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Unlocking new opportunities for Nigerian airlines:COVID-19

It’s 5.30am Wednesday and the early morning bird perched on the apron of the General Aviation Terminal (GAT) of the Murtala Muhammed Airport, Lagos beckons on its passengers to come onboard. 

In the months prior to the outbreak of COVID-19, its patience was often tasked by delays caused by long queues of guests wading through the GAT lone scanning machine to access  seats allotted to them in its luxurious cabin. 

But today, the queues have eased; passenger patronage for the local airline industry appear to have dropped drastically, especially on the not-so-lucrative routes, forcing most investors in the sector to demand that the government create the infrastructure for other business opportunities outside the airlift of passengers, like the resuscitation of the aggro-cargo airports project. 

Without doubt, the absence of multiple gates and scanners at the Lagos MMA1 domestic terminal, has more than any other factor, led to flight delays, especially for early morning flights where hundreds of passengers have to squeeze through the single entry scanning point to meet up appointments in Abuja and Port Harcourt. Very often flights scheduled for 6.45am would not depart until 7am as pilots are forced to wait for trapped passengers inside the terminal building. 

But this wet Wednesday morning was, however, quiet different. The airport terminal appeared to have slowed down on its once fast pace; less busy, less noisy, but more friendly was the ambience as passengers’ facilitation became faster for airlines and airports staff.

Queues vanishing with money 

Settling down on the Boeing 737-500 aircraft emergency seat allocated to him, Alphonsus Isoh, a passenger on the Lagos – Abuja 6.45am Air Peace flight noticed a familiar face. It was a cabin crew he once complained  about the notoriety of  airlines not keeping to scheduled departure time to. He waits for him to finish the mandatory safety briefing for passengers sitting on the emergency exit and then quipped with a smile. 

“We are keeping to time today; I should arrive Abuja on time to honour a 9am appointment.” 

Indeed, the resumption of domestic flights in Nigeria has seen a reduction in the number of passengers flying. Where aircraft once had 80-95 per cent passengers onboard, it has dropped to 40 per cent. It is estimated that airlines, airports, regulatory establishments and associated business, could be losing about N200 – N300 million daily due to low passenger traffic following the resumption of flights after the forced shutdown to curb the spread of COVID-19. 

“The queue has disappeared; but with our money,” the crew joked in response to Isoh’s question. “But we will be too glad to have it back.”

Resolving immediate challenges 

According to Aviation Minister, Hadi Sirika, the government’s target is to grow the sector’s contribution to national GDP from the abysmal 0.6per cent to one per cent.

However, with the absence of a vibrant national carrier following the liquidation of Nigeria Airways, the only hope of the country’s aspiration to improve earnings from the aviation sector is through a deliberate government policy and support to existing private sector driven or flag carriers. 

Sadly, these carriers, like Air Peace,  Dana Air, Arik Air and Aero Contractors are weighed down by a myriad of problems, among them, high cost of aviation fuel, scarcity of forex for spares and maintenance, as well as multiple taxation to various agencies. 

These challenges when added to reduced income due to low passenger traffic means the airlines are no longer running as profitable ventures.  President of the National Association of Nigeria Travel Agents (NANTA),Susan Akporiaye, told Daily  Sun that the industry was already facing redundancy and that most establishments were laying off workers, no thanks to the fact that the airlines are no longer flying at optimal capacities.

A proof it can be done 

In recent weeks, the Federal Government has launched some protectionists policies to support local airlines against foreign carriers who fly into the country, but deny or stifle Nigerian carriers quest to operate into their airports. And the government has been commended for this move. 

And there is no doubting the fact that the crisis that attended the COVID19 pandemic, offered at least, one Nigerian carrier, Air Peace Airline, the  opportunity to showcase what the local  industry can do if given the right government support. 

Air Peace indeed put paid to the cheap blackmail of lack of managerial, technical and operational expertise of wholly-owned Nigerian airlines successfully operating in the international market. 

Anselm Ukoh, a travel agent who had some of its clients stranded in Nigeria and seeking to depart for China to be united with families lauded the management of the airline for investing in the acquisition of the three Boeing 777 aircraft that boosted the its fleet size with the right equipment and capacity to operate long haul evacuation flights to China, Israel and India during the peak of the pandemic. 

He recalled that it was the same  aircraft that was deployed to airlift stranded and dehumanised Nigerians suffering xenophobic attacks in South Africa last year. One can only imagine what could have befallen these trapped Nigerians if there was no local airline with the capacity to undertake these long haul flights. 

