Airlines’ Worry over Fleet Depletion Heightens as High Season Approaches
The withdrawal and suspension of two airlines, coupled the depletion of aircraft in the fleet of operating carriers will adversely affect flight operation in the high season towards December. Chinedu Eze writes that increase fares, limited equipment will cripple air transport in Nigeria and frustrate movement of people, as insecurity discourages road transport
The major challenge Nigeria airlines are facing now is how to increase the number of aircraft in their fleet to meet passenger demand as high season begins.
From next month there will be increase in passenger demand. Many Nigerians overseas will begin to arrive from October and this will continue till January.
Currently domestic airlines have less than 30 aircraft in operation and there are indications that aircraft previously ferried overseas for maintenance may not return due to the inability of airlines to access forex. But THISDAY gathered that as existing aircraft fleet is depleting, airlines might go for leasing to boost their fleet. But high passenger growth in the last three months of the year is predicted to stretch the equipment supply of the airlines as returnees into Nigeria during this period will rival existing passenger traffic this year.
Industry experts say that due to high fares, there has been reduction of passenger traffic by about 40 per cent. There is obvious reduction of aircraft movement and shrinking of flight schedule to many destinations. Economic downturn and increase in fares have taken many air travellers out of the airports, leaving successful businessmen, high net worth individuals, company personnel who travel on company expenses and government officials who also travel on government expenses to still patronise airlines on domestic routes.
Impact
According to the Chief Operating Officer of Ibom Air, George Uriesi, there are many consequences of limited fleet due to the inability of airlines to source forex to bring their aircraft on maintenance from overseas.
“The consequences are manifold. For one, capacity in the high season will be greatly reduced, which means limited numbers of seats available. That in turn will mean more passengers chasing less seats and therefore more expensive seats. But more than that, the effect of the high levels of uncertainty in the current airline business environment has made it difficult for domestic airlines to offer cheaper capacity up front, like is done every year, where by now people have booked their December flights buying cheaper seats. As of now, domestic airlines cannot even place December seats on the market because they cannot predict with any measure of reasonable certainty for instance, how much the fuel price will be by then. Not to mention the value of the Naira. So in order to remain safely in business, airlines have to respond to the fast changing and unpredictable environment with much caution.
“The resultant philosophy is you take what you can get today and hope for the best tomorrow. But you cannot plan for tomorrow based on today’s situation because if there’s one thing we’ve seen since the beginning of this year, the situation keeps changing and mostly for the worse. It is not good for the airlines, not good for the passengers, not good for the industry and all the businesses that depend on the airlines and ultimately, not good for the country. But we remain ever positive that things will change post election and we will begin to see light at the end of this tunnel,” he said.
Financial Distress
In July Aero Contractors withdrew its services for non-availability of aircraft and the Nigerian Civil Aviation Authority (NCAA) suspended Dana Air. Azman Air joined the suspension for more than 24 hours but a ‘miracle’ happened than the regulatory authority restored its licence to resume operation. Nigerian airlines are facing the challenge of offsetting their debts owed aviation agencies and NCAA is insisting that the domestic operators must pay these debts.
The airlines are facing financial crunch occasioned by high aviation fuel prices, the depreciation of the naira and high exchange rate and these are beginning to impact on their operations.
Precarious state
The airlines, no doubt, are in a precarious financial state. THISDAY learnt that their aircraft fleet is depleting because aircraft that are due for heavy checks may not be taken out of the country due to high cost and scarcity of forex; the airlines may not be able to bring their aircraft from maintenance for the same reason: lack of forex and they are also finding it difficult to acquire spares. This is because most transactions carried out by Nigerian airlines are denominated in foreign exchange.
A fortnight ago, the Director General of NCAA, Captain Musa Nuhu spoke on airlines safety and financial well-being. He assured the flying public that NCAA would ensure that any aircraft that is in the air is airworthy, while also admitting that airlines are in financial straights; just like their counterparts in other parts of the world, as Coronavirus pandemic asphyxiated that finances of most airlines, which are now struggling to bounce back, while some have suspended their operations.
The Director General said then that the airlines have to undergo the rigorous process of audit to ensure they have the liquidity to operate safely.
“The airlines have challenges; we have sat down with some of them, discussed with them and some of them need some injections of funds. Like Aero decided to shutdown on its own volition and they are reorganizing, getting more aircraft, expecting some injection of funds so that their financial status would grow. So, we are in discussions with them on this matter.
“Financial distress in aviation if not managed properly could turn out to be a safety issues because we don’t want airlines to start to cut corners. Those with financial difficulties if you notice, they are delaying flights, cancelling flights, but we need to work with them. We are all in this together, except where we have serious concerns in the continued existence of the airlines or serious violation, we will work with them hand on hand so that they will be able to get out of this financial challenges they found themselves,” Nuhu said.
