The Nation Newspaper

Tag: Airlines

  • Airlines record huge passenger traffic

    Domestic airlines yesterday recorded huge passenger traffic at both the new and old terminals of the Lagos Airport ahead of the Eid-El-Kabir celebrations.

    The large turnout of passengers occasioned upward review of air fares by some airlines on some routes.

    The influx of travellers was due to the two-day holiday (Monday and Tuesday next week) declared by the Federal Government to mark the celebrations.

    Intending passengers were seen struggling to get seats on the few available flights to their various destinations across the country.

    An air ticket from Lagos to Kano, which used to sell for between N22,500 and N27,000, rose to about N37,000.

    Flights from Lagos to Abuja, which normally cost between N15,000 and N26,000, depending on the airline and the time of flight, had their tickets sold for N30,000 or more.

    Most of the flights that witnessed increased fares were headed for the northern part of the country.

    The Aero Contractor Airlines check-in counter witnessed the longest queue of passengers at the MMA2, while the Arik Airline witnessed same at the General Aviation Terminal One (GAT1).

    A passenger, Mrs Fatimoh Lawal, who was travelling to Abuja with her children,  said she had purchased a ticket for the flight from Lagos the previous week, but got to the airport a few minutes after the first boarding call but was denied access to the plane on the excuse that she was late.

    “I was surprised to get here only to learn that I was late. My flight was scheduled for 12.30 p.m., and I got here at 12.10 p.m. because of traffic, but the airline’s officials didn’t check me in. They said I was very late.

    “I had to run around to raise extra money to pay in order to be able to go with the next available flight. I think it is rather unfair, because I should still have been allowed to get on the plane,’’ she lamented.

    The Federal Airports Authority of Nigeria (FAAN) advised air passengers across the country willing to travel for the holiday to get to the airport on time to avoid last-minute rush.

  • Delta Airlines to fly to San Antonio, Dallas

    Delta Air Lines will launch twice-daily non-stop service from Los Angeles to San Antonio, Texas, from April 7, next year.

    The San Antonio service complements Delta’s daily service from Los Angeles to Dallas, which launches November 3, 2015 and the addition of a third daily flight between Los Angeles and Austin, Texas, beginning November 2,  2015.

    All flights are operated by Delta Connection carrier Compass Airlines.

    With the addition of San Antonio and Dallas service, Delta customers will have access to nine daily departures to three destinations between Los Angeles and Texas.

    For Texas customers, the new service also will provide more options when connecting to destinations in Delta’s trans-Pacific portfolio from Los Angeles. This includes service to Tokyo-Haneda; Tokyo-Narita and Sydney, as well as partner-operated service to Brisbane, Australia; Guangzhou, China; Shanghai; and Taipei.

    “For more than a year, we have grown our Los Angeles network into one of the largest operations at LAX and given our customers — particularly those in the entertainment, production, automotive and growing tech startup communities — nonstop options to destinations throughout the US,” said Ranjan Goswami, Delta’s staff vice president, Global Sales, West Region. “The addition of Dallas and San Antonio marks the next big intra-West milestone for Los Angeles as we continue building this key market and West Coast network for our customers.”

  • How to keep airlines afloat, by experts

    How to keep airlines afloat, by experts

    Many domestic airlines are going through hard times, owing salaries for months, among other problems. If not addressed, this ugly trend, experts warn, could have ripple effects on safety. KELVIN OSA-OKUNBOR reports.

    THAT these are difficult times for  domestic carriers, is an understatement. Many of them are on the throes of death. Even paying salaries regularly, is a challenge.

    Apart from this, they are indebted aviation services’providers and terminal operators, as well as fuel and catering  suppliers.

    Unpaid and delayed salaries have become major feature among airlines, raising concerns on the implication of this on air safety.

    The real issue is that most of the airlines are unable to recover operating costs.

    This has been attributed to high cost of aircraft maintenance, insurance, fuel, landing and parking fees, among others.

    Some experts have projected that  soon, some domestic operators may close shop over the huge indebtednes.

    The Nigerian Civil Aviation Authority (NCAA), it was learnt, was having a parley with the affected operatorss.

    The operators have declined comments on the matter.

    Experts, including former chairman of Airline Operators of Nigeria (AON), Dr  Steve Manhonwu; a former director of engineering Nigeria Airways Limited, Godwin Jibodu, and an aircraft engineer,  Alex Anene,  have described the situation as frightening.

    They adduced poor planning, failure to carry out feasibility studies, wrong use of aircraft as part of the reasons   airlines’revenue are dwindling.

    They said failure by some operators to carry out detailed studies before embarking on the business accounted for their inability to pay salaries.

    Domestic operators include: Arik Air, First Nation Airways, Dana Air, AZMAN Air, Medview Airlines, Overland Airways, Discovery Air, Air Peace, Topbrass Aviation and  Aero Airlines.

    Operators that have suspended operations include: Chanchangi Airlines, IRS Airlines and Afrijet Airlines.

    Staff of some of these carriers last years protested to the Nigeria Civil Aviation Authority ( NCAA) the  failure of their management to clear the arrears of salaries.

    Worried over this trend, NCAA has warned operators to fulfil their obligation to their staff.

    The authority said it would continue to carry out financial audit of airlines to ascertain their operational health, safety, security and above all economic viability.

    The authority said it would be forced to shut the operations of the affected carriers.

    Its acting director general, Engineer Benedict Adeyileka said the authority is constrained to take this step to save the industry a lot of damage.

    The Nigerian Civil Aviation Authority (NCAA)  last week warned domestic operators defaulting in the payment of salaries.

    This was a fallout of a meeting with operators alleged to be culpable.

    At the meeting, Adeyileka expressed serious concern over the non – payment of salaries.

