Last week, Dana Air and Ibom Air signed an all-encompassing codeshare agreement to work together for better satisfaction of their customers. Chinedu Eze writes that if fully embraced it would boost the revenue of the domestic carriers
Last week two Nigerian carriers, Dana Air and Ibom Air signed full codeshare agreement, the first major airline alliance for over a decade in Nigeria.
A codeshare agreement, also known as codeshare, is a business arrangement, common in the aviation industry, in which two or more airlines publish and market the same flight under their own airline designator and flight number as part of their published timetable or schedule.
It is also related to interline, which is a voluntary commercial agreement between individual airlines to handle passengers travelling on itineraries that require multiple flights on multiple airlines.
These alliances are what made many airlines in different parts of the world successful and it has become a tradition in more advanced societies like the US and Europe, where a passenger with a ticket from one airline could travel with other airlines, connecting flights with other operators.
The codeshare agreement between Dana Air and Ibom Air was historical because it was comprehensive and broke the jinx that had lingered over the years because of apprehension and suspicion, largely whelped by stiff and unhealthy competition among domestic carriers.
The Nigerian Civil Aviation Authority (NCAA) had at different occasions canvassed for airlines alliance, seeing it as the key to reduce flight cancellations, flight delays and low load factor, whereby two or three airlines would airlift passengers small number of passengers to the same destination instead of putting the passengers on one flight and having a full load factor.
THISDAY had spoken to airline managers who would conceitedly say that they won’t partner with other airlines because they have different ideology, different history and so on, but industry observers say that the objective of airline business is to take passengers and goods from place to place and make profits.
So, Dana Air and Ibom Air have to be commended for showing other airlines that this could be done.
Need for Alliance
At different aviation fora in Nigeria, aviation consultant who is also the Chief Executive Officer of African Aviation Services Limited and the President of African Business Aviation Association (AfBAA), Nick Fadugba, had said that the key for survival of the domestic carriers is partnership.
Fadugba said Nigeria is the strongest market in Africa and therefore should have viable airlines.
“First of all, I am very passionate about aviation in Nigeria, I believe we are not where we should be today, given our resources. There is no market in Africa that is comparable to Nigeria. Whether you are a market lady or a board chairman, we travel; we are a nation of traders. Many foreign airlines are coming into Nigeria making good profit and yet most Nigerian airlines, to the best of my knowledge, are not making a lot of money,” Fadugba noted.
He also said, “In fact, some airlines are quite poorly financed, so we need to do better. You know the international aviation industry has changed dramatically since the days of Nigerian Airways; today no airline can succeed working alone.”
Therefore, I want to once again appeal to airlines in Nigeria to come together, to work together in operations, training and maintenance. We need to partner. Even if we don’t merge we need to partner with one another,” he explained.
Fadugba also noted that the average fleet size of airlines in Nigeria was about maximum of 10 aircraft and such airlines want to compete with British Airways that has over 400 aircraft, noting that Delta Air Lines has over 500 aircraft even Ethiopian Airlines has a 110 aircraft.
“So how can small airlines compete? And I am not being disrespectful, by the way; the airlines I am not talking about is fleet size, I am not talking about commitment to the industry, but I want to be realistic, because this industry is cut-throat.
“If you don’t have a critical mass in terms of size, in term of good management, in terms of fleet, in terms of good network, it is very hard to succeed. So we have the market in Nigeria, we are very fortunate but the fact is that our airlines are at the moment not of the size that can compete effectively against the big airlines coming into Nigeria,” the industry consultant said.
Speaking in the same vein, the Managing Director and CEO of Aero Contractors, Captain Abdullahi Mahmoud, told THISDAY that such cooperation would ensure that passengers’ interest was protected.
He lamented the lack of cooperation among Nigerian carriers, saying this has adversely affected their operation.
According to him, if they have been working together they would have been reaping the benefits of such cooperation, which include providing alternative choice of flights to their passengers.
“I have said it severally that one of the biggest challenges that airlines in Nigeria have is that they find it very, very difficult to come together. There is dirty professional politics that is being played, which is very, very unfair. And it is so disappointing because when an airline is having problem another airline will feel happy about it.
“But if the airlines come together, even if there no interline, you will have what they call passenger protection. You will sign a protection agreement with other airlines. When you have a challenge, you will call the other airlines and seek the protection of your passengers,” he said.
The above observations underscore the significance and impact of the partnership between Dana Air and Ibom Air to the aviation industry.
Benefits of the Partnership
The signing of the codeshare agreement took place at the Victor Attah International Airport, Uyo between the Chief Operating Officer and Accountable Manager of Dana Air, Obi Mbanuzuo and the Chief Operating Officer of Ibom Air, George Uriesi.
The airlines described the partnership as significant milestone for Nigeria’s aviation industry, which would afford Dana Air and Ibom Air a business arrangement whereby both airlines jointly offer flights to common destinations, while operating services to destinations that are not within each airline’s regular routes.
