The Chief Executive Officer of FMC Aviation Services Limited, Mr Herbert Odika, has identified the use of ‘wrong’ aircraft type by domestic operators as one of the reasons the business is unprofitable.
Odika said an operator’s choice of aircraft, in terms of size, is a key component in the cost of operations. He said it is not economical to use a big aircraft – such as Boeing and Airbus – for a one-hour flight. Such short haul requires smaller aircraft that consume less fuel.
He said until operators matched the scale of their operations with the right size of equipment, they may not make profit.
This, he said, is predicated on the huge cost of fueling big aircraft and costs associated with the aircraft type.
He spoke in an interview in Lagos.
Many indigenous carriers , he said, use Boeing and Airbus aircraft for short haul flights with high fuel consumption.
He listed the smaller aircraft types to include: Bombardier, Embraer Fokker, ATR 72, Dornier and Beechcraft 1900 D.
Such aircraft type are fuel efficient and economical for domestic operations, Odika said.
He noted that many domestic carriers have failed because operators used aircraft that could not guarantee them returns on their investment.
According to him, the choice of aircraft is critical to the sustenance of air transport business. Odika said it was for this reason that many airlines across the world invest in aircraft that will reduce operating costs for short haul flights. Unfortunately, many Nigerian operators, he said, use Boeing 737 aircraft for short flights.
Besides the huge volume of fuel consumption of Boeing 737 aircraft, Odika said the aircraft also comes with a high cost of training pilots.
He said: “The Boeing 737 aircraft type is not profitable for domestic operations as most domestic carriers do in Nigeria. This is because of the huge costs associated with the use of the aircraft type.
“The cost of running a Boeing 737 is too high because of the fuel cost, running into half a million naira for a single flight.The navigational and ground handling charges, the landing and parking charges, catering and other associated charges.
“ With the huge cost of fueling and crew allowances operators cannot make make profit using a Boeing 737 or Airbus aircraft for domestic operations .
‘’Some airlines operating in Nigeria ought to understand the sector more by using the aircraft type that reduces costs in terms of training for crew, fueling and other factors.’’
Odika canvassed the use of regional jets ot propller aircraft for domestic operations .
He said: ‘’This is the reason why Nigerian operators should consider changing their aircraft type to remain profitable.
‘’Such fuel consuming aircraft flown in Nigeria where the cost of pilots type rating training is high is not profitable.
“Apart from the huge costs on fueling , insurance premium is very high as well as the high cost of maintenance.’’
He went on: “The solution is for domestic carriers to consider changing their choice of aircraft . They have to look at other options by acquiring aircraft type that requires less money for type rating for pilots.
“The cost of training for Boeing aircraft is too high for domestic operations. If they stick to the use of other aircraft types such as Bombardier, Embraer , ATR 72 , Dornier could be better.
‘’The solution is for operators to consider other aircraft types which is cheaper in terms of training for their pilots.
‘’Nigerian operators need to acquire cheaper aircraft type, which is ideal for their operations.
“That is why airlines must give serious consideration to this proposal especially using the propeller aircraft.
‘’Costs associated with aircraft type is critical to running profitable airline operations. This is the model that will work for Nigeria.”
He proposed collaboration between aircraft manufacturers and aviation training colleges in Nigeria to reduce the cost of offshore training and transfer of technology.
He went on: “ If government could consider collaboration with aircraft manufacturers such as Boeing, Airbus , Embraer and Bombardier to come to Nigeria and set up training centres in partnership with and the aviation college in Zaria or Ilorin it will assist to reduce the cost of training pilots on type rating.”
“We need to look at collaboration to save costs.
‘’Government needs to give airlines tax relief to enable them train more pilots and provide a pool for indigenous professionals in the in dustry.”
On how to grow cargo in Nigeria , he said government needs to put some policies in place to attract export of farm produce by providing the required facilities and possible reduction in charges associated with cargo.
He proposed subsidizing of landing fees for farm produce at the airport as one of the ways of encouraging export by air.
He cautioned against imposing revenue target on aviation agencies which put pressure on airlines that are struggling to keep their operations afloat.
“The airlines are only trying to survive in an industry where we are trying to get our processes right.
“When we get our processes right suspend target on debt recovery then the industry could move forward.
This is why commercial banks are not keen on investing in the aviation sector , because it is not profitable ,” he said.
He canvassed alliance among airlines to make them stronger and competitive.
Meanwhile , the chief executive officer of ABX World Nigeria Cargo, Captain John Okakpu has urged the Federal Government to initiate policies that will stimulate the export of agro – allied produce by reducing airport and customs handling charges.
ABX WORLD Nigeria, he said is collaborating with ARIK AIR and Skyway Aviation Grand Handling Company ( SAHCOL) to repositioning Nigeria’s agro-allied produce to markets across Europe and the rest of the world.
Okakpu said the firm is pursuing a revolutionary project that will leapfrog the agro – allied sectors in the country while boosting the supply chain involving transportation, logistics, aviation and packaging.
He canvassed the establishment of purpose-driven cargo facilities, strategically built around passenger airports to attract and sustain airlines’ interest in the business.
He urged the Federal Government to consider airfreight subsidy in the agricultural sector for rapid growth.
