Improved operating environment, removal of import duties on aircraft and spares and easy acquisition of aircraft have been identified as incentives driving investment in the industry.
Some experts, 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 told The Nation that many airlines failed because the managers lack the knowledge and technical skills to keep their operations afloat.
Among the new carriers billed to resume operations soon are: Discovery Air, NigeriaOne, the proposed private sector national carrier, Hak Air and others.
According to them, an owner/investor is one who has the technical knowledge of aviation 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: “People are investing more in airlines because they believe that the environment is friendlier. Now, operators could get newer aircraft that are more fuel efficient, added to this is the opportunity created by the waiver granted operators for aircraft and spares.
This has reduced the cost of the business, and has added value. He said at the same time, the quest for air travel is rising, and there is increased passenger traffic which presents an opportunity for growth. He said the market is huge and yet to be fully exploited by indigenous operators.
The industry is expanding, and this has opened opportunity for new investors who could inch into the market, he said, adding that the greatest problem of domestic airlines is the owner manager syndrome, which was what 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 said.
Ayigbe, an industry analyst, said undue interference by the owners of the business result in airline collapse.
In the case of private airlines, the list is endless, the owner manager factor, is in most cases responsible their collapse, he said, adding that this factor has to be removed, if they must be run profitably.
Ayigbe, who is also the former spokesman of Virgin Nigeria Airways, said many airlines were eager to come to Nigeria because they believe they can offer better management and service than the ones that existed before.
He said the new investors think they can achieve a shift of that paradigm. The fact is that many airlines do not engage in proper revenue management, forensic route evaluation , revenue accounting . But, the new investors think they would overcome such challenges by getting it right.”
He said: “More airlines are coming in because it is a high revenue yielding areas. People are coming to the industry for many reason. They think it could provide opportunity to engage in round tripping of money under the guise of running an airline.
“Some are coming in for ego tripping. There should be security clearance for the would be investors.
“Most of the airlines are not structured to make profit.”