    He said the development was detrimental to the growth the industry.

    According to the him, the action became necessary when consistently the financial health reports from the airlines were indicating gaps in financial stability.

    He said: “As far as the NCAA is concerned, the issue of non-payment of  salaries is critical to safety.

    “The moment an airline cannot meet its financial obligations, it is believed that the staff morale will be down and this can impact negatively on safety and security of its operations.

    “The  NCAA will not condone a situation where their staff will disrupt operations which will affect the travel plans of passengers who have purchased their tickets.”

    Consequently, NCAA has written a warning letter to the affected airlines, informing them that non-payment of  salaries was unacceptable.

    NCAA warned airlines that if the act persisted, it would sanction them, one of which may result in suspension of Air Operators Certificate (AOC).

    Last year, three airlines suspended  operations due to their inability to pay  salaries. In fact, NCAA is insisting that until all the arrears of salaries are paid these airlines will not be cleared for further operations.

    It said: “The Nigerian Civil Aviation Authority (NCAA) therefore wishes to reiterate that it will continue carrying out financial health audit of airlines to ensure that our airline operations are healthy, safe and secure.”

    Also Jibodu said: “I have said this many times that the problem of owing workers salary may linger for some time because many operators embark on airline business without carrying out detailed studies on the viability and otherwise of the business.

    “Such operators did not examine the market deeply. They did not carry out feasibility studies and operating costs.

    ‘’Such operators never factored into their plan the cost of aircraft spares, aviation fuel, catering, aeronautical charges to be paid to service providers, aircraft insurance and workers salaries.

    “They  just plunge into the business, convinced that the revenue from ticket sales is good profit without considering other operating costs.

    ‘’Some of them also make the make the mistake of buying the wrong aircraft type that is not suitable for their their operations.

    He continued: “An aircraft that is relatively old would require huge amount of money for spares and maintenance;  all these eat up into the cost of operations, thereby narrowing profit margins.

    ‘’With this kind of scenario, it would be difficult to run profitable and pay  salaries.

    “Some operators also make the mistake of employing too many staff, opening up many offices and flying on unviable routes with an aircraft type that would consume all the expected revenue owing to cost of aviation fuel and maintenance .

    ‘’It this poor planning that makes airline business unprofitable, resulting in inability to pay salaries.

    “Most of them fail to carry out adequate feasibility on the business.

    ‘’Many of them buy any kind of aircraft, and would not match it with the suitability of the operations.

    ‘’The maintainability of the aircraft should be given serious consideration by any operator before buying the aircraft.

    ‘’Often times , the cost of aircraft is very critical.

    ‘’Most of them embark on unviable operations.

    “The second challenge Is the challenge of offshore maintenance of aircraft?

    ‘’The whole money earned in a year is put into major aircraft maintenance checks.

    ‘’That is why many airlines that took their aircraft for major checks are seized  abroad ,because the operators could not pay for the checks.”

    Also, Manhonwu said: ”The problem of salaries should be addressed airline by airline. It is a serious problem that should be addressed, even the so called big airlines are owing salaries.

    ‘’This is not good for the safety of airline operations.

    ‘’The NCAA should step up its oversight and ensure that airlines are solvent to keep their operations safe.

    ‘’Even, if an airline is having problems, its managers should look for a way around the issue of owing salaries.”

    Anene  added: ”I lost my job as the chief engineer of a domestic airline because I offered advice on the quality of aircraft the airline should buy to run a profitable operation.

    ‘’Most airlines do not do their home work. That is why many of them cannot pay staff salaries. You cannot do aviation without money.”

  • How to keep airlines afloat, by experts

    Many domestic airlines are going through hard times,  owing salaries for months, among other problems. If not addressed, this ugly trend, experts warn, could have ripple effects on safety. KELVIN OSA-OKUNBOR reports.

    THAT these are difficult times for  domestic carriers, is an understatement. Many of them are on the throes of death. Even paying salaries regularly, is a challenge.

    Apart from this, they are indebted aviation services’providers and terminal operators, as well as fuel and catering  suppliers.

    Unpaid and delayed salaries have become major feature among airlines, raising concerns on the implication of this on air safety.

    The real issue is that most of the airlines are unable to recover operating costs.

    This has been attributed to high cost of aircraft maintenance, insurance, fuel, landing and parking fees, among others.

    Some experts have projected that  soon, some domestic operators may close shop over the huge indebtednes.

    The Nigerian Civil Aviation Authority (NCAA), it was learnt, was having a parley with the affected operatorss.

    The operators have declined comments on the matter.

    Experts, including former chairman of Airline Operators of Nigeria (AON), Dr  Steve Manhonwu; a former director of engineering Nigeria Airways Limited, Godwin Jibodu, and an aircraft engineer,  Alex Anene,  have described the situation as frightening.

    They adduced poor planning, failure to carry out feasibility studies, wrong use of aircraft as part of the reasons   airlines’revenue are dwindling.

    They said failure by some operators to carry out detailed studies before embarking on the business accounted for their inability to pay salaries.

    Domestic operators include: Arik Air, First Nation Airways, Dana Air, AZMAN Air, Medview Airlines, Overland Airways, Discovery Air, Air Peace, Topbrass Aviation and  Aero Airlines.

    Operators that have suspended operations include: Chanchangi Airlines, IRS Airlines and Afrijet Airlines.

    Staff of some of these carriers last years protested to the Nigeria Civil Aviation Authority ( NCAA) the  failure of their management to clear the arrears of salaries.

    Worried over this trend, NCAA has warned operators to fulfil their obligation to their staff.

    The authority said it would continue to carry out financial audit of airlines to ascertain their operational health, safety, security and above all economic viability.

