Aviation industry experts have identified government’s inimical policies and harsh operating environment as major factors responsible for the collapse of airlines in Nigeria.
The industry experts said these factors are responsible for the collapse of over 142 airlines since the year 2000, noting that the Nigerian Civil Aviation Authority (NCAA) had about 150 airlines in its registry in 2000 but most of those airlines had collsped, leaving only eight and out of that number, only four airlines are currently operating effectively.
Former Managing Director of Bellview Airlines and currently President and Chief Executive Officer of Sabre Network NMC West Africa, Gabriel Olowo said that 30 percent of the failures of the airlines are as a result of mismanagement by the owners and 70percent are as a result of the harsh government policies.
“I have been in the sector since 1973 and I have seen the airlines failing within a space of 10 years they started operations. So, there is a common factor. The business of Nigeria Airways was government business. The problem of corporate governance has always been there. The airline was supposed to be repackaged and become a new carrier but the then president said the government was not buying into the repackaging,” he said.
Olowo who is also the President of Aviation Round Table (ART) a think tank body in the industry, who spoke to THISDAY in Lagos yesterday recalled that the second generation airlines such as Okada airline, Hak Air and others aspired to succeeed far longer than they did, but they went under because of the heavy burden placed on airlines by Nigeria’s unfavourable policies, which he noted seem to favour carriers than indigenous operators.
He also recalled that as far back as 1994, exchange rate was around N22 to a dollar, while Nigerian airlines were selling one hour ticket for Lagos-Abuja or Lagos-Kano at N2,200 and at the exchange rate of N22, which amounted to $100.
“Lagos-Abuja was $100 value in 1994, which was about 23 years ago. Today exchange rate has moved from N22 to N450. Today, an airline sold ticket for N16,000, which is amounts to $30. This is too cheap because the airline may not generate the revenue to effectively maintain its aircraft.
“Someone in government should raise an alarm. If I am in government, I will shut down the airline, because this is showing you desperation for cash flow. And they call it promotion. What kind of promotion? Exchange rate will never make you earn the right tariff because people will not be able to buy the ticket.
“So, you decide to reduce the price; meanwhile, your cost is increasing. The airlines in Nigeria currently are not charging the right tariff after 23 years. If people cannot fly, then do not kill them. If I am NCAA Director General, I will shut any airline that charges less than $100,” Olowo said.
Experts have also accused federal government of giving equal routes to foreign airlines in Nigeria, while domestic airlines cannot reciprocate such routes considering their capacity and fleet number.
Checks show that South African Airways has 53 aircraft, Ethiopian airline has close to 100 but all Nigerian airlines do not have up to 52 aircraft.
Olowo attributed these limitation to scarcity of foreign exchange, which has made most of them abandon many of their aircraft in maintenance facilities abroad.
THISDAY
