How Nigerian Carriers Can Benefit from SAATM

Chinedu Eze

Air Transport Specialist and former Managing Director of the Federal Airports Authority of Nigeria (FAAN), Richard Aisuebeogun, has identified key factors that must be met for domestic airlines to benefit from the Single African Air Transport Market (SAATM) in their West Coast operations.

Over the years, the West Coast, which comprises West and Central African destinations, has been a lucrative market for Nigerian airlines. But recently other players have joined the market, making it more competitive. Also, some countries in the sub-region in the effort to protect their own airlines, have introduced outrageous charges on airlines from other countries, despite the adoption of SAATM, which advocates liberalisation of the airspace and unhindered immigration protocol for African airlines.

But despite these challenges, Aisuebeogun said the key factors that would enable Nigerian airlines to succeed is using appropriate equipment, on-time performance, and consistency in service delivery and using diplomacy with the support of Nigerian government to overcome aero politics, which tend to inhibit smooth inter-country connectivity in the sub-region.

Aisuebeogun said that despite the incentives contained in SAATM to encourage air transport in Africa, some states still cling tenaciously to old ways of protection and closure of their airspace to African carriers outside their states, shunning the liberalisation principle of SAATM and using the worn-out rivalry between English and French speaking countries to create division.

This is a dichotomy, which the Yamoussoukro Decision (the first effort to liberalise African airspace), failed to pull down and which SAATM is yet to succeed in supplanting.

Aisuebeogun noted that Nigerian airlines had dominated the sub-region in the past three decades with airlines like Okada Air, ADC Airlines and Bellview Airlines controlling over 80 per cent of that market. However, that dominance started waning when external factors like protectionism began to take root.

On the side of the airlines, he observed that internal factors like poor management, lack of understanding of the market in terms of yield and revenues, and operating aging aircraft became a hindrance to the airlines to maintain their dominance.

He however stressed that protectionism through arbitrary charges by various countries and lack of appropriate pricing were reasons that led to gradual withdrawal of airlines that operated from Nigeria to the West coast.

The market contracted further for Nigerian operators when some countries in the sub-region opened their airspace to fifth and sixth freedom rights to foreign airlines, thus cementing multiple designations in a region that was not fully liberalised and this affected the profitability of Nigerian carriers.

“The charges became so unbearable for most of the operators from Nigeria but because they have customers, many of them maintained operations on the West Coast but at the detriment of their profitability. The cost of operating into the West Coast, especially Francophone countries, became unbearable, especially with regards to charges and many of the airlines could not sustain operations and the withdrawal syndrome began gradually with reduction of frequency of flights,” he said.

So one factor that will make Nigerian airlines succeed, according to Aisuebeogun, is for them to use the right aircraft for their operations.

He said, “Arik Air introduced modern aircraft, next generation aircraft Boeing 737-700/800 but with a higher capacity which implied the aircraft weight would be higher because they were operating a wide-body aircraft that attracted high charges in the West Coast. If I operate a Boeing 737 and you are operating a Bombardier CRJ, I would pay more charges, very obviously, compared to you that operate a CRJ.”

Aisuebeogun emphasized that using the wrong aircraft size was one factor that held Nigerian carriers back on the regional routes. So using inappropriate aircraft to service the routes would not have made their operations profitable; he said, while observing that most operators wanted to buy mid-sized aircraft for a route that could be sustained with a turbo-prop.

“Everyone wanted 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 they were double the cost of fuel in Nigeria,” he said.

Aisuebeogun said there are huge opportunities in the West Coast with its over 390 million population. He said that is potentially a big market that has attracted airlines from other regions. And for any Nigerian airline to make money from the destinations in the sub-region, it must have to recognise and overcome the barriers, including ethno-political differences and protectionism.

“You can buy all the brand new airplanes but without solving some of these challenges you will experience what your predecessors experienced. The prevailing conditions that happened in the 90s and 2000s haven’t changed; they are still there. So, what is the guarantee that in the next 10 years you’d still be in the market? So until those changes are made through legislation of the ECOWAS heads of state or ministers in charge of air transportation in the sub-region, we may continue to have these problems.”

He said that the Yammosoukro Accord, the Banjul Accord and the Cape Town Convention are the tenets on which the African Union is riding its Single African Air Transport Market (SAATM) and must be respected for them to promote inter-regional transport that is going to be seamless.