    The authority said it would be forced to shut the operations of the affected carriers.

    Its acting director general, Engineer Benedict Adeyileka said the authority is constrained to take this step to save the industry a lot of damage.

    The Nigerian Civil Aviation Authority (NCAA)  last week warned domestic operators defaulting in the payment of salaries.

    This was a fallout of a meeting with operators alleged to be culpable.

    At the meeting, Adeyileka expressed serious concern over the non – payment of salaries.

    He said the development was detrimental to the growth the industry.

    According to the him, the action became necessary when consistently the financial health reports from the airlines were indicating gaps in financial stability.

    He said: “As far as the NCAA is concerned, the issue of non-payment of  salaries is critical to safety.

    “The moment an airline cannot meet its financial obligations, it is believed that the staff morale will be down and this can impact negatively on safety and security of its operations.

    “The  NCAA will not condone a situation where their staff will disrupt operations which will affect the travel plans of passengers who have purchased their tickets.”

    Consequently, NCAA has written a warning letter to the affected airlines, informing them that non-payment of  salaries was unacceptable.

    NCAA warned airlines that if the act persisted, it would sanction them, one of which may result in suspension of Air Operators Certificate (AOC).

    Last year, three airlines suspended  operations due to their inability to pay  salaries. In fact, NCAA is insisting that until all the arrears of salaries are paid these airlines will not be cleared for further operations.

    It said: “The Nigerian Civil Aviation Authority (NCAA) therefore wishes to reiterate that it will continue carrying out financial health audit of airlines to ensure that our airline operations are healthy, safe and secure.”

    Also Jibodu said: “I have said this many times that the problem of owing workers salary may linger for some time because many operators embark on airline business without carrying out detailed studies on the viability and otherwise of the business.

    “Such operators did not examine the market deeply. They did not carry out feasibility studies and operating costs.

    ‘’Such operators never factored into their plan the cost of aircraft spares, aviation fuel, catering, aeronautical charges to be paid to service providers, aircraft insurance and workers salaries.

    “They  just plunge into the business, convinced that the revenue from ticket sales is good profit without considering other operating costs.

    ‘’Some of them also make the make the mistake of buying the wrong aircraft type that is not suitable for their their operations.

    He continued: “An aircraft that is relatively old would require huge amount of money for spares and maintenance;  all these eat up into the cost of operations, thereby narrowing profit margins.

    ‘’With this kind of scenario, it would be difficult to run profitable and pay  salaries.

    “Some operators also make the mistake of employing too many staff, opening up many offices and flying on unviable routes with an aircraft type that would consume all the expected revenue owing to cost of aviation fuel and maintenance .

    ‘’It this poor planning that makes airline business unprofitable, resulting in inability to pay salaries.

    “Most of them fail to carry out adequate feasibility on the business.

    ‘’Many of them buy any kind of aircraft, and would not match it with the suitability of the operations.

    ‘’The maintainability of the aircraft should be given serious consideration by any operator before buying the aircraft.

    ‘’Often times , the cost of aircraft is very critical.

    ‘’Most of them embark on unviable operations.

    “The second challenge Is the challenge of offshore maintenance of aircraft?

    ‘’The whole money earned in a year is put into major aircraft maintenance checks.

    ‘’That is why many airlines that took their aircraft for major checks are seized  abroad ,because the operators could not pay for the checks.”

    Also, Manhonwu said: ”The problem of salaries should be addressed airline by airline. It is a serious problem that should be addressed, even the so called big airlines are owing salaries.

    ‘’This is not good for the safety of airline operations.

    ‘’The NCAA should step up its oversight and ensure that airlines are solvent to keep their operations safe.

    ‘’Even, if an airline is having problems, its managers should look for a way around the issue of owing salaries.”

    Anene  added: ”I lost my job as the chief engineer of a domestic airline because I offered advice on the quality of aircraft the airline should buy to run a profitable operation.

    ‘’Most airlines do not do their home work. That is why many of them cannot pay staff salaries. You cannot do aviation without money.”

  • ‘Airlines run down competitors’

    ‘Airlines run down competitors’

    Chairman/Chief Executive Officer of Air Peace Limited, Allen Onyema, believes banks should lower interest rates for airlines. He spoke to KELVIN OSA OKUNBOR, explaining his interest in running an airline, a hugely capital-intensive business, which many have fled from.

    Commercial banks should lower their interest rates to single digits to enable indigenous aviation firms to access more funds to buy aircraft and run airlines.

    This, according to the Chairman and Chief Executive Officer of Air Peace, Allen Onyema, is how indigenous aviation firms can grow.

    Onyema said the reduction has become imperative because airlines require more time to repay their loans, because of low returns on investment .

    He urged the Central Bank of Nigeria (CBN) to put commercial banks in a strong position to finance high capital intensive airline projects.

    Speaking  in Lagos at the weekend  on plans by the carrier to begin operations, Onyema said Air Peace is patterned  along the model of South West Airlines in the United States.

    He  accused the Federal Airports Authority of Nigeria ( FAAN ) of with holding land to intending airlines interested in building aircraft maintenance hangar in some airports nationwide.

    Onyeama said, rather  than allocate land to serious operators, FAAN has been allocating land to people who are not ready to develop them for aviation development .

    He said: ”The new minister should direct FAAN to allocate  land to committed investors in the aviation sector to enable them set up aircraft maintenance facility. That will assist the development of the sector.

    “If FAAN is skeptical about our capacity to utilise the land, they should ask for our feasibility and bankable evidence on how we intend to develop the facility. We have banks that can finance the projects .

    “The new minister should talk to FAAN to release land and we are ready to give evidence of finance. I do not think it is good for airlines to be carrying out aircraft maintenance at the ramp. It is not enough. Even the Air Force facility is not enough. There are airlines that want to have their own hangar.”

