Air Peace Success Key for Nigerian Airlines to Take Over West African Travel Market

Since it started operations more than three years ago, Air Peace has recorded surprising success to become the airline with the highest number of aircraft in West Africa. Now, it is poised to lead other Nigerian operators to take over the travel market of the sub-region, writes Chinedu Eze

Since the past 20 years Nigerian airlines have failed to dominate the West African travel market; yet about 65 per cent of passenger movement in West and Central Africa are Nigerians. These are traders who move and trade goods from one city to another in the sub-region; entrepreneurs, investors, entertainers, diplomats and professionals who move their skills from one country to another in the area, known as the West Coast.

Seasoned aviators who held sway during the time of the defunct Nigeria Airways Limited (NAL) said there was a time the airline was breaking even from its operations in the West Coast and few years later the defunct Bellview Airlines seemed to have inherited the destinations. At the peak of its operation before it went under, it was a national carrier of Sierra Leone, operating to London with the flag of the West African nation.

Also under Captain Dapo Olumide, the former Virgin Nigeria Airways struggled into profitability, harnessing the gains of its West Coast operation, as the management then began to offset the airline’s loaded debts before it was sold to another entrepreneur, which harbingered its extinction.

Travel expert, Ikechi Uko is of the view that Nigerian airlines should take advantage of the West and Central African routes because the dominant passenger traffic on these routes are Nigerians; so the airlines do not have any excuse to give than to device strategies and dominate the routes.

 

Short term operation

Besides Nigeria Airways which operated for decades before it went under at the time most of its contemporaries were also saying goodbye to the skies, many Nigerian airlines have had average 10 years of operations before they begin epileptic performance or they just disappear from the sky. So records indicate that many Nigerian carriers that have gained traction in the West Coast lost it after few years, when they become infected by the bug that killed their predecessors, which experts attribute to bad management, harsh operating environment and excessive taxation.

Meanwhile, air travellers who move goods and services in West and Central Africa currently suffer so much because there is no air connectivity between some countries in the sub region and available connectivity comes with outrageous fares because of limited capacity and lack of competition on the routes.

 

SAATM

The Single African Air Transport Market (SAATM) is simply defined as a flagship project of the African Union Agenda 2063, an initiative of the African Union to create a single unified air transport market in Africa, the liberalisation of civil aviation in Africa and as an impetus to the continent’s economic integration agenda. The implementation of SAATM was signed by 23 countries and it promotes single sky for the participating nations, which means that there would no more be immigration hindrances and blockage of flights owned by airlines registered in Africa. This policy, which can simply be referred as open sky for Africa, aims to encourage easy movement of air travellers from one country to another and when it becomes fully operational it would create wealth for participating African countries.

A survey carried out by the International Air Transport Association (IATA) shows that if 12 African countries open their markets and increase connectivity it would created extra 155,000 jobs and generate revenue of about $1.3 billion in annual GDP.

SAATM will enhance air travel in the continent, which currently is full of hiccups. It will encourage competition among African airlines and it would give African carriers the opportunity to enjoy the market in the continent, which literally has been hijacked by European and Middle East airlines.

SAATM may be an opportunity for Nigerian airlines to explode into profitability. But there are hindrances. One, Nigerian Government has to support the airlines from other countries’ restrictions through outrageous charges by ensuring that in the principle of reciprocity, Nigerian airlines are not overcharged by other participating countries in the continent. When these countries become hostile to Nigerian airlines government should ensure that it reciprocates when airlines from such countries come to Nigeria. Because Nigeria has the major market in terms of passenger traffic, blocking any airline from the continent from accessing Nigerian passengers would drastically affect its operations.

 

Level playing field

The Chairman and Chief Executive Officer of Air Peace, Mr. Allen Onyema said as much recently in an interview with THISDAY. He said that government must have to protect Nigerian airlines so that other countries participating in SAATM would not in the bid to protect their own airlines use outrageous charges and adverse policies to restrict Nigerian operators.

“No country gives blanket approval for whatever treaty they signed, no country does that. So SAATM does not favour Nigerian airlines as it stands today. Have the authorities bothered to find out the landing charges these other countries in Africa give to Nigerian airlines that are coming into their countries? Look at Abidjan (Cote de Ivoire); have they bothered to find out what their countries do for them in terms of charges? They are not paying the same charges as we do. In Ghana, AWA (African World Airlines) is not paying the same charges in their country as we do. So they can afford to crash their fares. We cannot afford to do so because when we get into their country they over charge us.

“Why have we not started operation to Abidjan? Because they gave us something out of this world. They charged us $6000, to $7000 per landing. How many people are you carrying to justify paying such exorbitant charges? But when they come to Nigeria they pay peanuts. So why won’t they run out the Nigerian airlines? This is what we are saying. Air Peace is the biggest airline in West Africa for now. Asky is not bigger than Air Peace; Air Cote d’voire is not bigger than Air Peace. There is no airline in West Africa that is bigger than Air Peace. But we cannot compete even with those smaller airlines. What we are saying is that the area they will run us out of the market is on charges because they don’t pay the same charges as we do,” Onyema said.

 

Over taxation

The Air Peace boss said part of the hindrances Nigerian airlines face is over taxation, which makes them uncompetitive with other African airlines, which are largely protected by their own governments.

