Two months after domestic flight operations resumed in Nigeria, airlines are recording about 60 percent load factor, BusinessDay’s findings show.
A visit to the Terminal Two of the Murtala Muhammed Airport in Lagos on Tuesday showed a reasonable number of passengers being processed for flights to Abuja, Port Harcourt, Owerri, and other frequently visited destinations across the country.
In March, the Federal Government shut down airports across the country to contain the spread of COVID-19. Five months after, in July, Abuja and Lagos airports were opened for domestic flight operations while other airports were opened subsequently.
BusinessDay’s checks show that when flights resumed, airlines were recording as low as 20 to 30 percent load factor, but barely 11 days after international flights resumed operations, domestic airlines are seeing a 55-60 percent load factor.
Ado Sanusi, managing director, Aero Contractors, told BusinessDay that when Aero resumed operations he anticipated passenger turnout will be gradual and it was like that.
Sanusi said passenger confidence has grown in the past two months and load factor has increased from 20 to 30 percent to about 50 to 60 percent, adding that the resumption of international flights has had some impact on domestic operations.
“We have had to scale down operations. Before COVID-19, we had three 737 and one Dash 8 aircraft which we used to service our routes. After COVID-19, we now use three aircraft instead of four. We have also had to reduce frequencies into Abuja, Port Harcourt, and Yola. For instance, we operated into Yola daily before COVID-19 but now we have reduced to five weekly flights,” he said.
Sanusi said the challenge has however been accessing to foreign exchange.
“We are struggling to ensure we buy spare parts and do our maintenance. Aviation is purely dollar-denominated when it comes to cost. We sell our tickets in naira but do our maintenance and buy spare parts in dollars,” he said.
A source at Dana Air who craved anonymity told BusinessDay that on certain days like Fridays, Mondays, and Sundays, the load factor could be up to 65 to 70 percent but some other days, the load factor could be between 50 to 60 percent.
The source also associated the increase in load factor to international flight resumption.
BusinessDay’s checks show that Air Peace, which operated over 120 flights daily before COVID-19, scaled down to about 20 when flights resumed but after some weeks, the airline now operates about 45 to 55 flights daily.
As airlines struggle to survive Post COVID-19, experts have however suggested some recovery models that could keep local carriers afloat.
Seyi Adewale, the chief executive officer of Mainstream Cargo Limited suggested that government stimulus led packages and incentives must be given to limit the negative impact of the pandemic on the aviation sector.
These Adewale said include loans, grants, tax waivers, special forex windows and rates, airport infrastructure deliberate upgrades or construction, and reduction of airport taxes or surcharges.
He stated that locally and in Nigeria, the government can consider expanding the definition of aircraft spare parts to include other important aircraft items such as brake ASSY, safety appliances, rafts, aircraft tires in order to enjoy zero percent duty waivers.
Olumide Ohunayo, an aviation analyst, hinted that the Russians, USA, Canada, Britain, and some other countries have come up with one measure of support or another for the airlines, adding that Nigeria should look at options of supporting the aviation industry to help kick start the economy after the coronavirus crisis.
“There are so many options before the government in helping support airlines. It is either they give direct financial incentives to the aviation industry or they give loans to organisations to get back up again.
“Another option could be approving corporate bonds through the Central Bank of Nigeria, (CBN), tax waivers could also help and waiving some charges to ensure airlines get back on their feet. What we have before us is not a matter of liquidation but insolvency and disappearance of organisations. These options are what we should take to save the airlines,” Ohunayo added.
