Industry experts will readily tell you that the challenges to running an airline business are huge. So huge that many governments cannot even handle it. Starting an airline is tough.
Running a profitable airline is even tougher. It is not a business for the faint of heart. It will take an individual with a strong personality and shrewd business acumen to venture into starting one. Challenges facing airline industry are many and persistent—cyclical nature of business, slowing down of the global economy, uncertainty of fuel prices, technology, the weather and in Africa, politics; dirty politics.
When profitable airlines start to place orders for new technological aircrafts, in order to remain ahead of competition, money is borrowed from the financial markets and interest cost goes up, affecting the bottom line—shareholder’s return on investment. Fuel costs are high. There is very high competition. Crew costs-pilot, AME, cabin crew, is high. Consider Warren Buffett, who once famously abandoned the airline market and expressed his displeasure by claiming: “If a far-sighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favour by shooting Orville down.” However investment firms now consider the domestic airline industry to be a safe bet.
America is founded on people who take risks and have entrepreneurial drive. While it sounds crazy, running an airline business can be done with determination and a lot of believing in your vision. You will need to find a niche in the market that will show consumers that your airline is superior to others. You can also start as a small regional airline and adapt later. If you can provide popular destinations, there are many people who will pay for that, as long as the cost isn’t too outrageous. You have to select a primary hub, secondary hub and focus cities. The primary hub is the primary airport from where most of the operations take place. The secondary hubs are the next most active operations airports.
Africa Domestic Airlines.
The airline industry is enjoying a boom nowadays in Africa, as the need for faster connectivity increases day by day. For years African travellers have relied on a handful of local airlines and more often, international carriers from Europe and even the UAE. So much so that it became common for passengers flying between African cities – even within the same country, to go via Dubai or London. It’s certainly still challenging to get around Africa but there has been some improvement in recent years and the need to travel to the UAE or some European city to connect isn’t quite as strong as it used to be. The emergence of new airlines, as well as a diversifying of intra-African routes, is beginning to make itself felt.
Airlines are now set up with the aim of capturing more of regional travellers. Already more than 100 airlines operate across Africa, with more on the way. The International Air Transport Association (IATA) has identified that the top 10 fastest growing aviation economies over the next 20 years will all be in Africa. Better air connectivity has boosted trade in goods and services as well as tourism. IATA forecasts that passenger numbers in Africa will grow. Their business strategy typically focuses on connecting small towns with tourist hotspots or remote busy locations.
Ibom Air, a commercial airline owned by the Akwa Ibom government, launched its maiden flight on June 8, 2019 and joined the list of new airlines in Africa. On that day, the people stood by to watch, clap, and shout happily as the flight, a Bombardier CRJ 900 series with registration number 5N-BWM, took off by 12 p.m and hit the blue Uyo sky for the Murtala Mohammed International Airport, Lagos. Thirty minutes later, a second flight took off for Nnamdi Azikiwe International Airport, Abuja. Ibom airline started with three aircrafts, and doing only two routes – Uyo-Lagos and Uyo-Abuja. All Ibom aircrafts are six years old.
Ibom Air is owned by the state government as Ethiopia Airline is by their government. It is the continuing story of economic renaissance by the administration of Governor Udom Emmanuel. He believes that if Ethiopia Airline, even Rwanda Air can thrive through prudent management, so will Ibom Air. The fact that Kenya and even Uganda have thriving airlines, so would his survive. The governor was a banker; he understands business, he knows that air business is viable. Ibom Air was set up and given to consultants to manage it with key performance indicators.
Speaking at the airport ceremony on the day of the inaugural flight of Ibom Air, Governor Udom Emmanuel said, “Today’s occasion is a watershed moment for us as a people. Never in the history of this nation or indeed anywhere else in Africa that I can recall, has a state government gone into airline operations. Akwa Ibom state is, therefore, the first to achieve this, and we should all collectively give ourselves a pat on the back.”
The governor said the takeoff of Ibom Air was a testimony to his administration’s vision for rapid industrialization of the state.
“Investors will continue to flock into our state, given the ease of traveling the launch of this airline will engender, the peace we enjoy and the hospitality of our people. We are all winners in this!” the governor said.
Charles Udoh, Commissioner for Information in the state, was among the passengers in the Uyo-Lagos inaugural smooth and exciting 45-minute flight.
He said, “It wasn’t anything that I didn’t expect. If you look at the aviation state in Nigeria today, Ibom Air has the youngest fleet of aircraft in the Nigerian airspace, we are looking at aircraft that are just six years old. I am particularly excited because I have followed the progress from day one and see it come to fruition.”
When the flight arrived Lagos, two fire trucks drove to the airport tarmac to spray water on the body of the aircraft to symbolically welcome it to the airport. “We are saying, if the Ethiopian (Airline) could succeed, then we could succeed as a people,” Udoh said.
“Our dream to open up our state through land, air, and sea will come full cycle. Without air travels, investors cannot freely come in (into the state). We have had problems with airlines. Initially, we had three airlines flying into Victor Attah International Airport. But as we speak, it’s just one. Our state-owned and run Obong Victor Attah International Airport has a category 2 runway and work is ongoing on the second taxi way.” Governor Emmanuel had said.
“This goes to show the mind-set and the experience of the governor in terms of business,” Gabriel Ukpeh, the chairman, Committee on Foreign Direct Investments (FDI) in the state added.
Although the foresight of the governor in launching Ibom Air has attracted envy and cynicism from conservative state governments and also wild criticisms from some quarters, one opposition party chieftain put politics aside and endorsed the concept of Akwa Ibom-owned airline.
Mr Anietie Usen described Ibom Air as the “newest and the freshest aircraft” in Nigeria.
Usen, a journalist and former editor of Newswatch magazine said, “My first surprise was the freshness of Ibom Air aircraft: very fresh, very clean, very clear leg room, very comfortable seats, feels like ‘tear-rubber’, very friendly crew and uniquely packaged and presented snacks in State colours of orange, green and white.
“I am very much at home with the Nigerian aviation industry, dating back to 1976, when I boarded my first flight from Calabar to Lagos with Nigeria Airways. As Aviation Correspondent of Newswatch Magazine in the mid-80s, I went to work at the Lagos airport virtually every day, flew to all Nigerian airports, wrote extensively about the industry and has remained a close watcher of the aviation sector.
“In 43 years of flying around the world, with commercial airlines, private jets, military carriers (C-130), this is the newest and freshest aircraft, I have flown in Nigeria. And then, just as scheduled, at exactly 9:00 am, Ibom Air taxied off the Apron unto the runway. Phew! It was seamless. Take off: smooth. Flight proper: smooth. Landing: smooth; just as I prayed.”
Ibom Air is the child of business acumen and a vision of industrialisation of the state governor. It is a major piece in the puzzle along with the intended Ibom Seaport that is still awaiting the federal government approval. Surely the governor’s dream to make Akwa Ibom a major hub in West Africa is on.
Brand awareness of Ibom Air is strong and they have picked lucrative routes, huge underserved markets that will help their investment. Marketing and press relations are awesome, the flights are full, there is customers’ satisfaction and maintenance is assured as there is a maintenance wing at the State-owned airport. Fixing problems quick will be vital to the success of the airline. Ibom Air is meeting a growing need for safe, reliable travel.
If for nothing else, it is the ease with which huge numbers of people especially business people now find in flying into Akwa Ibom state. This was the driving dream behind the concept to have the first state-owned airline in Africa in a state that has its own state-run airport. Surely, Akwa Ibom state is open for investors and tourists as the people of Akwa Ibom state have reached for the skies, head and shoulders above all other states in the federation.