    The airline, he said, would run a ‘ lean ‘ operation to remain profitable.

    He denied insinuations on the ownership of Air Peace.

    Onyema said: ” These insinuations are unfounded. Neither President Goodluck Jonathan or members of his cabinet or my friend,  Kingsley Kuku, has anything to do with the funding of Air Peace. The insinuation in the public domain is unfortunate and misleading. It is being peddled by people who either have political scores  to settle or operators who are afraid of our entrance into the aviation sector .

    “ I get very angry when people throw up such insinuations that even Mr Timi Alaibe or anybody they know is my friend that is in or was in government is giving me funds to run an airline.

    “They even throw up names I have never met before. They even mentioned the name of the President’s wife, Mrs Patience  Jonathan .

    “I have never met her . I have also never met President Jonathan in person.  I am very sure people doing all these are doing it for political undertones . I am sure too that some competitors are scared of Air Peace, so they could do anything to bring me down .

    “We are prepared for those who are poised to malign our reputation in print or any permanent form. Very soon, they will make my  day in court.”

    He said Air Peace has taken delivery of five aircraft, as part of efforts to acquire the Air Operators Certificate( AOC) from the Nigerian Civil Aviation Authority (NCAA).

    Onyema said soon Air Peace would take delivery of additional two aircraft to bring its fleet to seven to enable it serve both primary  and secondary airports.

    He urged the Federal Government to install air field lighting facilities at all airports to ensure 24- hours operations.

    The Air Peace boss said his company has trained over 40 pilots, who were sent to the CAE Academy in the United Kingdom for further training to enhance their flight proficiency .

    He said the aviation industry needs more investment and canvassed cooperation among domestic carriers to make them stronger and more competitive .

    Onyema said Air Peace would sign interline and codeshare agreements with competent carriers to give passengers the best.

    He said many domestic carriers have failed because the owners lack sound business practices and integrity, affirming that commercial banks would only be comfortable giving money to business people who they do could trust.

    He said previous attempts by government to package intervention for domestic carriers have been abused, as the funds were misapplied .

    On the problem of aviation fuel, Onyema said many independent fuel markets were reluctant to sell fuel to domestic operators because of indebtedness.

    He canvassed the cash-based transaction model for purchase of aviation fuel, such that the marketers would not run info cash flow problems.

    He said rather than pulling down one another local carriers should forge a common front to attract more people to travel by air.

    He said there are not enough airlines in Nigeria to cater for the over 170 million people, out of which a paltry five per cent travel by air .

    He urged Minister of Aviation Osita Chidoka to consult widely with airline operators and other stakeholders on the fundamental areas requiring attention.

    He said if Chidoka does not consult widely, he may not be able to address the myriad of challenges affecting the sector .

    Onyema said Air Peace would continue to invest in indigenous professionals, including pilots and aircraft engineers, who if well motivated could outshine their counterparts from any part of the world.

    On high operating charges by aviation authorities , Onyema said:” Government and the people of Nigeria should start asking questions: why do Nigerian airlines go extinct? Airlines go into extinction very easily in Nigeria. And there are so many factors. Above all, the current administration should be commended for giving the airports a facelift .

    “Credit must also go to government for the waiver on import duties and charges  it  granted domestic airlines for their aircraft and spare parts .

    “That has assisted airlines to save huge sums of money,that would now be deployed into maintenance of their aircraft.

    “But, a lot more could be done by government to assist domestic operators .

    “Government should not only support start up airlines, but the existing carriers because airport and air navigation charges are too many. Five per cent to this agency five per cent to the other. The bulk of the revenue accruing from ticket sales goes back to aviation agencies as payment for charges.

    “Under this kind of arrangement, no airline can break even, let alone run profitably or recover their operating costs. If the airlines cannot recover their costs, that means they are incurring losses and ultimately they close shop. The negative of an airline closing up is that there will be job losers, which gives rise to insecurity.

    “I am calling on President Goodluck Jonathan to direct aviation agencies to reduce airport and other air navigation charges for domestic carriers to enable them keep their business afloat .

    “The current administration has done well for aviation, but government should remove the double and high airport charges that have become prohibitive.

    “If an airline is paying out over ten to fifteen per cent of its revenue as airport charges, where will the operator get money for aircraft insurance and maintenance , aviation fuel and other issues it must attend to? Where will the airline now get money to pay its overhead costs? So, the prohibitive charges should be far away, they belong to the past.”

    Onyema bemoaned negative practices in the  industry where operators engage in de- marketing to pull down would be competitors.

    He said :” I have discovered that there is so much enmity among operators in the airline industry . There is a lot of devilish competition  among airlines. A lot of people are scared when they see a new entrant coming into the sector. That should not be  the case. The more airlines we have the better it is to serve the entire industry .

    “Imagine Nigeria, a country of over 170 million people, should have as many airlines as possible. Less than five per cent of this population travel by air.

    “This is not good enough, because the awareness has not being created . With more airlines on board, if the competition is healthy , we should encourage more people to fly so that everybody have a hand on the pie.

    “What airlines are doing now is trying to cut corners , running competitors down and other forms of de -marketing , and engaging in pulling down syndrome is devilish. It does not help any operator, because what comes round goes round.

    “ In Air Peace, what we want to bring to the industry is peace and love. We started that already . I have always been excited anytime  I see a new operator coming on stream.

    “I was happy and congratulated AZMAN Air, when they started operations , even Discovery Air, I was happy when they started . I am not happy to see any airline go down. We need to support one another . Air Peace is open for partnership, for any constructive advice that would help the airline to do well.

