Despite initial predictions that it would take aviation sector in Africa longer period to recover from the effect of the devastation of COVID-19 pandemic, Nigerian domestic flight operations made quick recovery and galvanised ancillary services to a high economic throttle.
In November 2020, the International Air Transport Association (IATA) projected a slow restart for Africa airlines. According to an online platform, Flightglobal.com, IATA observed that African airlines were proving particularly vulnerable to the devastating impact of the coronavirus pandemic.
“Airlines in Africa have burnt all their cash reserves. We need to continue to provide financial support and financial aid, and proper policy and regulations, and we also need to quickly open up borders and remove hurdles to allow revenue streams to come to airlines,” noted IATA’s regional vice-president for Africa and the Middle East, Muhammad Ali Albakri.
That IATA study was off the mark for Nigeria, when airlines resumed domestic flights after the lockdown in July 2020. It did not take more than four weeks for the aircraft cabin to begin to fill up, after the prologue of scepticism and fears.
But the airlines faced a different challenge. There were not enough aircraft to meet the passenger demand. Most of the aircraft were ferried overseas for major checks. By the time flight operations resumed many of the aircraft that were put on storage became due for C-check. The ones already in maintenance facilities overseas could not be ferried back because work was not done on them. The Maintenance, Overhaul and Repair (MRO) facilities overseas were largely on lockdown. The ones in Nigeria that were due could not be taken out because there were no facilities to take them to. They were being chocked with aircraft.
The consequence was paucity of operating equipment. There was fewer aircraft serving increasing passenger traffic. This and other factors gave rise to outrageous airfares. From the beginning of 2021 to the end, airfares were relatively high, culminating to the peak season in December when fares averaged N65, 000, rising as far as N100, 000 and above.
Paucity of Aircraft
Realising that there were no equipment to meet the demand of passengers, Nigerian airlines desperately wanted more aircraft but even the ones that existed and were airworthy were picking snags, some were breaking down, while others suffered bird strike. The fleet continued to shrink. Then a window opened in terms of aircraft leasing. Arik Air leased some aircraft; Ibom Air boosted its fleet with leased equipment, Aero Contractors followed. A relief really came for Air Peace, which brought in five of its 13 brand new aircraft, Embraer E95-E2 from Brazil. The airline later leased two additionally aircraft, as it was the hardest hit with grounded aircraft, considering the fact that it is the biggest airline in Nigeria.
The Managing Director of Aero Contractors, Captain Abdullahi Mahmoud, told THISDAY that leasing was the solution to the paucity of aircraft in Nigeria.
“Nigerian airlines don’t have capacity, there are passengers, if you go to the airport as of today, you could see passengers begging for tickets. So all you are looking for is for capacity, just get the right aircraft, put it on the right route and passengers will fly. We could see the passengers’ number growing and the high season is coming, we don’t want Nigerians to go through what they have been going through in previous years most especially in November and December. You could see passengers sleeping at the airport, so in Aero we are trying as much as possible to do things differently. Once you buy Aero ticket you are sure of travelling and that is one thing that we are determined to do; to make sure that Nigerians are happy.
“Nigerians deserve it, there is no doubt about it. So, like I said, the challenge that the airlines are having is the capacity and any opportunity that you see in getting good aircraft, you have to jump into the opportunity and grab it. So we are doing things differently, we don’t have money to buy planes but if you have people who want to bring in the planes for us to cooperate and work together, that is all we need. So that is why we are trying to make something different, we want to change the narrative.
It was also interesting to know that some entrepreneurs saw a niche in providing the aircraft for some airlines, which latched at the opportunity and boosted their fleet.
“So now we see people that have the capacity, they want to bring in the aircraft, they want to come into collaboration, we discuss with Nigerian Civil Aviation Authority (NCAA) and said this is what we want to do, Nigerian civil aviation looked at the regulation and said go ahead and that is what we are doing. All we want is for Nigerians to move from point A to B and be safe and when they want it at the right time and be safe. And that is what Aero stands for,” Mahmoud said.
This helped to ease the system; yet, it did not tame the high fares because higher number of people travelled by air in 2021 than in the previous years because road transport was shunned due of security fears.
The airport manager of the Sam Mbakwe International Cargo Airport, Owerri, Mrs. Rejoice Ndudinachi expressed surprise as the surge of passengers during the Christmas holiday and noted that in the past during the Christmas season, flights bring in full load but return to Abuja and Lagos empty; but this time, there was full load for inbound and outbound flights.
Right Fleet
Aviation expert and the former Managing Director of the Federal Airports Authority of Nigeria (FAAN) Dr Richard Aisuebeogun observed recently that Nigerian airlines have started using the right aircraft for the right destination. He noted that in the past that was one of the many factors that helped to kill Nigerian carriers, using the wrong equipment.
