From
all indications, there are evidences that unless all the airlines in the
country merge into one strong mega airline within the next seven years, the
remaining local carriers operating domestic and regional routes may find it
extremely difficult to operate further, due to stiff competition that will
arise from the open skies initiatives currently gaining ground on the African
continent. Open Skies for Africa was cemented at the Yamoussoukro Declaration
of 1988, in which many countries in Africa agreed to comply with the principles
of air services liberalization. With the deregulation of air services and
promotion of regional air markets, making it open to transnational competition,
it is expected that most airlines, especially, the weak ones, would finally
collapse completely, going by these developments. Although the implementation
of Yamoussouko Declaration has fallen short over the years, but aviation
experts have warned that once it comes into force, weak airlines have to give
way for the stronger ones within the region. The declaration is expected to
take full force within the next five to seven years. Apart from liberalization
of African airspace, it was gathered that most local airlines in the country
are not getting it right; and may not compete favourably with other airlines
that are more equipped for regular flight operations. For example,
investigations have also shown that less than 20 out of the 47 registered
airlines have good insurance policy, thereby further creating a big bottlenecks
on their operational efficiency and contributions to the economy. Further
investigations indicate that airlines in Nigeria are not doing well because,
they have poor business plans, bad aircraft holding, operation of multiple
aircraft types, poor maintenance philosophy, bad crew and aircraft management
system. “Why can’t four airlines merge and share their responsibilities. In the
next five years, say maximum of seven years, if Nigerian domestic airlines do
not merge, all of them are going to go under because they will not be able to
compete due to open skies. That calls for merger and strong fronts”. “Nigerian
airlines are not making it because, they have poor business plans; Apart from
Air Peace, their aircraft holding cannot sustain their flight schedules.
Another challenge they have is the operation of different aircraft types, which
calls for extra expenses since they will now require huge funds to maintain
them. The longest flight in Nigeria is perhaps, Lagos- Maiduguri route, which
is about two and half hours; A 737 is good for such regional operation, but you
find some of the airlines going for bigger aircraft to move from point A to B”,
the industry source added. In addition, it was also gathered that most
airline’s Chief Executive Officers have poor corporate governance in running
their airlines, a factor, it was gathered, further endangers smooth operations.
“Some of the chief executives are not sincere to themselves. They exhibit poor
corporate governance, as they pay foreign pilots differently and indigenous
pilots differently. They are involved in what I call corporate fraud; and some
of them cart away about 20 per cent of each money their airlines make in a
month,” the source hinted. On the way forward for the domestic airlines, the
source pointed out that streamlining of aircraft holding and proposing a
realistic business plan to be vetted by Nigerian Civil Aviation Authority
(NCAA) experts, would be a way out of the operational crises. The source stated
further that, “To maintain their aircraft efficiently, these airlines have to
merge so as to increase their aircraft holdings. They must also run their
operations with at least seven aircraft. 25 per cent of the aircraft should be
reserved. The practice is that if you have 20 airplane, four should be on
reserve, while the other 16 should be scheduled so as to get backup when
anything happens. In aviation forums, we were told that any good management
system must have 15 per cent aircraft holding visibility and 20 per cent
reserve”. On the much debated five per cent Ticket Sales Charges, the source
hinted that airlines are not supposed to belabor themselves with the issue,
emphasizing that the proceeds are from passengers and not the airlines. “They
should stop complaining of five per cent TSC. They should lay emphasis on Value
Added Tax (VAT) instead of five per cent TSC. It is five per cent, VAT Airlines
should tell government to remove from them because government has removed five
per cent from other means of transportation. That is something they should
fight for. The five per cent VAT should be removed from TSC. Then if TSC costs
N20, 000; 10 per cent of that N20, 000 goes to VAT and NCAA. So if they remove
five per cent VAT, that is the money they are saving already and it will reduce
the cost of tickets”, the impeccable source noted. Meanwhile, the Chief
Executive Officer, CEO, Sabre Travel Network, West Africa, Mr. Gbenga Olowo had
continuously advocated for a bigger or a mega airline that would emerge as a
flag carrier and not necessarily a national carrier. According to Olowo, there
was no reason Nigeria cannot call the airlines together and find a ways and
means to make them strong. “If I have my way, I will merge all of them into one
without killing their individual identity. The total aircraft for Nigerian
airlines today is less than thirty. South African airways has 53 aircraft,
Ethiopian airline has close to 100. We can bring our airlines together and do a
very robust schedule for all their airlines put together,” Olowo said. For
Comrade Abdulrasaq Saidu, Secretary General, Nigerian Aviation Professionals
Association (NAPA), airline’s merger would be the only solution for the
survival of the domestic airlines in the country. According to Saidu, poor
management of airline by owners as a result of nonchalant attitude remained
their greatest challenge; coupled with the inability of the regulating body-
the Nigerian Civil Aviation Authority- to play its role as a regulatory agency,
further compounded the situation. He said,”If you go to NCAA, you will see the
number of airlines registered without operating. Where are they are using their
AOCs, NCAA must wake up from slumber and do the needful. NCAA registered
airlines, but it does not monitor them effectively.” He said that for airlines
to break even, that they must become a national carrier, while funds from the
Bilateral Air Service Agreement should be injected into the system.
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