Still on Exploitative Airfares 

According to industry experts, there is a general saying by foreign airlines that Nigerian operating environment is insecure. They use this assumption to charge exorbitant fares and up insurance premium when compared to what is obtainable in other countries in the region.

About two years ago, precisely during the Air Finance Conference for Africa in Johannesburg, Lufthansa, British Airways, Air France, and KLM officials admitted that Nigeria was their most profitable route in terms of profit per flight. What a Nigerian passenger pays as fare per distance and time is higher than what a passenger in another country in the region and beyond pay. Despite that these foreign airlines claim that Nigeria environment is insecure, it has never been on record that they abandoned the Nigerian route for a necessarily long time; except when they cannot compete, as was the case with Iberia and United Airlines that left last year.

Industry experts posit that the major cause of this is because Nigerian airlines cannot compete on these international routes. They noted that the withdrawal of Arik Air flights from New York, London and Johannesburg consolidated the high fares for South Africa Airways, British Airways, Virgin Atlantic and Delta Air Lines. Indirectly, this favours other carriers like Ethiopia Airlines, RwandAir, Turkish Airlines, the Middle East carriers and others which take Nigerian passengers to their hubs and then fly them to these destinations at comparatively lower fares than what  airlines that operate directly to these lucrative routes charge.

THISDAY learnt that Nigerians in New York and other cities are lamenting the cancellation of flights by Arik Air to the city because the Nigerian airline, like the Nigeria Airways of yore provided the Nigerian passenger more luggage and at affordable fares. It was the same experience in London and Johannesburg. Medview Airline, the only Nigerian carrier operating to London currently, has been forced to shrink its flights to London to twice weekly because of the low season. So the foreign carriers now have a field day to charge Nigerian passengers outrageous fares.

Chairman and CEO of Air Peace, Chief Allen Onyema remarked: “I have said it times without number that foreign airlines are constantly depleting our reserves because there is no Nigerian airline to compete with them. Why won’t the fares go up? They are having a field day on Nigerians. Do you know that a Nigerian passenger pays higher fare for a six-hour flight to London more than that of a South African passenger who flies nine hours from Johannesburg to London? Go and Google flight times to different destinations in the world and see what they pay and compare it to our six hours flight to London or 11 hours or 12 hours to United States, Nigerians pay more. And they will tell you the country is so unsafe, why are they coming to the country if it is so unsafe?”

The International Air Transport Association (IATA) had projected that the aviation industry in Nigeria could directly and indirectly employ one million persons and generate multiple earnings from the industry if the country’s local airlines could be empowered and if Africa embraced the Yamoussoukro Declaration, which is open sky for Africa.

This could only be achieved if Nigeria has strong local carriers that would be able to create employment and operate profitably. Profitable local carriers would create other jobs in the area of catering, cargo services, charter services, maintenance organisations and handling services.

The ultimate beneficiaries of strong, profitable Nigerian airlines are the passengers as industry observers indicate that Nigerian airlines would always charge relatively lower fares for international operations, they would always give higher baggage allowances and they would go further to “accommodate the peculiar whimsies of Nigerian passengers” because they understand Nigerian travellers better.

But the former Commandant of the Murtala Muhammed International Airport, Lagos and secretary of Aviation Round Table (ART), Group Captain John Ojikutu differed in his view about the operations of Nigerian airlines on long haul flights. According to Ojikutu, Nigerian problems are more with “our airlines rather than the foreign airlines; how many of them have developed the capacity to operate in the international routes sufficiently enough to compete with the foreign airlines? Those that are operating to London how many aircraft have they deployed for the three or five flights weekly? If they have less than two aircraft, they have not got the capability for international competition. We have about 80 Bilateral Air Service Agreement (BASAs) and only about 23 of them are operating.”

Ojikutu also noted: “We hardly can reciprocate British Airways and Virgin Atlantic operating 21 flights weekly from the UK route alone, even with Arik operating, we hardly could reciprocate 10 which is now reduced to only three Medview flights. To compete with the 23 foreign airlines on the operating BASA routes, we would need minimum 60 long range aircraft. We have been asking them to merge by pooling their fleet together but ego did not allow them; they depend on debt concessions and government intervention funds to survive only to last for about four to five years and they pack up. That has been the trend in the lifespan of the Nigerian airlines.”

But some industry observers have faulted Ojikutu’s argument and noted that governments of some African countries that want their airlines to do well usually give them support by lowering taxes, facilitating access to cheaper fuel and lead diplomatic efforts to sign BASA with targeted countries that have huge traffic passenger market like Nigeria.

“This has nothing to do with the number of aircraft. I recall when British Airways allegedly connived with the airport authorities in the UK to stop Arik from operating Abuja to London. Our government could not fight for Arik and it remained like that. How many aircraft do RwandAir have? I am not sure it is up to 10 and they deployed them to international routes and their government is helping them to penetrate African markets,” said an industry analyst.

Nigerian will continue to pay outrageous fares for international flights unless the federal government empowers and encourages local carriers to become competitive on these routes.