Lagos-Accra route is seen as a must go for many Nigerian carriers. The destination usually marked the first foray for airlines that wish to embark on international flights.
Over these years it has remained somewhat lucrative, depending on the number of airlines that operate between Ghana and Nigeria.
Industry observers are however of the view that passenger growth on this destination is currently not remarkable because passenger figures seem to be undulating, according to economic temperament of the two countries.
But it is expected that as countries with major economies in West Africa and English speaking nations in the sub-region, there should be a higher level of trade between Ghana and Nigeria. What is currently obtained is good but it is the opinion of many that trade and services should be notched higher because the two countries share affinity that is not common with other countries in the sub-region.
It is when there is increase in business between the two countries that more passenger traffic should be expected to grow. If sincerely embraced, it is hoped that the African Continental Free Trade Area (AfCFTA) will boost trade among countries in Africa, especially in the West African sub-region, but until this is fully realised, increase in passenger traffic between Nigeria and Ghana will remain in low digit.
What this means is that for the route to be lucrative the number of airlines operating this route must be curbed. Recently, reports indicated that United Nigeria Airlines and Ibom Air would start flight operations to Ghana. If these two airlines join African World Airlines (AWA), Asky and Air Peace on the route, will they have enough passengers that will justify their operations?
An insider involved in managing the airline that profited from the route told THISDAY that when more airlines join the market, they will dilute the route and it will seize to be profitable. He said that there is a rapid loss of passengers on the route due to the devaluation of the naira, which has radically reduced the number of travellers on the route due to high cost of tickets.
“The market is not big. With the present Naira devaluation, the load factor has dropped; so, their coming in will open the market to the survival of the fittest. It seems they did not do their market analysis very well. The passenger load factor is now very low,” the insider said.
THISDAY learnt that AWA that used to operate five times daily to Lagos and twice daily to Abuja with its ERJ 145, a 50-passenger aircraft has reduced its flight to Lagos to 3 times a day and once a day to Abuja.
“The number is no more there. If you want to go there now, it will be a struggle. Naira devaluation has brought down passenger traffic. A family of five travelling to Accra will spend N2 million on flights and hotel. The passenger traffic has really dropped. In the past you could see in every flight about 10 passengers who would travel to Accra and return to Nigeria the same day. Accra seemed to be like a domestic destination in those days but things have really changed, “he said.
The charges are also high on the route. From Nigeria, the Federal Airports Authority of Nigeria (FAAN) charges $80 per passenger, the Nigeria Civil Aviation Authority (NCAA) charges $20 security tax and 5% on ticket fare, while Ghana charges $60 dollars per passenger, $10 one way security tax. When an airline builds this into its own fare, the cost of the ticket will become outrageous for a little over one hour flight between Lagos and Accra.
Travel expert, Ambassador IkechiUko, told THISDAY that on-time performance will give an airline advantage over the others when the route is saturated with flights.
“In 2014/2015 three Nigerian airlines, Medview Airline, Arik Air, Air Peace were operating to Ghana from Nigeria; then Dana Air joined and the market collapsed. That was the time when Ghana dollarized their charges and Nigeria was suffering economic recession. Accra became unfordable. The market was cannibalized because everybody went for promotional fares. Then AWA that was not hitherto doing well on the route benefitted from the market with its small body aircraft when others operated bigger aircraft. It increased its frequency to Lagos to five and Abuja to two.
“So, if more Nigerian airlines join the market similar scenario will emerge. Even the airlines flying now are not recording full load,” he said.
Industry stakeholder and Chief Commercial Officer of Green Africa Airways, Obi Mbanuzuo, told THISDAY that more airlines operating the route would make it a very difficult market because the size of the market will not be enough.
“Airlines will be struggling to drive out another until some will decide to leave. Because of competition you will not get the revenue you expect. There are too many charges on the route that may not justify operations without having full load,” he said.
Obi also said that the route ought to have grown because of the business relationship between Ghana and Nigeria and expressed the hope that if well implemented, the AfCFA will encourage and liberalise the market between Nigeria and Ghana and increase the movement of travellers and goods in-between.
“Once there is increase in the free movement of people, goods and services there will be more passengers at the airport. Nigeria is a powerhouse in the sub-region. Many manufactured goods in Nigeria are sold in Ghana and other countries in West Africa. These are expected to grow the passenger market,” Mbanuzuo said.
However, Ghana journalist and aviation write, Dominick Andoh, told THISDAY that to bring down fares, more airlines need to join the market.
“On the Ghana side, AWA enjoys near monopoly and their fares have skyrocketed. Air Peace came in and offered more capacity. Yet prices remain elevated.If Ibom Air and United Nigeria Airlines join, it will mean more capacity on the Accra- Lagos, Accra- Abuja route and likely to drive down prices.There is demand on the route to make it viable for all the airlines,” he said.
THISDAY