Low Capacity
There has been continuous depletion of operating aircraft in the Nigerian domestic airspace. With the suspension of Dana Air and withdrawal of service by Aero Contractors, at least eight aircraft have withdrawn their operations, and this means less number of seats.
The high season, which will begin next month, will push up the demand. This would be exacerbated by political campaigns towards February general elections, which will trigger higher demand for air travel. Industry experts say that unless more aircraft is made available, the situation would be dire.
The Managing Director of Flight and Logistics Solution Limited, Amos Akpan, told THISDAY that the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Managing Agency (NAMA) and airline operators are usually overwhelmed by the demand of the high season. This is because high passenger traffic stretches the facilities at the airports. Example, last year the conveyor belts at both international and domestic terminals became malfunctioned when they operated endlessly for hours. At the domestic terminal airlines and passengers were miffed that the conveyor belts could not function optimally.
“FAAN, NAMA and Airline Operators are usually overwhelmed by the demands of the peak season in Nigerian domestic air travels. Navigational aids do not enhance landing and take-off in the season’s dust haze. Airports have limited facilities to accommodate passengers’ volume for the season. FAAN has no transfer infrastructures in Lagos and Abuja airports for international passengers to easily connect with domestic flights on to their final destinations. Fuel companies, handling companies and the airlines would not factor in the extra demands of the peak season in their plans. Consequently, we go through same experience of frustrations and complaints every end of year.
“This end of year’s peak season puts extra strain on the system because domestic airline operators do not have sufficient forex to buy spare parts, to pay for scheduled maintenance, and return aircraft to service. Travelers should expect usual perennial crowd at the airports, flight delays, cancellations, and the associated inconveniences. From the existing records of previous occurrences, operators and service providers should plan to mitigate the inconveniences and frustrations of customers. But let’s not be too enthusiastic because airfare and the economy are automatic hindrances to the purchasing power of a lot of potential travelers,” he said.
Reacting to the debts and why it was allowed to accumulate for so long, aviation expert and the General Secretary of Aviation Round Table (ART), Group Captain John Ojikutu (rtd) told THISDAY that there was suggestive complacency on the side of the regulatory authority, NCAA, which allowed the airline too much room to flex about. So what is “happening is our failure to regularly ensure operators’ compliance to the necessary regulations or the regulatory authority enforcement as at when due of the regulations on the operators through audits.”
“Now, coupled with the high prices or costs of fuel and forex, most of the airlines are ‘falling down’ and there is a reduction in domestic capacity in the available flights and seats. The few available will surely be at high demand and at high costs. The alternative available in capacity for passengers should be to look into the available capability to cargo even at 250/kg for local cargo and #500/kg for international cargo, Ojikutu said.
Capacity
Ojikutu said the airlines should put the travellers comfort first in their plans for the approaching season, Christmas, stating that if they fail to plan together, together they will fail.
Firstly, they must avoid unnecessary delays and cancellations of flights. They should take a look at the flow of traffic and passengers daily of the previous and immediate years to plan for the required flights.
Secondly, I imagine there could be about three million passengers for the remaining three months or average of one million per month from October to December; that would mean average of 33,000 per day. Airlifting 100 passengers per flight will give about 330 flights per day; I don’t think this is too much for the six airlines to share with reasonable coordination between them. All of them must not depart at the same time from the same airport but on slots allocation.
“I have once suggested that not more than two flights of different airlines should depart within an hour from Lagos to Abuja and from Abuja to Lagos. The same should be for other airports of Port Harcourt, Enugu, Owerri, Benin and Calabar. The blessed ones should position low size aircraft at these major airports for passengers’ distributions and connections to low passenger traffic airports,” Ojikutu advised.
On airfares he said that if they bring the fare to the major airports of an hour flight to N80, 000 per passenger, the airlines could make minimum profit of N2.5 million from the N8 million earnings on each flight of 100 passengers, even if they spend N3 million for fuel on each flight, but due to unpredictability of market, the cost of aviation fuel, the depreciation of the naira, airlines may not be able to sell tickets for December in advance.
“They cannot spend more than N1 million for ATS (aeronautical and related charges) and other ground services including landing and parking and ground handling services. Please kindly do the arithmetic for them to avoid the indiscriminate fare increases,” he said.
Industry stakeholders are anxious about air safety and they have expressed hope that domestic air travel would continue to be safe and that there would be enough capacity to meet passengers’ demand. It is however, hoped that in the next few weeks some of these airlines that are off the sky would return to business and airlines would lease more aircraft to boost their fleet.
