Report: Compared to 2015 General Election, Aviation Records Less Patronage

Bismarck Rewane

By Chinedu Eze

With less funds deployed in this year’s general election campaigns by major political parties, the aviation sector has so far recorded less flight movement both in charter and scheduled operations, compared to the 2015 poll, THISDAY has learnt.

This was disclosed in the latest report of the Lagos Business School’s (LBS) monthly breakfast meeting that was presented by the Chief Executive Officer of the Financial Derivatives Company Limited, Mr. Bismarck Rewane.

The report noted that in this year’s election, there has been semi-strong booking this February, compared to the same period in 2015, adding that rotational expatriate traffic is much lower in 2019 compared to 2015.

According to the report, more Nigerians fled out of the country in 2014, few months before the election in 2015 than they did in 2018, months before the 2019 elections.

“In 2015 there was more free cash flowing than in 2019,” it said, explaining that industry experts attributed this to the shrink in economic activities, closure of companies and lay off of thousands of workers between 2015 and 2019.

“There is increased squeeze on airline profit margin owing to higher input in costs,” the LBS report stated.

In the same period, the report pointed out that global airline share prices declined by 20 per cent in 2018, thus reflecting investors’ concerns about airlines’ financial performance.

It also noted that premium class passengers accounted for 5.1 per cent of total passenger traffic between January and October 2018.

On foreign airlines operation to Nigeria, the report revealed that Air France last year indicated that the French carrier would stop its Port Harcourt-Lagos-Paris flight and now operate daily flight of Lagos-Paris flights.

Also German mega carrier, Lufthansa had also announced that it still records high load factor despite the low season that started after the Yuletide, which has prompted promo fares across board introduced by international airlines.

Many industry experts commended the Single African Air Transport Market (SAATM) signed for implementation last year but its lukewarm reception in some countries like Nigeria has hampered its overall success.

However, regional carriers like Ethiopia Airlines, Kenya Airways, South Africa Airways, Africa World Airlines (AWA) and Air Cote d’Ivoire have started benefitting from SAATM.

The federal government recently disclosed that it had taken steps to designate strong, viable indigenous carriers to operate international destinations in order to grow the country’s foreign exchange (FX) earnings by $2 billion yearly through ticket sales.

It said it had also certified local aircraft maintenance organisations to stop Nigerian airlines from taking their aircraft overseas for major maintenance checks.

Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Muhtar Usman, had told THISDAY that in all the recent Bilateral Air Service Agreement (BASA) Nigeria entered into, the government also made it clear that foreign airlines must partner domestic operators.

He said the government also designated Nigerian carriers to operate long haul destinations, just as he projected that in the next four years, Nigeria would save over $2 billion annually through the initiative when the policy is fully implemented.

This, he said, would enable the Nigerian carriers benefit from skills acquisition, fleet renewal and revenue generation.

“Nigeria needs very strong viable airlines to operate those routes. The government has done what it needs to do, designate the operators to operate those routes. I know airlines have been designated along the routes you mentioned such as the United States, United Kingdom and some other countries both in the Middle and Far East. It is for the operators to explore it and operate because we have other international airlines coming from those countries,” he had explained.