    “ Domestic airlines should cooperate , nothing wrong in doing codeshare, cooperate with one another. That is the way to go.

    “If your airplane has a problem, you can ask another airline to help fly your passengers. The bane of airline growth in Nigeria is the devilish competition among operators .”

    Speaking further on how banks could assist domestic, operators, Onyema said :” If airlines are properly run, they could become money spinning businesses , and the banks would be in a good position to gain from that through huge cash inflow that would be generated .

    “The truth of the matter is that integrity is in short supply in Nigerian business environment. That is the main reason why many Nigerian banks are skeptical  to give out money to fund aviation projects, because they see it as turbulent .

    “The banks should look inwards and see how they could protect themselves . In the case of my airline, I sign off my planes as collateral with others collateral as guarantee if I am unable to pay back the money I took from the bank.

    “Before any bank could give money to any airline airline operator, he has to look at the background of the person deeply .

    “Where is he coming from? Can we trust him?  The banks that gave Air Peace considered all these seriously. The bank gave me a moratorium . The banks can extend this to other airlines to restore confidence. The problem with Nigerian airline operators is they borrow money and run away . They divert the money .

    “Banks should come in to assist Nigerian airline operators, after they have carefully studied them that they have integrity to pay back the money given. Assurance that the money would not be diverted into any other venture is very important. The banks should lower their interest rates. At the same time, we also have to consider rate at which the banks are getting their deposit.

    “In this respect, the Central Bank of Nigeria has a role to play . This implies that the Central Bank of Nigeria must lower their with holding deposit with the commercial banks to enable them achieve the interest rate to benefitting airlines.”

    On the module to be used by the airline , he said: ” We are bringing a whole world of difference with Air Peace . One of the driving modules for Air Peace will be safety . This is a key ingredient fir running a successful airline anywhere in the world.

    “One of the motivating factors that pushed me into investing in aviation in Nigeria is to change the face of air travel , with priority on safety, which has become imperative in view of the spate of air crashes that occurred many years ago .

    “Going further, we are going to model Air Peace after the operational model used by South West Airlines in the United States. We want to do something unique in air travel . We want to fly from Warri to Port Harcourt ,  from Abuja to the smaller airports . We are using very strong Boeing jets , to see flight from Benin to Port Hsrcourt, Kebbi to Abuja . The whole idea is to bring peace to the country . In Air Peace  , we are not driven by profit, but to create jobs for Nigerians by ensuring qualified indigenous professionals are engaged .

    “That is what we want to do.  Air Peace wants to open up the entire country’s air link by going beyond the traditional point of flying from Lagos to Abuja, Port   Harcourt and a few other routes.

    “We want to have a good operations that would be profitable, we would not cut corners, we would get it right, we do not want to cut lives. We intend to run an airline that passengers would feel safe and secured and have peace. We intend to run a ‘ lean ‘ operation that would be profitable .

    “South West Airlines in America that we are copying their model is very profitable . We are planning to bring in a new style of doing the business.

    “We hear that aviation business is very turbulent , but with a lean operation, we would survive  and open up the entire country to bring in peace and link up all the airports.”

  • ‘ Multiple entry point for foreign airlines stifles local carriers’ growth’

    ‘ Multiple entry point for foreign airlines stifles local carriers’ growth’

    The deputy managing director and head of flight operations,  Arik Air , Captain Ado Sanusi has accused the Federal Government of undermining the growth of indigenous carriers through its policy of granting multiple entry points to foreign carriers into the country.

    Besides, granting such rights, he said government must ensure there is reciprocity in the bilateral air services agreements signed between Nigeria and the countries of the foreign carriers  to bridge the current lopsidedness that exists.

    Sanusi said government must consider ways and assisting local airlines to boost their operational capacity to enable them compete with foreign carriers, by barring carriers from countries that are frustrating efforts by Nigerian carriers in getting traffic rights into their countries.

    He canvassed an airport slot allocation system that would give Nigerian carriers priority during check in and boarding , as is the practice in other countries.

    He accused aviation ministry officials of alleged corruption in facilitating the approval of extra flight frequency to foreign carriers at the detriment of Nigerian airlines.

    He said the alleged practices of such officials have contributed immensely to the invasion of the Nigerian market by foreign carriers .

    Sanusi said many African countries and others  have been conspiring against Nigerian carriers in their quest to get approval to operate into many countries.

    He listed countries that have frustrated  efforts of Arik Air to secure approval to fly into their country to include: Brazil, Egypt, Ethiopia, Togo and the United Arab Emirates,

    He said what is lamentable, is the impunity with which Nigerian government grants unrestricted frequencies to many foreign carriers without any consideration for reciprocity by the benefiting countries to Nigerian carriers.

    Sanusi said many African countries, including Togo, Ethiopia and Egypt, which ought to pursue the liberalization of air transport in the continent in line with the principle of Yamoussoukro Decision of 1999 have continued to frustrate efforts by Arik Air to secure approval for flights into their country.

    He said many foreign carriers were taking for granted the generosity of Nigerian government, which would offer anything to other countries at the detriment of her airlines.

    Sanusi said the categorisation of  Nigerian carriers as weak by some experts, who have perception imbalance about the carriers is doing incalculable damage to the reputation of the carriers in the international investor community .

    He said many international finance agencies would be discouraged to access funds to Nigerian carriers because of the way, they have been so labeled by industry experts.

    He said: ‘It is not unusual for foreign carriers to tell you that coming to Nigeria is a matter of who you know and who you can ‘see’. You will be surprised to know that some of the so called negotiations involve a price tag of $1 to $2 per passenger, per flight commission demanded by the negotiator.

