Stabilizing the sub-regional market for players to thrive

FOR Nigerian airlines to thrive in the West African sub-region, a number of factors have been identified that need to be taken out of the equation so they can have a fighting chance in the region especially now that the entire continent is gradually and progressively looking at embracing the Single African Air Transportation Market (SAATM) a concept resurrected from the ashes of the Yamoussoukro Declaration of 1986.

Already, the continent and particularly the West Africa sub region have already started letting it’s wrong bi-lingual politics give free rein to foreign airlines to dominate it while connectivity remains a challenge for African airlines themselves.

In the latest list of backward practices among African countries is the negative aero-politics, the arbitrary high charges to take out perceived competition, as well as other hindrances with regards to connectivity from one country in the sub-region to another and equipment type deployed on these routes have been identified as critical reasons carriers in the sub region- particularly Nigeria Airlines have found it difficult to play well on the West Coast despite majorly developing those routes.

International Airport Professional and an Air Transport Specialist, Mr. Richard Aisuebeogun who spoke to NigerianFLIGHTDECK on some challenges in the region that have over the last three decades militated against Nigerian carriers said going beyond new equipment which indeed is a great stimulus for increase traffic, if the challenges were not tackled Nigerian airlines will still face similar challenges in the next decade.

From historical perspective

 

According to Aisuebeogun, Nigerian airlines had dominated the sub region in the past three decades with airlines like Okada Air, ADC Airlines, Bellview controlling over 70% of that market but that dominance started waning when external factors like protectionism especially from the francophone took root and then internal factors as poor management, lack of understanding the yield and revenues management , aging aircraft with frequent snags and incidents and sadly accidents took over.

He however pointed out that protectionism through arbitrary high charges coupled with the fact that as of that time appropriate fares weren’t charge, so sustainable operations becomes very challenging and that led to a gradual withdrawal of Nigerian airlines that operated to the West coast.

This was made more complicated when the countries in the sub-region opened up their air spaces to foreign carriers for fifth and even sixth freedom rights to foreign airlines cementing multiple designation in a region that was not fully liberalized and this affected the profitability of these airlines.

Even when Nigerian airlines bounced back in the early 2000s through Arik Air which operated a next gen aircraft the B737-700/800 to the west coast, the francophone African countries started imposing high charges as a means to strangulating airlines from anglophone African countries in the sub-region, these charges became unbearable and so airlines gradually started withdrawing from destination like Conakry, Abidjan, Lome etc and only endured Dakar.

“Arik Air introduced modern aircraft,next generation aircraft Boeing 737-700/800 but with a higher capacity which implies that the aircraft weight would determine the charges because they were operating aircraft that though much more modern when compared to the DC9-32 F28, B737-200 or even the B727 which were much older aircraft and still attracts so much charges in the west coast.

“So if i operate a B737-700 and you are operating a CRJ-200/900 or even Emb145, obviously i would pay higher charges compared to what you that operate a CRJ or Emb 145 would pay.

According to Aisuebeogun,another factor that held Nigerian carriers back on the regional route is the use of inappropriate aircraft to service the routes stressing that most operators wanted to buy mid-sized aircraft for a route that could be sustained with a regional turbo-prop.

“Even when you tanker Jet A1 fuel out of Lagos, the cost is extremely higher in Freetown, in Conakry, in Monrovia, in Bamako, in Abidjan, in Dakar or even in Banjul. At a point it was double the cost of fuel in Nigeria”, he explained.

Resolution

 According to Aisuebeogun, the West Coast with its over 390 million population is a large economic market that has attracted many, and even airlines from other regions too have dived head first and are accessing that market he however said the same cannot be said of the carriers within the region as there is lack of uniformity, purpose or agreement because of various ethno-political differences.

He stressed that without solving some of the challenges experienced by their predecessors in the 90s and early 2000s there will be no headway as the same conditions that are the push factors then have not changed and could still determine the survivability

He stressed ,”You can buy all the brand new airplanes but without solving some of these challenges you will experience what your predecessors went through.

The prevailing conditions that happened in the 90s and 2000s haven’t changed, they are still there, so what is the guaranty that in the next ten years you’d still be in the market. so until those changes are made through legislation of the ECOWAS heads of states or ministers in charge of air transportation in the region, we may have these problems.

He said that the Yamoussoukro Accord, the Banjul Accord and the Cape town Convention, these are tenets or protocols on which the African Union is riding it’s present proposition of Single African Air Transport Market (SAATM) and they must be respected as they, in the long run to promote inter-regional transport that is going to be seamless and that will promote economic growth of the region.

According to him, For Nigerian airlines to thrive in the sub-regional air transport mucky waters, they need to make empirical and analytical business plan and a strong presentation to the Economic Community of West African States (ECOWAS)Secretariat on the viability of air transport in the West Africa market and on the need for the West African heads of states to support, by legislation air transport within the 15 or16 countries in the west African sub-region.

He said, “Until the Heads of State of West Africa, the Minister of Air Transportation in West Africa legislate that priority must be given to West African airlines in the Sub region, in terms of all their operations, then the airlines will grow and dominate. In fact, there is nothing that says you cannot have multiple domination of Airlines in the region like we have in the European Union sir transport market.

“I want to say at this point the west African region as a whole is a large market for Africa and that is why an airline like Ethiopian set up a subsidiary called, ASKY and operate in the region on a 5th Freedom Right. So you can see ASKY coming into Lagos, going to Accra, Lome which is actually the Hub for Asky but sadly that is what we are losing. However, the truth is this, I am not a proponent against the operation of ASKY because that is what the SAATM is all about, however, you have to allow for free market enterprise in the operations, the same regulations and rules that apply to ASKY should also be applied to other carriers in the region.

He equally said alliances or code shares and even interline can also be a way to strengthen carriers in the region giving very key examples.

Aiseubeogun said,”Air I’voire is operating A319, Air Senegal is operating A330-200/300, they may not be coming to Nigeria but they are operating on the West Coast and point beyond. So for example you can’t imagine the potential results of a synergy, code share or interlining between Air Peace and Air Senegal; Air Peace and Air I’voire, its going to be a boom for the entire West African market and the airlines would be better for it.

“Air Peace may not have to fly all the way to Dakar, they can decide that okay, we would do the anglophone countries, you do the francophone countries and we meet at a point and transfer passengers and share revenue, that will also enhance longevity and sustainability of the operations of the airlines because your time or cycle due maintenance will be reduced, you’d have a longer time period of operations for your engine cycles because you are not doing multiple landings which make per cycle, also you will have a longer reserve, unfortunately you can’t say because you want to save engine cycle you do Lagos- Banjul direct with low passenger traffic, you wont have the market, so you’d have to do multiple stops on the West Coast to have your good load factors.

By and large, the potential for air travel in the sub region is growing and can be increased with increasing economic power of it’s citizens