Of Nigerian Airlines and International Destination Challenges

Nigerian airlines have over the years, faced with daunting challenges in their efforts to successfully operate international destinations in a market dominated by global carriers, writes Chinedu Eze

On Monday, there was a virile report about how Saudi Arabia cancelled the visa of all the 264 passengers airlifted by Nigeria’s major carrier, Air Peace, on arrival in Jeddah from Kano and insisted that the airline should return them back to Nigeria. It later allowed 87 passengers to remain and insisted 177 should follow the Air Peace flight back to Nigeria.

Days after the incident, Saudi Arabia authorities did not categorically state why those visas were cancelled, a development that compelled people to embark on guess work and speculations as to why the Arab nation cancelled the visas.

What became very worrisome was the fact that during passenger processing, all the passengers who checked into the flight went through Advanced Passengers Prescreening System (APPS), which were also monitored by the Saudi Arabia authorities before the flight left Nigeria. What this means is that the Saudi authorities knew the passengers were coming to their country and the type of visa that they had.

Some industry observers postulated that what happened was a strategy to discourage the airline from operating to the destination because since it started the operation it has been recording high load factor.

The consequence of the action by Saudi Arabia was that passengers literally deserted the Nigerian carrier because of the uncertainty that could surround the visa status of those who travelled with the airline.

In fact, the flight scheduled for the following day (Tuesday), out of 290 passengers that booked the flight, 200 cancelled their ticket and only 90 flew to Jeddah with Air Peace. Those who would travel with the Saudi Arabia national carrier, Saudia would obviously not have visa issues.

Travel expert, Ambassador Ikechi Uko, said what happened was not aviation problem, but national identity problem, which needs to be resolved urgently. He remarked that Saudi Arabia might not react the same way if they were dealing with another country. So, it is a national issue.

“We have national identity problem that needs to be addressed urgently,” he said.

Nigerian Carriers Not Protected

Industry observers said there had been a long history of Nigerian airlines being made victims of aeropolitics, whereby other countries use diplomatic strategies, high charges and stringent policies to drive away Nigerian airlines from their routes in order to protect their own airlines. This anti-competitive strategy successfully works against Nigerian carriers because, according to industry observers, Nigerian authorities do not fight back, except on few occasions and many Nigerian airlines, including the national carrier, the defunct Nigeria Airways, had suffered from the anti-competitive strategy.

The Managing Director of Flight and Logistics Solutions Limited, Amos Akpan, recalled similar incidents against Nigeria airlines and said that United Arab Emirates (UAE) refused issuing visas to Nigerians and it caused Air Peace to shut down its flights on the route. South Africa delays/limits issuance of visas to Nigerians and this caused Air Peace to shut down flights on the route, but now reviewed to operate sparse frequencies.

“United Kingdom gives excuses that slots are not available for Air Peace at Heathrow airport. Air Peace will choose Gatwick or wait for UK aviation authorities to sort out slots availability at Heathrow,” he said.

According to him, “Reciprocity does not fit in this scenario. The reason is because Saudis, South Africans, British, Emiratis do not fly in and out of Nigeria in numbers that would sustain one Boeing-777 payload on a once a week flight operation in and out of Nigeria. But Nigerians would fill a B-777 daily on these routes 365 days per year. The same analogy is applicable to cargo as payload though not in same quantity/frequencies.

“We import a lot from these countries and we export almost zero to them. This analysis explains the dilemma of Nigerian government officials when it comes to application of the principle of reciprocity. It’s the Nigerian travelers that get limited when the airlines from these countries are restricted from flying this route. It’s the Nigerian travelers that pay highest fares when fewer international airlines ply our routes causing excess demand for few supplies of seats because when demand is higher than supply the price increases.”

Akpan advised on the solution and said that government should partner with airlines they chose to designate to a foreign country.

“For example, support Air Peace until they get the Saudi route stabilized. Go through the diplomatic manoeuver with Air Peace. Find out the financial guarantees required by Air Peace to sustain their operations on the route. Ensure strict oversight on safety, corporate governance, and customer satisfaction. Deliberately dedicate three years of support to help Air Peace development strategies to serve Nigerians on the route. When our airline is messed up or if it fumbles in international arena, it’s Nigeria’s image and brand that is ridiculed. This revocation of visas by Saudi government ridicules Nigeria not Air Peace.

“Government must simultaneously invest in infrastructures that would make one hub airport in Nigeria. One airport in Nigeria must have transit facilities and flight frequencies that cater for 70% of travellers in and out of the West African region. Initiate a propaganda of fly Nigerian airlines on the route they are available,” he said.

Akpan also warned that Nigeria must not delude herself that other countries would help them develop their aviation industry.

“They can only exploit our market using lofty PowerPoint presentation of the gains of partnership. You are only useful if working with you helps them meet their target percentage of contribution to the GDP of their national economy from their aviation sector. What is our own desired target from our aviation sector in 5/10/20/50years,” Akpan asked.

He acknowledged that these foreign airlines would lose huge revenue for not operating flights on Nigeria route but not compared to the impact on Nigerian travellers who would pay higher fares or travel through neighboring countries.