    “Consequently, there are several agents who scout for frequencies for foreign airlines in Nigeria and foreign airlines do pay them these commissions. Suffice it to say that top government officials might be unaware of this but there are other government officials who give one reason or the other of Nigerian airlines being weak, being incompetent and Nigerians want to travel but Nigerian airlines cannot airlift them to international destinations.

    “These are the reasons these officials give to justify what they do and for their applications for multi frequencies from foreign airlines to be approved. Some of them even go to Aso Rock and give false information about Nigerian airlines. On the other hand, when Nigerian airlines go to other countries and request for entry approval, these requests are never replied. For example, Arik Air has written to the embassy of Brazil, Ethiopia, Togo, Egypt, to mention a few; in most cases we never got any response. In some other cases we were given unending list and when we satisfy that we were given fresh list.

    “One would have thought that since we have bilateral air service, including Yamoussoukro Decision by African states aimed at liberalizing air services in the continent, and other agreements reached in ECOWAS, it would be easy for Nigerian airlines to have easy entry to some West African countries, for example, Togo where Asky is based.

    “But Nigerians are too happy to give Asky all the frequencies it asked for and in fact, even feel alright that Nigerian airlines are denied entry to that country. It is high time the Nigerian government took a second look at this situation and responds appropriately. Our generosity and spirit of brotherhood should not be taken for granted and no nation will do what Nigeria is doing to her airlines. We wish to state categorically that Nigerian airlines have the capacity and know-how to compete with foreign airlines only if the government, the civil servants will allow the issue of multiple entries to Nigeria to be reciprocated to foreign countries.”

    Nigerian carriers, Sanusi said have the capacity to compete with other players in the global arena, if government could have a rethink on its offer of multiple entry points to foreign  carriers  and insist that there must be reciprocity to Nigerian operators on the routes that such foreign carriers have been rewarded.

    He said other areas government could assist indigenous operators is to grant them waiver on payment of landing and parking fees for their aircraft, as is the practice in other countries.

    He said the levies and charges on indigenous carriers are too weighty , describing it as the highest in the world.

    Sanusi said the utilisation factor on Nigerian aircraft   is too low, because of restriction on operations at some airports, which only carry our day light operations.

    Such daylight operations, he said are occasioned by absence of air field lighting systems at the airports, which he said should immediately be installed at airports nationwide, as is the practice in other West African and other countries.

    He accused of many Nigerian banks of not supporting indigenous carriers, due to the huge capital outlay required to acquire aircraft.He said: ”Nigerian carriers are not weak, labeling them as weak would only serve as a stumbling block to access funds from multilateral   and financial institutions abroad.”

    He however appealed to government to assist in securing landing slot at the London Heathrow Airport for its Abuja operations, saying that securing seven landing slots in London would reduce air fare charged by foreign carriers on the London Abuja route.

    He said: ”Nigerian airlines and the industry cannot grow without the support of government, even if is a national carrier.”

    National carrier will not do more than what the existing domestic operators are doing. Government would be assisting the industry by stepping up its responsibility by reviewing the multiple entry point, which does not factor in the principle of reciprocity for Nigerian carriers.

    Granting multiple entry point for foreign carriers into Nigeria is counter productive.”

    He also canvassed the setting up of an aircraft maintenance repair facility in Nigeria, which he said would create jobs for Nigerians and earn foreign exchange.

     

     

  • How airlines can become profitable, by experts

    How airlines can become profitable, by experts

    In an industry with airlines’ lifepan less than 10 years, experts are worried about the options for survival and profit. To them, regulatory requirement, licensing structure and creation of a clearing house could foster the merger and consolidation of weak carriers. Aviation Correspondent KELVIN OSA-OKUNBOR reports.

    he high mortality rate of  domestic airlines in Nigeria is generating concerns among experts and operators.

    Experts are worried that if nothing is done to address what they describe as the “ bust and boom cycle’’,  more airlines may  collapse.

    The average life span of domestic carriers is less than 10 years, owing largely to unsound business plan, managerial incompetence, wrong use of airplanes and inability of operators to come together under an arrangement that could bring about the merger and consolidation of airlines.

    Over 22 carriers have collapsed in the last two decades.

    They include: Albarka Air Services,  Okada Air, EAS/ NICON Airways,  Nigeria Airways Limited, Freedom Air Services, Oriental Air Services, Concord Air, DASAB Airlines, Space World International Airlines, Capital Airlines, Sosoliso Airlines, ADC Airlines, Savannah Air, Skyline Airlines,  Slok Air, Air MidWest, Afrijet, Falcon Air Services, Harka Air, Bellview Airlines, Virgin/Air Nigeria and Fresh Air.

    About seven airlines are carrying out scheduled operations. They are: Arik Air, Aero Airlines, DANA Air, Medview Airlines , Overland Airways, Discovery Air, AZMAN Air, Air Peace, Hak Air, First Nation Airways and Topbrass Aviation.

    IRS Airlines and Chanchangi Airlines are not operating scheduled operations because of unavailability of at least two aircraft as prescribed by the Nigerian Civil Aviation Authority (NCAA).

    According to experts, the collapse of airlines can be attributed to some factors which include insufficient  capitalisation,  incompetent management, wrong business model, the use of wrong airplanes and lack of regulatory template to force mergers and consolidation.

    In 2006, the Federal Government introduced new legislation that set the minimum capital requirements for airlines as part of restructuring aimed at boosting safety.

    Under the legislation, domestic operators are to be capitalised with a minimum of N500 million while that of carriers operating in Africa  N1 billion.

    This is expected to increase to N2 billion for carriers with services outside the continent.

    The former Manager Director of Nigeria Airways Limited, Mr Andrew Okuyiga, has canvassed the merger or consolidation of airlines as one of the strategies to ensure profitability.

