When the Nigerian Civil Aviation Authority (NCAA) a couple of years ago began the process of rejuvenating the local aviation industry, not very many observers ever believed the initiative could within the shortest space of time yielded exceptional returns. The NCAA particularly wanted a vibrant aviation industry that could compare anywhere in the world. And to the authorities, there was no going back on the need to make the industry not just accident-free but investment friendly.
Aside several other collaborations with renowned organizations and aircraft makers, NCAA teamed up with the Nigerian-American Chamber of Commerce and Industry and Streamsowers & Kohn with the aim of expanding air transport market and stimulating the sector through local regulation and air services agreement. And interestingly, these collaborations are working out for good and essentially bringing out the potentials of the local aviation industry.
Laolu Akinkugbe, national President, Nigerian Association of Chamber of Commerce (NACC) had at a forum recently said, “the local aviation industry has a role to play in ensuring foreign investors explore the country’s potentials and that the time to chart a new course in the country’s aviation industry is now.”
Harold Demuren, director general, NCAA, similarly acknowledged Akinkugbe’s vision remarking that greater market opportunities abound in Nigeria.
He said with a teeming population of more than 140 million people, only 2.8 million people utilize domestic travel annually while 2.6 million passengers are recorded in international flights.
He said to further explore the inherent opportunities in the market, local airlines should strive to tap into the prospects of the Yamoussoukro Declaration that canvasses multiple designations, open sky, and the encouragement of low-cost carriers.
Demuren, therefore, said local carriers must acquire modern equipment to compete favorably with foreign airlines before thinking of operating maximally and profitable.
The new initiative
The airlines are, however, from all indications, overcoming the challenges of sourcing adequate funds to acquire the desired machines to face the growing challenge of operating optimally.
To Demuren, the significance of modern aircraft to the growth of the airlines’ operations cannot be overemphasized. New generation aircraft, he noted, reduces maintenance and fuel cost and enhances safety, as well as comfort of air travel.
He had to this end enjoined Nigerian carriers wishing to operate international routes to join IATA, stating that IATA operational safety audits are a precondition for membership.
“We have [an] opportunity to create a better environment for aircraft finance,” adding that, “It was a great challenge to Nigerian-American Chamber of commerce. We urge all stakeholders to proactively take advantage of the opportunities to have cleaner and safer skies, as well as cheaper and more comfortable flights,” he advised.
The thrust of this collaboration, he reiterated, was to build safer airlines that are profitable and government seeks to give access to domestic airlines through BASA/MASA, YD, and open sky to operate international routes.
Demuren who realized the importance of good corporate governance to the growth and development of airlines also noted that, “Our airlines need good governance, talented management, and public/private participation in order to flourish.”
Against this background, Demuren said airlines should continuously embrace training and retraining, as well as massive pilot training at home and abroad.
He added that the vision for the aviation industry was to develop five or six airlines that are strong enough to service the domestic, intra-African, and international routes.
Besides, Demuren said the vision is to also encourage fleet replacement of old age aircraft with modern and new generation aircraft by working with aircraft manufacturers, lessors and banks, taking advantage of the Cape Town Convention that use aircraft assets as collateral.
There are also plans to help airlines work with international aircraft leasing companies and local banks to introduce affordable aircraft leasing schemes for local and regional airlines, Demuren assured.
What’s more, plans are underway to create an enabling environment that could encourage the establishment of safe and profitable low-cost airlines that would attract new customers and enable more people to travel by air, he remarked.
The initiative is no doubt yielding a desired result as more airlines with the right equipment are coming into the fold and a few existing ones are re-fleeting with modern aircraft.
Arik Air, Aero Contractors, and the new sensation Dana Air Limited are of course a new force to recon with in this new initiative.
Choice of Airline
While it is believed that some operators are ignorant of the intricacies of managing profitable airlines, experts argued that the choice of airline services is sometimes the bane of most carriers.
Domestic airline operators according to them can only perform better as low-cost carriers otherwise known as no-frills or discount carriers. Simply put, a low-cost carrier is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. The concept originated in the United States before spreading to Europe in the early 1990s and subsequently to the rest of the world. The term basically refers to the airlines with a low or lower operating cost structure than their competitors.
Manny Philipson is an associate editor with BusinessWorld Newspaper where he anchors the Travel, Aviation and Motoring section of the publication.