Exploitative Fares

THISDAY investigation revealed that fares charged by foreign airlines in Nigeria are the highest in West and Central Africa. What is happening currently is that Nigerians go to Togo and Accra, Ghana to board flights to international destinations. The disparity in fares is so large that if a traveller takes flight to Accra from Lagos and then board a flight to London he would still make gain than if he travelled directly from Lagos to London.

Industry stakeholders said this had always been the reason why they do everything to stop Nigerian airlines from flying to their destinations. Nigerian carriers will fly Nigerians at lower fare, which would force them to also reduce their fares.

THISDAY learnt that when Asset Management Corporation of Nigeria (AMCON) stopped Arik Air flight to London after taking over the airline in 2017, Lagos to London fares increased by 40 per cent. Medview Airline crashed fare from Lagos to London. Air Peace crashed fares from Lagos to Johannesburg and even to Sharjah in the UAE. So, in order to maintain the high airfares in the Nigerian route, these airlines connive with their countries to fight Nigerian carriers through diplomatic channels.

“But they succeed because the Nigerian government does not have clear policy on aviation and what exists does not contain clauses to protect our own carriers. I don’t know whether that has to do with the fact that Nigerian airlines are privately owned and government feels detached from them, but they are carrying the Nigerian flag. So, what we obtain is arbitrary reaction from the Minister of Aviation or the Minister of Foreign Affairs, but there should be protection policy in the civil aviation regulation in favour of Nigerian carriers on international flight service,” an industry operator told THISDAY.

Demand And Supply

A country manager of one of the foreign carriers that operate to Nigeria told THISDAY that above all, there is the law of demand and supply, which is one of the reasons why airfares in Nigeria is higher than anywhere in West and Central Africa, but those airlines that operate in Nigeria abhor local competition and would do anything possible to stifle it.

He said that what is interesting is that Nigerians are able to pay the high fares; so, any amount they sell their tickets Nigerians will buy.

“When Virgin Atlantic Airways operated in Ghana, they couldn’t make profit or have good load factor because Ghana does not have growing segment of citizens with rapidly growing income as we have in Nigeria. Ghanaian bourgeoise fly British Airways and they have been doing so for years. BA has grandfather rights in Ghana. But in Nigeria we have different classes of people who can afford the fares. The old millionaires or billionaires may be flying BA, their children will be flying Virgin Atlantic Airways. So, Virgin had to close its Ghana operations because it could not compete. Some of the fares in Nigeria are outrageous but the market is willing to pay,” he said.

He said that aeropolitics has always been there but Nigeria is not poised to play in it because the Nigerian government “has always believed that Nigerian airlines do not have capacity and that if drastic action is taken against foreign airlines it would injure international air travel in Nigeria.”

But things are changing. Air Peace has total of 33 new aircraft on firm order. Currently it has over 35 aircraft in its fleet. Ibom Air is expecting about 10 brand new Airbus 220, which will start arriving from end of this year. United Nigeria Airlines also ordered new aircraft and Overland Airways has started receiving its new orders. So, Nigerian airlines have overcome the challenge of capacity, an industry stakeholder told THISDAY.

Transit Facility

The country manager told THISDAY that Nigeria needs transit terminal either in Lagos or Abuja for its airlines to effectively compete with others like Rwand Air, Asky and other African carriers that enjoy such facility in their hubs.

“If we don’t develop a hub in Nigeria we cannot compete internationally. If passengers arrive in Nigeria, the State Security Service and Immigration will start scrutinizing them but if they are in a transit facility, they won’t have any interface with these authorities. Ghana has built a hub with transit facility and very soon passengers that will go to South America like Brazil, Argentina, Chile, Mexico will travel through Ghana and Nigerians will be the major people that will be using the route. Nigeria should modernize its airports and make them competitive. Do you know that 10 per cent of the traffic at Changi Airport in Singapore are tourists who come to see the airport?”

He also said that if Nigeria wants to benefit from air transport it should have clear aviation policy that should protect its airlines first and make them viable.

The federal government should have clear and efficient aviation policy that will take advantage of its teeming population of travellers. If they reduce the cost of operations, more Nigerians will travel locally and Nigerian airlines will run profitably without international service and if they are protected like other countries protect their own, they will help to cut down the revenues foreign airlines repatriate from Nigeria. That will be good for our forex. Let me give you example of cutting cost. If Ibom Air, for example, operates a flight from Uyo to Lagos and wants to use the same aircraft to operate Lagos-Accra flight, it will taxi to international terminal. This increases the aircraft life cycle and draws it closer to maintenance date, but if Africa World Airlines (AWA) that arrived from Lagos and wants to operate to Tamale, which is a local flight, it will stay at the same place it parked when it arrived from Lagos and board the domestic passengers,” he said.

Nigeria should therefore adopt measures that will stop other countries from intimidating its airlines by taking drastic action when such incident occurs and the country must adopt the principle of reciprocity and enshrine it in the Civil Aviation Act by collaborating with the Ministry of Foreign Affairs.