The frequent collapse of airlines is becoming a norm in Africa.Experts have,at a conference in Lagos, suggest ways to keep struggling airlines’afloat, Kelvin Osa OKUNBOR, reports.
Experts have identified high operating costs, inadequate airport infrastructure, lack of single traffic rights, and slow implementation of regional pacts as some factors militating against the growth of the sector in Africa.
They said unless these issues were addressed, Africa would not optimise its air transport potential.
The experts: former Managing Director of Federal Airports Authority of Nigeria (FAAN), Richard Aisuebeogun, former Managing Director of Air Nigeria, Captain Dapo Olumide, former Managing Director of Nigeria Airways Yomi Jones and Managing Director of Belujane Konzults Chris Aligbe, spoke at a conference in Lagos last week.
Others included Captain Mike Omokore, a search and rescue specialist, former Director of Consumer Protection at the Nigeria Civil Aviation Authority ( NCAA) Fatima Garbatti, and former Managing Director Skypower Aviation Handling Company Limited (SAHCOL), Chike Ogeah.
They said many airlines in Africa were striving to keep their operations afloat due to what they described as “external and internal factors.”
The experts said many airlines have failed or were barely surviving due to factors not limited to management business plan, safety regulation, economic regulation, adoption of low-cost carrier concept, multi-hub strategy. These, they said, could be classified as internal factors militating against the growth of African carriers.
They listed the external factors to include cost of operations, environment, economic diversification, political environment, infrastructure and unfair competition.
Aisuebeogun said many African carriers failed due to their inability to deliver a good business plan. He said a good business plan was key to running a profitable carrier. Its implementation, he said, is the difference between successful and failed carriers. According to him, for any carrier to suceed in Africa, its management should be professional.
The management of such airline, he said, should discern trends in the operating environment and align such trends with its operations according to the dictates of the industry and environment.
This, he said, should be achieved without losing sight of the business plan.
Aisuebeogun said while safety had improved among carriers, Africa still had the highest accident rate among other regions in 2015, with 7.88 accidents per million flights.
He, however, added that 32 sub-Saharan airlines on the International Operations Safety Audit(IOSA) registry were performing better than non-IOSA operators in terms of accidents.
He urged African governments to improve safety oversight responsibilities and adopt IOSA with International Civil Aviation Organisation’s safety-related standards and recommended practices (SARPs).
Aisuebeogun urged airlines to also adopt the low-cost carrier concept.
Such model, he said, would attract passengers because of lower fares.
He said: “What is crucial however, is to sustain these carriers using strategies that have worked for other airlines in Europe, South East Asia.”
He said if African airlines adopt the multi-hub strategy, they would perform significantly and become profitable.
The multi – hub strategy, he said involves an airline feeder airports as its operational headquarters in many locations.
This model, according to him, will help them improve operational network and avoid multiple regulations as well as policy barriers.
He said African governments should put measures in place to reduce cost, which is the major challenge facing carriers, adding that arbitrary charges, taxes and fees by aviation authorities had sent many carriers out of business.
Aisuebeogun implored governments to encourage diversification to empower locals to stimulate patronage of carriers.
He said improved infrastructure would not only turn cities into hubs, but stimulate passenger traffic.
His words:“Competition and liberalisation are excellent but airlines must be equipped to compete. With an economy already manifesting signs of adversity, with lower currency , high airport charges, taxes and fees in Africa, airlines are already at a disadvantage before they enter into competition.
“That is why, even with the best aircraft among African airlines’ fleet, they can hardly compete but pull out of lucrative routes. This was responsible for Arik Air pulling out of Dubai. This factor will discourage more airlines from venturing into lucrative routes.
“Despite dozens of Bilateral Air Srevices Agreements signed by African states, their airlines can hardly exploit these routes. That is why such States depend on controversial royalties levied on foreign airlines who fly without reciprocity.”
Olumide said many African carriers were programmed to fail because of lack of corporate governance.
Of the 37 airlines launched in Africa in the last 12 years many have failed. Twenty-five of such carriers, which operated from Nigeria, faced similar fate.
He said: “The biggest problem with African aviation is lack of corporate governance. The financial models of the airlines are wrong and they also lack maintenance culture.”
He, however, praised Ethiopian Airlines for breaking the jinx.
Ethiopian Airline, he said, suceeded because of the non-interference of its government on its operations .
Jones said the government did not have the political will to manage a carrier.
He said Nigeria could have a successful national carrier, if the government demonstrated the political will .
According to him, Nigeria with over 170 million population, remains a viable market for aviation with the right policies and a conducive environment.
He said there was a need for transparency in the industry to eliminate corruption.
Jones said unless corruption was eliminated, it would be difficult to move the sector forward. He decried how the property of the liquidated national carrier, Nigerian Airways, was sold without due process.
Kadri, adduced reasons why airlines fail in Africa. He listed high cost of aviaion fuel, poor management skills among airline managers and others.
He identified lack of infrastructure one factors militating against the industry in Nigeria.
Mrs Garbati identified fear among investors and refusal to obey international conventions as some of the factors.
She noted that some African countries were afraid that countries like Nigeria with its big population and potential would dominate them.
Mrs Garbati observed that this was responsible for the non-implementation of the Yamoussoukro Declaration of 1988 on Open Skies for Africa. The continental initiative, she said, was supposed to accelerate liberalisation of air transport on the continent .
She said though many countries had signed into the air pact, they were yet to implement it. She stated that Africa needed to wake up to its responsibilities to make aviation work.
Mrs Garbati noted that even Nigerian Customs Service at the gateways, including airports and seaports, were totally indifferent to clearance of airlines’ equipment and others.
Former Kenyan Airways Marketing Executive, Dorcas Aketch maintained that African airlines considered themselves competitors instead of partners.
She said if fear among operators was removed, it would help the industry to grow.
Mrs Aketch noted that there is the need for airlines to interline, adding that it would be better for domestic airlines to interline with foreign ones.
According to her, working as partners and not competitors will make the airlines grow.
Aligbe said infrastructural deficit at most airports could be addressed through concession and private-sector participation.