By so doing, both airlines expand their market presence and competitive footprint in the interest of the flying public.
The airlines also said the codeshare alliance would commence full service in June.
Speaking at the ceremony, Mbanuzo noted that the plan to sign the agreement started a year ago, adding that it is a partnership for sustainable growth.
“The discussion started about a year ago and we are happy to be here today, formalising it. This is the first of its kind for domestic airlines in Nigeria and a huge step in the right direction for both Dana Air and Ibom Air.
“It is a partnership for sustainable growth and connectivity for the flying public as Ibom Air passengers can now fly Dana Air to Owerri and all other Dana Air destinations while our guests can now fly to Calabar and other Ibom Air destinations.
“Dana Air, like Ibom Air, is committed to the growth of the aviation industry and both airlines have shown great commitment to customer satisfaction, schedule reliability, operational efficiency, passion and innovation. We do hope that this partnership between Ibom Air and Dana Air will set a positive precedent for greater good of the industry”, he said.
Also speaking at the event, the COO of Ibom Air, George Uriesi, said the alliance would offer increased frequencies into common destinations as well as codeshare flights into destinations each airline operates into, providing more options for passengers and businesses retention for both airlines.
According to him, “With the initiation of this business alliance, both airlines have embraced a key global best practice. At Ibom Air, our business model and unwavering commitment remains schedule reliability, on-time departures and excellent service. Hence, we are constantly on the lookout for better and more effective ways to serve our customers.”
He explained that the code-share agreement helps the passengers by providing them clearer route options and allows them to book travel from the two airlines under one carrier’s code. This proves beneficial if the customer books from point one to two under one code and then from two to three under the other code.
Ibom Air operates multiple daily flights between Uyo, Lagos, Abuja, Calabar and Enugu and will be launching the Port-Harcourt destination from June 7, 2021.
Having commenced operations in June 2019 with CRJ900 aircraft, the airline said an additional two brand new Airbus A220 aircraft will be joining the fleet this month, bringing the number of aircraft to seven, making it one of Nigeria’s fastest growing airlines.
Ibom Air has delivered a consistent average of 91 percent schedule and on-time performance since its inception.
Dana Air is one of Nigeria’s leading airlines with a mixed of nine aircraft and daily flights from Lagos to Abuja, Port Harcourt, Enugu and Owerri. The airline is reputed for its world-class inflight service, innovative online product and services and top- notch on-time performance.
Passenger Satisfaction
The Dana Air Chief Operating Officer and Accountable Manager, Mbanuzuo, told THISDAY that the main objective of the codeshare agreement was to give passengers of the two airlines the best service.
“It is normal to ensure that the passenger has better choice of service. Now, what we didn’t actually mention today is that from last year Dana Air and Ibom Air have been having re-protection agreement. And re-protection agreement is for regular operations when there is a problem. It is not normally something that we would advertise out there because it is not for regular operations. But we have had agreement and arrangement whereby if Dana Airline or Ibom Air has a problem or situations that are technical, we can help each other out. So this is like the next step of the process. We have had lower level agreement already before this. And so moving it further to try and ensure that, when we saw the benefits of that previous agreement, so we think going further for the customer,” he explained.
Impact in the Industry
The Chief Operating Officer of Ibom Air, Mr.Uriesi responding to a question on what impact the codeshare would have in the industry, remarked that it is hard to say right now but expressed the hope that if the partnership goes as planned it would have the desired impact.
“If you ask me this question six months down the line, I would have had evidence to show that our business before the codeshare and our business after the codeshare. But what I would say is the airline seat is a very perishable item, once that door closes any seat that is not occupied is perished forever.
“So the airline aims to put as many people on board as possible as on an aeroplane can take. So if we have a flight where we have 65 passengers and we close the door, we go with 65 passengers.
“But if because of the Dana Air alliance, 15 more passengers join, instead of 65 we will be carrying 80 passengers. That is 15 more passengers as a result of Dana Air and vice versa.
“And if you cumulate that over a month, you will be surprised how many extra passengers come on your flight as a result of this alliance. And you can easily calculate that and you see exactly how much more optimal your business is because of the alliance with Dana.
“And the alliance is not just on the passenger level, we plan to synergise in many, many ways. We will synergise our schedules, even other things including up to maintenance at some point. We are going to try and pull resources to work together as an airline.”
Travel expert and organiser of Akwaaba African Travel Market, Ikechi Ukoh described the codeshare agreement as significant.
“It is a positive thing. You know I tried to create codeshare for airlines in West Africa because I know the benefits. It is very desirable and brings comfort to the traveller. It will also reduce cancelled flights and flight delays.
“The two airlines may arrange it that every hour they have a flight to one of the major routes. I like the two airlines and they seem compatible. Before Ibom Air came, Dana Air has the best in-flight service,” Ukoh said.