From Embraer ERJ 145 to Airbus A320, Nigerian airlines in 2021 had clear idea about choosing the right equipment and deploying it correctly to maximise the benefits of any destination.
Aisuebeogun said one of the major factors that held Nigerian carriers back in the regional route was the use of inappropriate aircraft to service the routes, stressing that most operators wanted to buy mid-sized aircraft for a route that could be sustained with a turbo-prop.
“Everyone wants to buy a mid-sized aircraft at that time when a turboprop would have been good for sustainable operations. So aircraft like the ATR-72-500/600 or the ATR42-300/500 would have been good. Then the CRJ-200, Embraer 145 would have fit sustainable operations on the West African sub region, unfortunately Nigerian airlines have a number of mid sized aircraft that attract high operating cost.
” Even when you tanker out of Lagos, the cost of fuel in Freetown, in Monrovia, in Bamako or in Abidjan, in Dakar or in Banjul is extremely expensive. At a point it will be double the cost of fuel in Nigeria,” he said.
Customs Duty Waiver
Another factor, as many industry stakeholders noted, is that modern aircraft are beginning to come into the industry, from the latest aircraft in the world, E195-E2 acquired by Air Peace to Airbus A220 acquired by Ibom Air to other aircraft in between, Nigerian operators, stakeholders noted, have started making the right choice of equipment. Modern aircraft have improved fuel economy, they do not break down often so they cost less to maintain and they have more sophisticated corresponding weather and low visibility equipment.
One of the major achievements of the Buhari administration in the aviation industry in 2021 was government’s removal of duties on commercial aircraft and spares. The airlines said that with the full implementation of the waiver, airlines would save huge amount of money and noted that that was one of the significant ways governments support airlines in the world.
Speaking on behalf of Airline Operators on Nigeria (AON) in July last year, the Vice President of the body, Allen Onyema said President Muhammadu Bubari, in his magnanimity, granted the airlines waivers on customs duties on aircraft.
“AON, for the avoidance of doubt, commends the federal government for its unflinching support for the growth of indigenous investments in Nigeria. This was very evident in the manner the government got this challenge addressed immediately within 48 hours to the joy of the airlines. We equally commend the Nigerian Customs Service for also assisting the airlines, including but not limited to Air Peace that was used as an example, in getting their aircraft spares and aircraft released. Our planes have since started flying,” he said.
Setbacks
One of the major setbacks of the Nigerian aviation sector was the scarcity and high cost of foreign exchange. Another was also the high cost of aviation fuel, which continues to increase unpredictably and also poor airport facilities.
Airlines import spares with foreign currency, pay for aircraft maintenance in foreign currency, carry out training and retraining overseas and also insure their aircraft in foreign currency. So basically, almost every major expense by airlines is done in foreign currency, except aviation fuel. Airlines operators said that throughout last year it was extremely difficult to obtain foreign exchange and indications show that it would be the same this New Year.
Airlines complained that the price of aviation fuel continues to rise and oil marketers do not give prior notification so that airlines would adjust their fares in recognition of the increase, so they sell their tickets with the old price of aviation fuel and airlift passengers under the new price, as most tickets are bought in advance.
THISDAY also learnt that airlines faced tremendous infrastructure challenge during the peak season in December 2021, as facilities at the terminals in many airports were stretched and some of them like the conveyor belt began to break down.
Former Chief Operating Officer of Aero Contractors, Captain Ado Sanusi told THISDAY that despite all efforts by airlines to increase fleet, there is still reduction in capacity, which means airfares would continue to go up. This coupled with high cost of forex and increase in the price of aviation fuel would ensure that fares would remain up.
“There is natural tendency that the fares will remain up because there is lack of forex, naira is sliding and there is high fuel prices. Fuel cost rose from N180 to N300 per litre. All these are recipe for high ticket fares; unless there is deliberate effort to increase capacity by government making dollars available to airlines at a more affordable rate, but we contemplate stability when Dangote Refinery comes on stream in the area of aviation fuel, if it would be refining the product,” Sanusi said.
Solutions
The Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu recently said that there was significant improvement in the industry in 2021 and disclosed that more airlines would be given Air Operator Certificate (AOC) in 2022. This would help to boost capacity, drive down fares, as competition would check the high fares.
It is also hoped that the federal government would concession four major airports in the country in the New Year. This is expected to bring in modernisation of airport facilities to enhance passenger facilitation, as the Director of Engineering, Ibom Air, Lukeman Animaseun noted that in December airport terminal facilities were stretched and this led to flight delays and passengers on arrival waited too long to board to collect their bags because conveyor belts in some terminals broke down.
THISDAY learnt that there are still Nigerian airlines’ aircraft still in maintenance facilities overseas and almost all of them would be brought back before the end of the first quarter of 2022. This would boost capacity of operating aircraft in the country and would help reduce delays, flight cancellation and also tame the current high cost of tickets.
THISDAY
