Chinedu Eze examines the challenges airways are going through in offering companies amid uncertainty and rising price of operation
On Monday the administration of a brand new entrant into the aviation business, United Nigeria Airways held a press convention with Aviation Correspondents on the Murtala Muhammed Worldwide Airport, Lagos to mark their three years as schedule airline operator.
United Nigeria Airways used the chance to show the tough terrain wherein Nigerian airways function.
The Chief Working Officer of United Nigeria Airways, Mr. Osita Okonkwo, gave a briefing on what the airline has achieved within the three years of operations and recalled that the airline began flight service in February 2021 and has been working ever since with out suspending operation for at some point. He mentioned that the airline employed about 500 contemporary personnel who hitherto didn’t have aviation expertise, and the airline funded their ab initio coaching and engaged them to work within the firm, disclosing that a few of these personnel have been poached by different airways.
Okonkwo mentioned offering jobs and getting jobs for contemporary fingers was in tandem with the philosophy of the brand new service as a result of “human capital growth was main pillar of our technique. With 500 direct jobs that will need to have created, about 1, 500 oblique jobs made doable by the airline.”
Talking in regards to the tough terrain wherein Nigerian airways function, Okonkwo mentioned most airways had been struggling to outlive the tough aviation atmosphere in Nigeria. In accordance with him, the problem besetting the airline and different home operators is the uncertainty surrounding their operations by way of price of aviation gas, the trade price, which affect on different points concerned of their operation, together with airfares.
“For instance, when United Nigeria Airways began operation in 2021, aviation gas was N300 per litre however as we speak it has risen to N1, 300 and there are indications that it will rise additional. Then common airfare was about N25, 000 however as we speak base fare is about N80, 000. So, the run-away inflation and the truth that tomorrow may be very, very unsure deflates the zest and the dedication the operators have, which propelled them to enter airline enterprise,” Okonkwo mentioned, whereas describing the adjustments as elements for catastrophe and concluded that solely miracle had saved the airline in enterprise.
IOSA
He mentioned that after one yr of operation, United Nigeria Airways began the Worldwide Air Transport Affiliation (IATA) Operational Security Audit (IOSA) Programme, which is an internationally recognised and accepted security analysis system designed to evaluate the operational administration and management techniques of an airline. IOSA makes use of internationally recognised high quality audit rules and is designed to conduct audits in a standardised and constant method. United Nigeria Airways handed the audit.
“Two years in the past, we grew to become IOSA licensed. We at the moment are IOSA member airline. Which means that we will interline with different airways who’re IATA members and we will enter Billings and Settlement Plan (BSP), which is a system which airways settle transactions via one central system,” Okonkwo mentioned.
He additionally spoke in regards to the spring alliance wherein six home carriers determined to work collectively and help each other. For instance, if one airline’s plane is grounded for tech or another cause, one other airline within the star alliance will airlift that airline’s passengers to their vacation spot. As a substitute of two plane leaving, for instance, from Lagos to Abuja with few passengers, the airways would use one plane and document a full load and after, they are going to settle the fares.
“Spring Alliance was speculated to be a really formal construction however it’s extra casual and we should admit that it isn’t an ideal interline settlement. It’s now extra of a cooperation settlement however we’re nonetheless engaged on it. In the mean time, solely two or three airways are at the moment robust in that facet, that’s, United, Air Peace and we work very carefully with Dana Air. There’s the issue of capability out there and many individuals wouldn’t have the ability to bail you out when you have points as a result of they don’t have the capability to take action and never that they don’t need to accomplish that.
“Additionally, the particular person should be going to the vacation spot you will with the intention to show you how to. So, you discover out that the protection of many operators is just not as widespread as one would have anticipated. Some days in the past, we had an settlement with Aero that did a few of our flights. We additionally had one with Arik, NG Eagle as a result of we didn’t need to do outright cancellation for passengers to search out their method and in at some point, we have been in a position to kind out the flight of 300 passengers. We’re dedicated to growing this alliance as a result of the native airways should collaborate earlier than they anticipate others to collaborate with them,” Okonkwo additional mentioned.
He used the chance to induce journalists to make use of their articles in educating Nigerian passengers who develop into violent when flights are delayed or cancelled, noting that it’s airways that lose when flights are cancelled. He reiterated that the foremost cause why airways delay or cancel flight is because of climate, stating that since November final yr, unhealthy climate has impacted a lot on flight operations in Nigeria which led to sequence of flight delays and cancellations.
Route Enlargement
Okonkwo mentioned that United Nigeria Airways is able to discover new grounds like opening new locations, because the airline did with Bayelsa and Abakaliki, the place they pioneered scheduled service.
“We’re prepared to enter markets the place others haven’t gone. That’s the reason we went to states like Ebonyi, Bayelsa and that’s the reason we’re exploring different airports as a result of there are individuals there who’re keen to pay for air journey regionally and internationally. We’re making ultimate preparations to begin our Ghana operations and we additionally specializing in different areas of Africa.
“We’re grateful to the Ministry of Aviation and Aerospace Improvement and the Nigerian Civil Aviation Authority (NCAA) for giving us a designation to locations like London, Netherlands, Amsterdam, Italy, Milan, Houston, Dublin, amongst others. However these are alternatives we need to develop progressively and systematically. We don’t fly for the sake of flying, we fly as a result of the route is viable and we will maintain no matter we however in there,” he mentioned.
