Chinedu Eze
Industry experts have noted that while the number of domestic air travel in the country is growing, the number of operating aircraft owned by the airlines has reduced.
This, according to them might hamper the growth of domestic airlines in the country as well as negatively affect air travelers.
Industry experts are of the view that the number of aircraft may not meet travel demand in the New Year and beyond, noting that this would drive up airfares, limit the number of people who travel on domestic routes, adding that the market would shrink instead of growing.
In the last three years, passengers’ movement on domestic routes hovered around 12 million, while that of international travel was over four million.
With impending shrink of the domestic market, industry observers said this would affect the capital base of the airlines and the contribution of the sector to the nation’s Gross Domestic Product (GDP).
The CEO of Aero Contractors, Captain Ado Sanusi, attributed this to poor investment in the aviation industry, lack of incentives by the federal government and the inability of airlines to secure long-term loans on single digit interest as obtains in other parts of the world.
“I think the industry needs a kind of re-organisation. It needs a kind of jolt because if you look at it this year (2018) a lot of airlines have gone under. Medview has gone to one aircraft operation and a lot of other airlines have gone to one aircraft operation.
“Despite the fact that the passenger growth has increased, but the amount of aircraft operating in the country has reduced. Now what does that tell you? It tells you that the aviation industry is not growing.
“The aviation industry actually is shrinking. Despite the fact that the passenger demand is high but the growth in the airlines are going down,” Sanusi said.
He said the major reason for the shrinking of the market was lack of investment in the sector and urged government to introduce policies that would enhance financial empowerment to the airlines and also protect them.
“The reason the industry is shrinking is basically no investment is coming in. Of course the only airline that is bringing in more airplanes is Air Peace.
“But I think in 2019, the government must affect deliberate policy in the industry not only on infrastructure development but also in the airlines.
“This means that the federal government should look at the airports, runways and also look at the health of the airlines and try and see how it can encourage mergers, encourage new entrants and encourage bringing back to life those that have gone under.
“So, my look at 2019 is for the federal government not only to invest in infrastructure but also to look at the airline. This is because you can have a very good infrastructure but if you don’t have airlines, there is no aviation.”
Sanusi, said the existing government policies and attitude towards Nigerian airlines suffocates the domestic operators, saying such policies don’t allow the airline to grow.
According to him, government does not provide the impetus for the airlines to grow.
“The best thing that government can do to the airlines is to facilitate it for them to access loads at affordable rates. And they can do that with the Bank of Industry (BOI), they can do that with even the pension funds.
“We have so much money in pension fund, why can’t government give the airlines a dollar denominated long-term loan and the interest rate should be in single digit, two or three per cent, like what other airlines get in other parts of world; let’s say 15 to 20 years term,” the Aero CEO said.
Former Business Development Manager of the Federal Airports Authority of Nigeria (FAAN), Adams Nuhu, told THISDAY that government must have to rejig its policies to encourage foreign direct investment in the aviation industry, encourage lessors and aircraft manufacturers to provide aircraft for Nigerian operators through guarantees and demonstrate full support for the Cape Town Convention.
