), said the company is diversifying into fixed-wing operations and will provide scheduled services to Lagos, Abuja and Port Harcourt for its customers on a daily basis. “We wanted to provide a service that is different. We don’t have that type of service yet in Nigeria. Most of the time, you have people with private jets which is meant for the high and mighty.”
“We are looking at an area that is not yet saturated in the industry. When you provide this kind of service and make it available to certain people, it is open to people in oil and gas, it will bring people away from the known and join us,” Stilo added.
The company recently put up an advert for Lagos-Abuja flight, Lagos-Port Harcourt flight and Abuja-Port Harcourt flight operations for pooled and ad-hoc charter services across Nigeria. It also disclosed plans to acquire two Embraer aircraft, which has a capacity of 55 passengers for its niche market.
A travel agency operative who craved anonymity told BusinessDay that the company is yet to be registered as a certified airline operator by the International Air Transport Association (IATA) which supports aviation with global standards for airline safety, security, efficiency and sustainability.
However, BusinessDay’s investigations show that for use of ERJ 135 37 seat aircraft for local flight per hourly rate, Bristow charges $7,875 tax inclusive and the international flight is at $9, 450 per flight hour.
This implies that charter flight for local operations will cost N2,850,750 at the rate of N362 to a dollar. This will cost each of the 37 passengers boarding the aircraft a sum of N77,000 for air ticket.
BusinessDay’s checks show that domestic airlines charge N20,000 to N30,000 for flight from Lagos to most domestic destinations within Nigeria.
But Gabriel Olowo, executive director, defunct Bellview Airlines Limited and President of the Aviation Safety Round Table Initiative, (ART), says that there may be more behind the low fares than the need to lure passengers.
“For any airline to charge as low as N20,000 at a time when foreign exchange has skyrocketed and passenger traffic has dropped, only shows desperation for cash flow.
“As far back as 1994, when exchange rate was around N22 to a dollar, Nigerian airlines were selling the Lagos to Abuja or Lagos to Kano trip at N2, 200 which amounted to US$100. Twenty-three years after, with the exchange rate moving from N22 to N450, airlines are
“The weak naira is making it difficult for airlines to charge the right tariff. Airlines are reducing prices when their cost of operation is rising. Nigerian airline are currently not charging the right tariff that will make their business sustainable. But if people cannot fly, then do not kill them,” he explained.
Dong Pam, a pilot and Chairman, Governing Board of the Nigerian Aviation Safety Initiative (NASI) told BusinessDay that it cost Arik Air over $7000 to operate its Boeing 737, 700 per hour. These operating costs include pilot allowance, aviation fuel cost, parking and landing fees, crew allowance, catering services, government charges amongst others. The aircraft has an average of 100 passengers.
“Even at an official exchange rate of N305 to a dollar, an airline will pay an average of N2.14 million for a one-hour trip. If airlines charge a sum of N20,000 per passenger on an aircraft capacity of 100 passengers, the airline will make a sum of N2 million, which is below its operating cost of N2.14 million.
“For an airline business to be sustainable, aviation experts say airlines ought to charge nothing less than N35, 000 to N50, 000 for a one-way flight on domestic routes.
But many domestic airlines fear that if ticket prices rise to that level, passenger traffic will thin out fast,” Pam added.
Gbenga Olowo, President of Aviation Round Table (ART), explained that recently there has been continuous depletion of the fleet of Nigerian airlines and this development cannot encourage investors to invest in a MRO, which is a capital intensive project.
Olowo recalled that in 2010, Nigerian airlines had 54 commercial operating aircraft but by 2014 the fleet had reduced to 39. BusinessDay’s Checks show that Aero contractors which used to have 10 aircrafts in its fleet, currently has only two operational aircrafts, three on maintenance and others have been returned to the leasing company.
Dana currently has three operational aircrafts, while two are abroad for maintenance. First Nation has recently grounded its operations because all its aircraft are abroad for maintenance, Medview has four operational aircraft and one abroad for maintenance.
Arik Air, the biggest domestic airline in Nigeria which had 28 aircraft on its fleet presently has less than nine operational aircraft.
Sources at the Nigerian Civil Aviation Authority (NCAA) said that 25 percent of existing aircraft owned by commercial airlines are on maintenance or AOG (aircraft on ground) either because they are no more airworthy or are due for maintenance.
IFEOMA OKEKE
