How Air Peace’s operations spur growth in Nigeria’s aviation industry
In recent years, it has become difficult to discuss achievements in Nigeria’s aviation sector without making reference to Air Peace, the largest carrier that has been changing the narrative of air travel in the country.
As passenger traffic continues to increase as a result of insecurity on the roads and the need to get to destinations within the country in time, Air Peace has helped bridge the gap in providing the much-needed aircraft for movement of people from one destination to another.
In the first quarter of 2019, the Federal Airports Authority of Nigeria (FAAN) recorded a total of 3.5 million passengers who passed through Nigerian airports. The agency also recorded 54,000 aircraft landings.
The number of passengers is almost 100,000 more than the figure recorded same period last year. For 2018 first quarter, traffic was 2.6 million – an indication that Nigeria’s traffic figure had seen an upsurge over the last year and is projected to continue growing as more people increasingly prefer air travel.
Even though passenger traffic is increasing, the aviation industry is faced with depletion in fleets. Perhaps coming to the rescue, Air Peace has continued to seal deals with major aircraft manufacturers in providing aircraft that will match the increasing air traffic demand in Nigeria.
Industry stakeholders, though, marvelled at the unparalleled investment in capacity, they are optimistic that the 14 million passenger record may as well double in a year when at least half of Air Peace’s new orders join the current operating fleet.
Indeed, the airline led the way with an unprecedented investment in aircraft in its bid to make a strong case for Nigerian flag carriers on regional and international skies, even as no city is left behind on the home front.
Air Peace’s huge investments in aircraft
Air Peace recently signed a contract for three additional Embraer E195-E2s, confirming purchase rights from the original contract signed in April this year.
With the new signing at the Dubai Airshow, Air Peace has made total firm order of 13 E195-E2s with 17 purchase rights for the same model, which delivery would begin in May next year.
These new E195-E2s will be included in Embraer’s 2019 fourth-quarter backlog and have a value of $212.6 million, based on Embraer’s current list prices.
The April signing made Air Peace the first launch customer of the new brand of E-jets in Africa and launch customer of the brand of business class configuration for its ordered airplanes worldwide.
The E195-E2s ordered by Air Peace will have dual configurations with 12-seater business class and 102-seater in the economy class. The aircraft also comes in single configuration of all economy class of 144 seats.
This development was sequel to the airline placing a firm order for 10 brand new Embraer 195-E2 aircraft. The order comprises purchase rights for another 20 E195-E2 jets, as well as 124-seater jet in dual class and 146-seater jet in single class configurations, respectively. With all purchase rights exercised, the contract is valued at N640.5 billion ($2.12 billion) based on current list prices.
The carrier also set a regional record in September 2018 when it ordered 10 brand new aircraft from Boeing, increasing its fleet size then to about 37 aircraft. With the new order, Air Peace’s fleet size has increased to 67 aircraft.
Air Peace had earlier set a domestic record as the first Nigerian airline to acquire and register the Boeing 777 aircraft in the country. Three of the four wide-body aircraft it acquired for its long-haul operations to Dubai, Sharjah, Johannesburg, London, Houston, Guangzhou and Mumbai have so far been delivered.
Air Peace has remained the highest employer of labour in Nigeria’s aviation sector. BusinessDay’s findings show that Air Peace alone employs over 3,000 direct workers and provides over 9,000 ancillary jobs, a feat several foreign airlines operating in the country have been unable to achieve.
Air Peace is energising the economy of the country and acting as a catalyst with its operations of about 110 flights daily, moving Nigerians around in the economy, no doubt, the airline should be supported.
The airline has continued to create at least 500 direct and indirect jobs for each aircraft it purchases.
The gradual expansion of its fleet with the arrival of new aircraft will also expand the workforce to about 10,000 direct staffers and more than 50,000 in the auxiliary category.
Allen Onyema, chairman of Air Peace, had made it clear from inception that the reason he started Air Peace was to create employment opportunities for Nigerians and help in national development.
“I know that all the violence and security challenges we are facing will reduce if our youths are positively engaged. I enjoin all Nigerians with means to invest in the country and help to create jobs to complement the efforts of the government,” Onyema said.
Ease in air travel
Air Peace which plies more destinations within Nigeria than any other airline in Nigeria, no doubt, is making travel experience seamless for travellers.
Air Peace recently promised to commence flights into Ibadan from Kano, Owerri and Abuja. This is part of the airline’s no-city-left-behind initiative and its plan to interconnect various cities of Nigeria, giving its esteemed customers more seamless connections. It will be recalled that just last month, the airline announced the commencement of Kano-Owerri-Kano flights.
The airline has continued to receive honour for its historic evacuation of 503 Nigerians from South Africa during the xenophobic onslaught.
In the face of all these achievements and strides the airline has recorded in the aviation sector in just five years of its operations, it is only desirable that the Federal Government support the airline and other domestic carriers with policies that will help sustain them.
Beefing up on aeropolitics
Onyema had urged the government to get more involved in playing aeropolitics to sustain indigenous carriers on designated international routes.
When the airline started flying the Dubai route, Onyema said it needed the government’s support to succeed.
“We cannot do it alone. We can only do our best but the rest lies with the government. The government must stop unfair competition in this sector. The United States government did it when the Gulf carriers swooped on them, so the policy of multiple designations and frequencies for foreign carriers is detrimental to our economy. Our airlines will not grow under this policy,” he said.
“The government must help us grow the sector and not stifle it, but I know the president is a nationalist who is ready to support our carriers. Aviation is a very tough business. I plead with Nigerians and the government to support Air Peace. We promise to give Nigerians modern equipment and unparalleled services,” he said.
Onyema said without government’s support local airlines would lose out on aeropolitics. He said this was why many Nigerian carriers have been unable to sustain their operations on the route.
Experts’ opinions on FG’s support for local airlines
Nogie Meggison, chairman, Airline Operators of Nigeria (AON), said some of the major issues that need to be addressed to grow the industry include removal of Value Added Tax as domestic airlines were the only mode of transport still paying it. Also, review of the 5 percent Ticket Sales Charge to a flat rate in line with the global best practices as well as harmonisation of over 35 multiple charges which add huge burdens on airlines, among others.
“A clear economic policy for the survival of domestic airlines is very critical at this time which has resulted over the years in the death of over 25 airlines in 30 years. Investors are in the business of aviation for the profit and can’t make a profit without safety or have a safe airline without profit,” Meggison said.
“These are some of the main reasons for the short lifespan of Nigerian airlines averaging about eight years. With the growth in demand for domestic air travel, Nigeria can become the hub for Africa and easily make aviation the fourth contributor to the economy and a major contributor to the Gross Domestic Product as well as create 200,000 new jobs for our ailing youths through its direct and indirect link,” he said.
John Ojikutu, aviation security consultant and secretary-general, Aviation Safety Round Table Initiative (ASRTI), told BusinessDay that foreign airlines should not be given multiple destinations and landings.
“Ethiopian airline’s multiple landing should be reduced to only two, Lagos or Abuja and any other. British Airways and Virgin Atlantic should decide which out of Abuja or Lagos to fly into but none of the two should fly to Lagos and Abuja as British Airways is presently doing. The idea is to create markets for domestic airline,” he said.