Okonkwo mentioned air journey remained very essential as a result of it’s a catalyst to financial growth of any nation and it promotes tourism, which flies on the wings of aviation.
“Aviation business is important service pushed business. All around the world, it contributes to a rustic’s GDP and ours shouldn’t be completely different. We have to promote native tourism with aviation. I lived in Kenya for over 25 years and one of many issues they’ve is the Mombasa migration. When that occurs, the President strikes your entire cupboard out of Nairobi to Mombasa and that does a lot to the economic system of Mombasa. We have to start to do one thing that will retain foreign exchange within the nation. Other than the migration to the South East throughout the Christmas celebration, what different migrations do we’ve got? Even with the insecurity, with out the annual migration, the economic system of the South East wouldn’t be what it’s.
“So, we have to create markets and alternatives for actions. We actually have lots of work to do and we’re dedicated to supporting any initiative that will assist to develop inner travels which we predict remains to be very low. We’re main gamers and are able to do the heavy lifting and arduous work that’s required to unite our clients throughout the globe. We stay up for an aviation market that’s absolutely developed. We want investments in all of the subsectors of the business,” he mentioned.
New Plane
On plane acquisition, the administration of United Nigeria Airways listed the challenges Nigerian airways face of their effort to purchase or lease plane and mentioned that the method is fraught with inherited downside and others which could possibly be solved via the intervention of presidency.
“We mentioned we’d be bringing in new plane each quarter and it was speculated to be dry lease or outright buy. What we did final yr was to usher in two Airbuses in step with our plan. When those we had deliberate to amass have been being delayed, we needed to go for moist leasing, which is a brief time period measure. We hope that by the point the lease terminates, we’d have one thing to switch them. We have now ongoing discussions to lease three extra plane and we’ve got positioned an order with Embraer for 5 new plane and we’re finalising the negotiations,” he disclosed.
In accordance with Okonkwo, the Minister of Aviation has met with the worldwide foyer group to immediate the lessors to take away Nigeria from their blacklist and this embody Plane Leasing Group (ALG) comprising the 2 largest plane makers, Airbus and Boeing.
“Our enchantment is that we don’t miss out alternatives. Nigeria is the most important market in Africa. The potential is there. The market is giant. The Minister is on prime of this concern. It might assist that Nigeria is faraway from nation threat on plane dry lease. The nation threat score has hampered our operations and we’re uncovered to wet-lease which may be very costly,” he mentioned.
Excessive Dealing with Prices
Not too long ago, dealing with firms in cognisance of the inflationary tendencies, elevated the price of their companies, which many airways described as exorbitant. The Chief Working Officer of United Nigeria mentioned that everybody is growing tariffs and prices besides the airways.
“Dealing with firms have introduced an outrageous improve of their prices. All of the airport homeowners have elevated their charges besides FAAN (the Federal Airports Authority of Nigeria). Asaba airport has elevated its Passenger Service Cost to N8000, Anambra has additionally elevated theirs, MM2 is at N7, 000, NCAA remains to be accumulating 5 p.c prices, so if they’re speaking about decreasing air fares, they need to additionally cut back theirs as a result of it’s all extra price to the passenger. We’re shopping for aviation gas at a minimal of N1, 300, foreign exchange is N1,700, so, if we’re leasing, how will we pay for the plane and spare components?
“The reality of the matter is that the minimal price of airfare ought to be $100 and I don’t see how one can fly for lower than N150,000. As soon as the money runs out, you’ll begin seeing individuals parking their plane. In reality, some have achieved so as a result of if not for the parked plane, you wouldn’t have been in a position to make use of somebody’s aircraft to do 300 passengers. Right this moment, we had one other operator telling us they need to switch their passengers to our plane as a result of it doesn’t make sense to fly with 50 passengers in a 160-seater plane,” he mentioned.
Okonkwo additionally acknowledged that the minister and coverage makers must additionally intervene on behalf of airways as a result of airways want low-cost loans, foreign exchange, decrease nation dangers “in order that lessors don’t put extra money on you since you are from Nigeria, whereas somebody from Lome is getting cheaper costs.”
“For those who fly into Asaba airport by 7.05pm on a 50-seater, it will price you N500, 000 additional. They’d inform you they shut at 7pm, so, in the event you land at 7.05pm and go away at 7.10pm, you’d nonetheless pay N500, 000 per hour. For those who inform them you’re touchdown at 8.05pm, it will price you a million. For those who inform them to go away the airport open for 10; 00 pm, you will pay additional N1.5 million for 3 hours. So, what does the operator make? We have now to have a dialog round the concept that air fares are costly. After we began, we have been charging N25,000 however the trade price was nonetheless at $100. Now, we aren’t even getting $50, but 90 per cent of our expense is in {dollars}. It’s a dialogue that is essential,” Okonkwo mentioned.
The airways appear to be in a precarious state of affairs and till the uncertainties occasioned by hiccups in Foreign exchange and ever rising price of aviation gas are resolved, Nigerian carriers will discover it tough to plan and make projections of their operations.
