For a country which airlines are known to thrive on average of 10 years, surviving 12 years is a great achievement for Dana Air, which bounced back from a very challenging time four years into its operation to become an airline that is endearing to many air travellers.
Dana Air and Afrijet started operation the same year in 2008. The latter is no more. Discovery Airline came on board after, lingered for a few years and then exited and within the last 10 years IRS Airline, First Nation Airways, Associated, Chanchangi and perhaps temporarily, Medview have left the Nigeria’s airspace.
According to Flight Global, many of the structural and institutional deficiencies that caused the collapse of Nigeria Airways remain. Additionally, the global airline industry has become fiercely competitive, and new entrants would have a very hard time surviving.
In Nigeria there are factors that make airline business a very precarious one and government, aviation agencies and industry stakeholders are yet to acknowledge and own up to their contributions to the perilous environment that ensures the short life span of airlines.
It is in the face of this reality that Dana Air should be commended for remaining an ongoing concern after 12 years and indications show that it is still on the path of growth, adding more aircraft to its fleet and opening new routes.
The Chief Operating Officer of Dana Air, Obi Mbanuzuo told THISDAY that the airline has striven to operate efficiently and it is customer oriented in the sense that its priority is to ensure on time departure and also enviable in-flight service, which has attracted loyal customers to the airline over the years.
“We have tried to maintain our service level post COVID-19 and our priority still remains taking our passengers to their destination in time. We have ensured that we keep to these basic rules and we have maintained that tight on-time schedule. Our passengers understand our level of efficiency and they understand and know the way we relate with them and so far we have continued to meet their expectations,” the COO said.
According to industry stakeholders, aircraft insurance companies, international airline partners, Nigeria is a harsh operating environment because of uncertainties, including policy summersault, unfriendly tax regime, lack of maintenance facilities, the difficulty in leasing aircraft and lack of adequate government support. But Dana Air has buffeted through these odds over the years.
Mbanuzuo said when one refers to environmental obstacle it includes the fact that an airline cannot plan and not being able to plan means that the airline cannot make projections about its future. This is due to policy summersault. For example, every Minister of Aviation comes to make its on laws or tweaks the existing ones; so the laws exist at the whims of the individuals; not just based on existing regulations as institutionalised.
“One of the major challenges about our environment is that it is very difficult to plan. You cannot plan with your banker on financing your operations because even as discussion is ongoing one policy will come up and erode your plan unexpectedly. So we have the problem of policy summersault. We don’t control the environment; so we cannot plan ahead. For example, VAT was raised from 5 per cent to 7.5 per cent, which means that airlines have to pay more. This will affect your financial projections. So it is really very difficult to plan,” Mbanuzuo said.
He explained that due to low profit margins airlines make, they depend on long term loans to acquire aircraft, which cost millions of dollars, but this is difficult to do in the Nigerian environment because of high interest rate and undulating economy, where the dollar can record astronomical rise against the local currency any time.
“Interest rate is very high; so it is difficult to borrow money on that rate. Airlines make at most 10 per cent profit margin. You cannot buy aircraft at that rate because it involves millions of dollars. In 2016 we started a plan to renew our fleet but economic downturn came and we lost that finance support,” the COO also said.
Nigerian airlines pay outrageous insurance premium, they find it difficult to lease aircraft, they ferry their aircraft overseas for maintenance at huge cost. Now that the dollar is rising fast against the naira, it is extremely difficult to pay for aircraft maintenance and acquisition of spares.
But Dana Air has survived similar challenge in the past and Mbaduzuo told THISDAY that the resumption of flights to Enugu on Tuesday is not temporary.
In 2014 we left Enugu when the airport was closed. But now we are not planning to leave,” he said.