    He said the issuance of air operators’ certificate to airlines with two aircraft was not good, adding that it would not boost their profitability.

    He said a policy, which prescribes the minimum number of aircraft an airline should have before it could be considered a serious player in the air transport sector, should be put in place.

    He argued that with a low capital base, two aircraft, an operator would not recover his operating costs  at a time cheaper fares are dominating the market.

    According to Okuyiga, until NCAA puts a policy in place that  would force domestic airlines to merge through increased capitalisation, minimum number of aircraft and a pool of expertise, the local air transport sector would continue to struggle for survival.

    Also, the President, Sabre Travel Network West Africa, Mr Gbenga Olowo, said until the domestic carriers merge, they would not be able to compete with foreign carriers.

    Experts said domestic airlines would continue to face difficulties while competing with their West African counterparts because of lack of cooperation.

    Due to lack of understanding of the business, many domestic airlines do not fill their aircraft with passengers. This trend has led their inability to recover their operating costs.

    Experts said merger is the way to go if aviation industry must grow.

    Olowo urged the NCAA to direct domestic airlines to cooperate  through merging of their operations.

    He said it was time NCAA perfected the setting up of a clearing house, which would provide a seamless platform for airlines to pursue merger or consolidation.

    Olowo pointed out that it is the responsibility of the regulatory agency to ensure that the airline sub-sector survives.

    He said for domestic airlines to survive in the economy, NCAA must make regulation that would compel airlines to merge, adding that Europe and America that introduced stiff competition in the past have embraced merger and consolidation, wondering why the carriers still feels that they could do it alone with two aircraft in their fleet.

    He explained that an aircraft is meant to fly between 2,000 and 3,000 hours yearly for the operator to break even, warning that if they allow their aircraft to be on ground for a long time, it would be impossible for them make profit.

    He said: “The regulator should merge the airlines if we are to enjoy the benefits of aviation growth in the sector. The West that brought intense competition is talking about merger, consolidation and others. Can’t our own airlines merge?

    “If our airlines are unreliable, how can they partner with foreign carriers? NCAA must sit down seriously by looking at the economies of the operators. NCAA should be able to mid-wife our airlines that are coming up. Nigerian airlines should be in the International Air Transport Association, IATA, and it is the responsibility of NCAA to do this.”

    However, some experts, such as Chris Aligbe, Sheri Kyari and Francis Ayigbe, believe that there is room for more carriers if the would-be investors use the right aircraft model in their operations.

    They canvassed the owner/investor model as the best for the business, arguing that the owner/manager model as is the case with many airlines was responsible for the high rate of failure of domestic carriers.

    They said many airlines failed because the managers lack the knowledge and technical skills to keep their operations afloat.

    According to them, an owner/investor is one who has the technical knowledge of the industry and sufficient funds to invest in the business, while an owner/manager doesn’t have technical knowledge of the industry, but has funds to invest.

    Aligbe, the Chief Executive Officer of BeluJane Konzults, said the recipe for running a profitable carrier is using the right operational model and equipment.

    He said Nigeria could only deliver profitable carriers if the operators were ready to imbibe the culture of investor/manager, which would bring about inclusion of technical expertise in the running of the airline as opposed to undue interference by the owner/manager.

    Aligbe said the greatest problem of domestic airlines is the owner/manager syndrome, adding that it  killed the defunct Nigeria Airways, he added.

    He said nearly all the airlines that have collapsed are traceable to the problem of owner-manager. If this factor could be addressed, the business could fare better, he added.

    Aligbe said undue interference by the owners of the business results in airline collapse.

    On his part, the Chief Executive Officer of Centurion Securities, Group Capt. John Ojikutu, said unless there is a forced merger of domestic carriers, they would not compete with international carriers.

    He advised that domestic airlines should merge or raise funds from the capital market, adding that any indigenous carrier that cannot operate five airplanes in its fleet and cannot operate in more than three routes should not be given Air Operator’s Certificate (AOC).

    “No airline for now can survive in the market by selling ticket at N7, 000 for an hour flight to Abuja without cutting some corner or jeopardising safety. I have been wondering why the NCAA has not started inspecting the balance sheets of these airlines in accordance with the economic regulations,” he said.

    An expert, who refused to be mentioned, said the growth of the economy does not reflect in the number of airlines in the  domestic market, adding that as long as they ignore global trends in aviation, the problems in the sector might continue to worsen.

    “In the past 10 years, there has been an average of 10 domestic airlines in operation at any particular time, with average fleet capacity of about 10. Today, there are only a few licensed airlines operating in Nigeria. All the aircraft owned by Nigerian airlines put together do not add up to the fleet of individual airlines in the United States, Europe or Asia,” he said.

    He,  however, noted that two major reasons airlines on the continent and, indeed, Nigeria have not been able to merge are the lack of trust for one another and fear of competition.

    According to him, the airlines also have to meet some of the prerequisites for mergers, adding that many of them cannot boast of such.

    “There must be desire and ability to collaborate or share; inherent transparency and trust; there must sound business model and sound management and discipline,” he  said, adding that the airlines must have strong customer appreciation or be customer-centric as well as have strong governmental/regional support.

  • Delta Airlines offers on board entertainment

    Delta Airlines offers on board entertainment

    Delta AirLines has announced it will begin offering free entertainment options on all of its domestic aircraft and two-cabin regional jets beginning on August  1.

    The move is the most far-reaching effort by an airline to provide hit movies, popular television shows, music and video games for free. With the introduction of Delta Studio and the airline’s investments to update the interiors of its aircraft, Delta is setting the standard for customers when it comes to free entertainment across more than 1,000 aircraft.

