Tag: African airlines

The chances of most African airlines making it big may be slim for sometime to come, The Nation has learnt.

According to sources, their inability to secure interline agreements with global airlines will continue to affect them because they do not have basic and enhanced international safety operational audit certification.

For such agreements to be consummated, bigger airlines either in Europe, Middle East and Asia  require cooperating airlines to have standard operational safety records guaranteed by airlines that have passed the International Air Transport Association (IATA) Operational Safety Audit (IOSA).

While there are three network alliances among global airlines – Skyteam, Star Alliance and One World Alliance – only Ethiopian Airlines, South African Airways and Egypt Air are members of the Star Alliance. No Nigerian carrier is in any of the alliances.

Besides, IATA expects carriers to enlist in its clearing house to enjoy partnership with others.

Investigations revealed that many carriers were yet to get into IATA clearing house because they have not passed the IOSA certification test.

At a meeting in Abuja in 2012, the African Union signed a declaration that carriers on the continent should pass the IOSA litmus test to enable them step up their operational and safety records.

Notwithstanding the declaration, only 11 airlines have joined since then. This brings to 31 the number of airlines from sub-Saharan Africa benefitting from the safety audit.

IATA Regional Manager, West Africa, Samson Fatokun, said the global body was working with African carriers to ensure that they were enlisted in the clearing house by the end of the year.

Although no Nigerian airline has been enlisted in the house, eight domestic airlines have since passed IOSA certification. They are Arik Air, Aero, First Nation Airways, Medview, Dana Air, Overland Airways, Allied Air and Air Peace.

Stakeholders in the industry say an airline that is a part of IATA clearing house stands to benefit. They list the benefits to include helping such an airline to have a steady operation and cashflow.

Fatokun said: ”It is a very good and big achievement. Getting it is one thing and staying there is another thing. It gives the airline opportunity to tell others that safety is important. It also gives people who want to do business with the airline to be assured that the level of safety required is there. Such certificate makes all know that the aircraft management and maintenance are safe. It gives the passengers more assurance and confidence.”

Last year, IATA and Nigeria pledged to collaborate in developing and rolling out a set of measures to enhance the African Union’s 2012 Abuja Declaration on Aviation Safety.

Experts described the Abuja Declaration as one of the most significant steps taken to boost safety and development on the continent.

Since the Abuja Declaration’s adoption, Africa’s safety performance has improved significantly.  Notwithstanding these gains, experts say when measured proportionally, the continent continues to have the world’s highest hull-loss rate per million flights.

“African safety is moving in the right direction thanks to the work done by a number of African nations including Nigeria, who have worked hard to raise awareness on the importance of implementing the Abuja Declaration,” IATA’s Regional Director, Safety and Flight Operations, Africa and Middle East, Tanja Grobotek, said.

African airlines need a viable business plan, a competent management and an enabling regulatory environment to succeed, the former Secretary-General of African Airlines Association ( AFRAA), Nick Fadugba, has said.

Fadugba spoke in an interview in Addis Ababa, Ethiopia.

He said airlines needed a large pool of aircraft and air traffic route networks to operate profitably, adding that the scale and size of an airline’s operations were important because many airlines failed in the past due to lack of control over their revenues and cost of operation

He said: “Running a successful airline is a very difficult  job. You need deep pockets, a viable business plan, a competent management and an enabling regulatory and economic environment to run a profitable airline anywhere in the world.

For airlines to survive and prosper,  they need a critical mass of aircraft and air traffic and an optimal route network,  he said, adding that a look at some local carriers showed that they have most of the ingredients to be effective and efficient.

“They have a sizeable number of aircraft  with a large route network and almost certainly a large revenue turnover. So the size and scale of an airline’s operations are important.  It is very hard to compete against bigger African and international airlines with just a handful of aircraft.

“I believe the message for Nigeria, especially if we take Ethiopia, Kenya, Egypt and South Africa as examples, is that airlines need a reasonably large fleet to be able to compete effectively. On the other hand, all airlines must start somewhere. Smaller airlines can succeed if they keep very tight control of their revenues and costs, or focus on  niche markets.”

He said many Nigerian carriers were struggling to survive because they are competing on the same routes, stressing that such a development would make it herculean for them to operate profitably.

He said he would like to see a situation in which airlines in Nigeria enter into mutually beneficial partnership and joint ventures with others, saying it would make them more efficient and profitable.

He called on the Airline Operators of Nigeria (AON) to champion the cause of partnership, noting that all the domestic airlines in the country are owned by shrewd business people who, in addition to wishing to provide safe and efficient air services,also want to make a decent and significant return on their investment.

“Combining forces could help achieve these two objectives. I would like the airline owners, at least, those that are willing, to sit in a room, lock the door, and ask themselves: ‘How can we work together?’

‘’If two or three, or more Nigerian airlines joined forces they would have a larger fleet size and combined resources and would become more bankable and more formidable.

“Sincerely Nigeria has all the ingredients for a successful airline industry but many of the players are too small, weak and undercapitalised to take advantage of the market opportunities.

‘’I believe our airlines need to achieve a critical mass so as to benefit from economies of scale. I believe Nigerian airlines should come together and work together for the common good, no matter how difficult this may seem in the early stages.In the past, I have heard some airlines in Nigeria say that it would be difficult for them to work together, as they have different owners and philosophies, and they are competitors. I agree that at the moment it would be too optimistic to envisage equity swaps among the airlines,” he said.

He also observed that several airlines in Nigeria operate the same aircraft and engines and advised them to form aircraft spare parts pools and engine pools so that they could achieve significant cost savings as well as greater operational efficiency. “The same approach could be applied to in-flight catering, reducing costs through joint purchasing. Of course, each airline would have to ensure that it meets its payment obligations on time, otherwise such schemes would rapidly fail. Through such cost-saving arrangements, Nigerian airlines could maintain their individual identities, whilst working closely together.

“Even when it comes to negotiating with aircraft and engine leasing companies, airlines planning to acquire similar equipment could work together to obtain better pricing. Two or three airlines negotiating together for a larger pool of aircraft are likely to obtain a better lease rate than one airline negotiating on its own for one or two aircraft,” he said.