“To the pride of Nigeria, Air Peace rose to the occasion in fulfilment of its designation as a flag carrier. From moving the first batch of medical supplies from Istanbul, Turkey to freighting the second batch of medical supplies and medics from Beijing, China, to evacuating 301 Chinese, the Nigerian carrier showed it had all that is required to operate the 14-15 hours flight on its B777-200 between Lagos – Beijing – Abuja flights. The airline also successfully transported stranded passengers from Nigeria to Israel for the first time and then to India,” Ukoh said. 

“Air Peace indeed made good use of the COVID19 challenge to prove what a Nigerian airline can do if given the opportunity. It is instructive to note how airfares on the lucrative Lagos-Abuja-Dubai route crashed since July 2019 following the launch of Air Peace Airlines operations on that route. During the COVID-19 operations, the airline also crashed fares on the London route, something considered impossible. We are also seeing for the first time a Nigerian airline making a firm order for 10 brand new Embraer 195-E2 aircraft valued at $2.1 billion which it plans to  deploy  to underserved and unserved domestic and regional routes under its no-city-left-behind project. This provides sufficient reason for government to support the local airlines in all aspects to grow and remain profitable. It is not the time to take steps to stifle, strangulate or kill any investment by Nigerians in the sector,” Ukoh added. 

The giant strides of Air Peace certainly proves to doubting Thomas’s the capability of Nigerian airlines to weather  the turbulent storms of the global aviation industry with quality service delivery to customers if the right support and opportunities are created by the government. Under the post COVID-19 era, more government support would be required to sustain the operations of local airlines within and outside the country. 

This is not the time for government and regulatory establishments in Nigeria to take sides with foreign interests  against its own airlines.  

Unlocking dormant opportunities 

Lagos based agro-econonists, Maxwell Etim said with the decline in passenger traffic for domestic and international flights, it was time the  government resuscitated the perishable cargo airport project to create new business opportunities that  local airlines can tap into.  

The perishable or agro-cargo airport project was launched in 2013 as part of efforts to diversify the Nigerian economy, grow national earnings and boost GDP contributions from the aviation and agricultural sectors, but has been confined to the dustbin of history.

The target was for Nigeria to leverage the over N250 billion  annual air freight export market out of Africa where the country was recording zero participation policy discourse around the project since after its launch have gradually gone down. But while countries like Kenya, South Africa, Benin, Cote d’Ivoire, Ghana, Senegal, Ethiopia, Tanzania and Egypt are heavily participating in trading in commodities like fruits, fresh fish, vegetables and flowers and earning millions of dollars annually from the trade, Nigeria, which also produces these produce in abundance lacks the requisite infrastructure to compete. So far, Nigeria has watched helplessly as European, Asian and American cargo aircraft continue to freight into country daily huge tonnes of cargo, but fly out empty with no cargo from Nigeria.

It was in a bid to stem this imbalance in trade, that the Federal Government designated 13 cities including Abuja, Akure, Calabar, Ilorin, Jalingo, Jos, Kano, Lagos, Makurdi, Minna, Owerri, Port Harcourt and Uyo as pilot schemes for perishable cargo airports.  The airports in these cities which are in close proximity to communities considered as food baskets of Nigeria were to be developed with international standard perishable cargo storage and export facilities to enhance their operations.

Outside Lagos, the government abandoned the perishable cargo projects in the other designated cities that showed strong business prospects like Owerri, Benue, Akure, Uyo, Jos, Jalingo among others.  But despite the inherent benefits to Nigeria and its huge farming population, the government of President Muhammadu Buhari has not considered it necessary to speed up the review or redesign of the project. 

It is an ugly trend acknowledged by the  Director General and CEO of IATA, Mr. Alexandre de Juniac, who at the 2018 Global Media Day held in Geneva, Switzerland called on the Nigeria government to put in place the right infrastructure and tax incentives that can grow the industry and allow local airlines make profits. And the perishable cargo airport is one of such critical infrastructure needed by airline operators in Nigeria’s post COVID-19 aviation industry. 

Without doubt, the perishable cargo export industry can be likened to an untapped goldmine given the financial benefits it could offer to investors. Nigeria is richly endowed with lots of fresh goods currently in demand in Europe, which investors in the business can easily export and make money from. Products like pumpkin leaves, fresh ginger and garlic, white and red sweet potatoes, washed bitter leaf, water leaf, plantain, okra are in demand outside Nigeria. 

The market has been created by Nigerians in the diaspora who continually yearn for these home grown foods delivered to them fresh and healthy. And in recent years, more Nigerian restaurants have sprung up in various countries across the globe, and Nigerian dishes and cuisines have become much more appreciated by foreigners.  And airfreight appears to be the safest means of exporting these perishable goods to these markets.  The successful implementation of the perishable cargo project would  greatly boost the government economic diversification policy.

Experts have said Nigeria could be raking in an estimated $52 billion annually from the United Kingdom (UK) alone, if the full potential of the perishable cargo export industry is harnessed.

Sunnews

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