    All Delta customers, in every class of service on flights longer than one and a half hours, will have access to a selection of free entertainment options, either at their seat or through their laptops, mobile and tablet devices. Free entertainment options are available on flights with seat-back entertainment systems or on demand video streaming onboard Delta’s Wi-Fi-equipped aircraft.

    “Through the introduction of Delta Studio our customers have yet another reason to choose Delta and a different travel experience,” said Tim Mapes, senior vice president – Marketing. “Delta continues to be driven by customer feedback which has consistently placed the desire to be entertained at the top of the list of ways to improve our customers’ time in the air.”

    Delta customers seated in BusinessElite, First Class and Economy Comfort will have free, unrestricted access to in-flight entertainment on all international flights worldwide. Customers traveling in economy on all international flights will also have access to free content. Delta completed installation of seat-back entertainment systems on its international fleet in 2013.

     

  • Competition forces airlines to crash fares

    Competition forces airlines to crash fares

    Competition engendered by the entrance of more operators into the domestic airline sector is forcing carriers to lower fares on some destinations. Apart from the reduction in air fares, domestic airlines are also adjusting their flight schedules to enhance capacity.

    Investigations revealed that air fares on the Lagos-Abuja and Kano routes have been reduced from over N20,000 on a one-leg trip to about N10,700.

    The reduction is predicated on the entrance of a new carrier, AZMAN Air Services, on the Lagos-Abuja-Kaduna and Kano routes.

    Besides the use of lower fares to attract passengers, airlines are offering other inducements, including longer periods for bookings before payment is made.

    Because of the competition, Dana Air and Aero Airlines have also reduced their fares on the Lagos-Abuja route, offering a single seat for between N9,000 and N12,000.

    The new air fares are displayed on large billboards at one of the domestic  terminals at the Lagos Airport.

    According to investigations, air fares may become cheaper as more operators resume.

    Among the new operators are AZMAN  Air, Discovery Air, Hak Air, World Peace Airlines and WestLink Airlines, which are at the final stages of their  documentation with the Nigerian Civil Aviation Authority (NCAA).

    According to a source, operators on ground are Overland Airways, Aero, Dana Air, Med-View and Arik while IRS, Chanchangi, West Link and Discovery Air are yet to start operations.

    Executive Chairman of Airline Operators of Nigeria (AON), the umbrella body of domestic carriers, Captain Nogie Meggison, said the coming of more carriers was good for the industry.

    He said more domestic carriers would increase capacity for the existing carriers, as it would enable airlines to sit up in their strategy to remain in business.

    He said passengers would benefit from more operators as some airports that were hitherto not covered would join the nationwide air link.

    But, investigations reveal that the commencement of operations by AZMAN  Air Services on the Lagos- Kano-Abuja-Kaduna routes may affect the operations of IRS Airlines, when it eventually resumes.

    The new carrier, it was learnt, is consolidating on the routes flown by IRS, which operations are temporarily  grounded, and Chanchangi.

    Efforts by IRS to resume service two weeks ago were hampered by the crash landing of its Fokker 100 aircraft in Niger Republic on return from maintenance checks in Europe.

    Another operator, which may be affected by the operations of Azman, is Chanchangi which remains grounded.

    On their part, Discovery Air and World Peace Airlines are planning to begin operations. This is sending jitters down the spines of major operators, including Aero.

    The airlines plan to resume operations on over 11 routes including  Lagos, Abuja, Uyo, Calabar, Kaduna, Kano, Port Harcourt, Yola, Warri and Jos.

    The Managing Director of Med-View, Alhaji Muneer Bankole, said more operators were required to address the problem of under capacity in the sector.

    He said new airlines were welcome, adding that the quality of service would attract patronage to carriers.

    Bankole added: “They are welcome. The beauty of it is that the industry is under-utilised. We are 170 million people, so how many airlines are we talking of now?

    “These are still part of the things we are saying; we have no doubt, it depends on the quality of your service delivery to your clients; and all you need to do is to enhance your safety performance records.

    “We need more to come out, we are still very far away. They are all our friends and we need to improve.”

  • Expert: airlines require multiple licensing structure

    The Chief Executive Officer, Topbrass Aviation, Captain Roland Iyayi, has called for a multiple licensing structure for airlines. The implementation of such structure should be determined by the scale of operations, he said.

    The Nigeria Civil Aviation Authority ( NCAA), Iyayi said, should license airlines according to the type of aircraft they use for their operations, arguing that classifying all scheduled operators under the same structure was inappropriate.

    He stressed that charter operators, schedule operators and carriers who use small and medium range equipment should not be classified into the same operational category.The proposed licensing structure, he said, should be determined by the scale of operations of the affected airlines, such that the regulatory framework will cater for the carriers according to the volume of operations.

    Iyayi told The Nation that the structure should include: air taxis, for airlines that use small propeller aircraft; regional operators, for those that utilise medium range aircraft and national airlines, which have capacity to fly over the country, arguing that it does not make economic sense to classify all scheduled operators under the same operational regime.

    He called for reduction in tariffs and charges levied airlines, saying that only levy reduction could stimulate the growth of the business. He said the old tariff structure obtainable in the industry is long overdue for review, bemoaning the rate of insurance for registered aircraft, which he said is propeled by the high risk classification of Nigeria.

    Iyayi canvassed the need to reconsider the manpower in the sector’s master plan, saying it is key to its sustainability.

    He said aviation agencies should be in one complex to reduce the amount of time spent by operators while sorting out regulatory and other aeronautical issues.

    He appealed to government to make land available around the airport to enable private sector players have a window to invest in aeronautical and other businesses, which he explained, is in line with the airport city project.

    He also canvassed the convocation of a stakeholders consultative forum, to serve as a platform for industry players to examine the problems of the industry and offer solutions.