“We are over taxed here in Nigeria and we are also over charged by other countries in the region. For every passenger you bring into Cote d’lvoire you are paying about $100 or more than that. The total charges for a Nigerian airline in that country is about $7000. The aircraft is not even carrying up to $3000 revenue from passengers, so how can you succeed? That is why we have not started our Cote d’Ivoire route. And even the other ones like Senegal is the same thing.

“So what our government can do for us is to call these other countries and urge them to streamline the charges first before they will allow full implementation of SAATM. I am not against SAATM, Air Peace is not against the Single African Market but it has to be streamlined to benefit everyone, so that we will not have a parasitic union with these African countries. It has to be symbiotic. Ethiopia for instance, does any airline in Nigeria go to Ethiopia? They don’t have anything to offer us, so they should regulate the number of times they come into our country and tell them if you want to do more key in with other Nigeria airlines.

“In South Africa this is the way it is done. It is also done like that in other countries. So why is our own different? Why are we killing our own industry? We need to provide jobs for Nigerians. The monies these airlines cart out of this country they use it to develop their own; while our people are left on the streets. There are many Nigerians who can invest in airport infrastructure; Bi-Courtney has proved that by setting up a terminal and employing Nigerians. When we invite foreigners to come and invest in certain sections of the economy, we have to look at what they will repatriate from the economy at the end of the day. And they usually come with certain conditions, so we have to be careful about SAATM.”

 

West Coast, beyond

In less than four years, Air Peace has upped its fleet from seven to 24 and it is still ordering more aircraft. This means that Air Peace is well prepared to take advantage of SAATM and it has also been designated for international operation and it has acquired aircraft for long haul flights.

THISDAY spoke to Onyema on the day its first Boeing B777 aircraft was delivered and he said that the airline was expecting four of the long-haul aircraft.

“For the initial start we are expecting about four aircraft (Boeing 777), we have already procured the first two, the other two we are still negotiating and before the coming of the last quarter of the year two more will join but for now we have two,” Onyema said.

He said the aircraft and the ones being expected would be deployed for service as quickly as we “get the cooperation of everybody, Air Peace is ready but as quickly as we get the cooperation of everybody-the aviation agencies, our own government, the outside governments of countries where we are going to be flying to, as soon as we get their cooperation we will make it happen.”

The Air Peace boss said contrary to views making the rounds, Nigerian airlines can compete effectively if equal opportunity is given to them along with other airlines from other countries in the continent.

“I don’t believe that Nigerian airlines cannot compete favourably, what is lacking is that Nigerian airlines do not have the necessary support for them to compete favourably.  What Air Peace has done in the last two and half years, I think few airlines in the world has done it. In the last two and half years we have increased our fleet to about 17 more aircraft, that is rapid growth and we are still growing and still very strong. So if anybody says Nigerian airlines are weak they should be able to mention those airlines that are weak because Air Peace is not weak, it is not a weak airline; it is a very strong airline. And in safety we are strong and we can pride ourselves that we can match anybody under the sun.

“We pride ourselves as being the first Nigerian airline to own its own 777; no Nigerian airline has owned a 777 since the beginning of Nigeria in 1914. This is the first time a Nigerian airline will own a B777 and we deserve kudos not condemnations. So we can stand our own anywhere, as far as I am concerned we are doing the right things in safety and in our operations,” Onyema said.

Efficiency and operational fleet

On efficient operation in the West Coast, the Chairman of Air Peace assured air travellers that the airline has not disappointed its passengers in the local services; that it would extend such efficient service to its regional and international operations.

“We have not disappointed on the local scene. That does not mean there are no occasions where we didn’t get it right, nobody is perfect but you can give us 95 per cent. We are taking the same per cent to the international and regional scene; that is what we are going to do. We don’t delve into something when we are not ready. I don’t expect myself to start doing the regional scene if I don’t have enough fleet to service those routes that we have chosen to do on the local side and at the same time I am going to use the same aircraft on the regional scene; that is the difference between us and anybody,” he said.

He said the airline has about N14 Boeing B737s, six regional jets, Embraer ERJ 145, and two Donnier jests and two Boeing B777; that is about 24 aircraft.

“So we are not going to disappoint Nigerians on the regional or international scene because we will never delve into them except when we have enough fleet and now we have enough fleet, we decided to open up the regional route. We have been doing Ghana for over a year, we didn’t get tempted to go and start doing other routes in the sub-region; that would be over stretching ourselves. When all our planes arrived we launched Dakar, Banjul and we launched Free Town. In the coming weeks you will see us going to Lome and Abidjan and Liberia.

Foreign carriers

Over the years aviation administrators in the Ministry of Transport and the agencies argue that the reason why government designates many foreign airlines to operate into Nigeria is because Nigerian airlines do not have the capacity and Nigerians are good travellers. So they argue that Nigerian citizens must be provided airlines to travel with if the country’s carriers are not capable.

As logical as that sounds, there is another issue that border Nigerian operators and potential investors in the industry. When are Nigerian airlines going to be given the incentive by government for them to grow? For example, if one foreign airline is designated to five destinations in Nigeria without making it compulsory for that airline to partner with local carriers at some point, how is an upcoming Nigerian airline going to compete with the foreign airline that is already well established on those routes?

This is the area Nigerian airlines are lamenting and calling government to give them support because other countries are also supporting their own in the region.

With its readiness to operate its West Coast routes, Air Peace may provide the competition needed to bring down the fares in these routes to the benefits of air travellers and also provide the capacity which other airlines would strive to emulate.