Plasticity Amid Challenges

Nigeria loses huge foreign exchange to international air transport because Nigerian airlines are not major players, but Air Peace is buffeting through the odds to carve a market for Nigerian operators, writes Chinedu Eze

Nigeria is recognised as a very lucrative and highly competitive route by international carriers because Nigerians are compulsive travellers, the only country in Africa where its population fills up the cabins of aircraft from business class to the economy.

In 2022, reports indicate that foreign airlines operating in Nigeria repatriated about $1.1 billion and there are signs that foreign airlines would earn near double of this in 2023, considering the rate Nigerians are still travelling and the increase in airfares.

With such high population of international travellers, it is expected that Nigeria should be benefitting hugely from its air transport sector and the sector should contribute significantly to its GDP, but international air travel in Nigeria is dominated by foreign airlines that charge outrageous fares to Nigerians. They are using every instrument possible to hold tightly to the market, including diplomatic channels, aeropolitics and compromise of Nigerian government officials.

They know that if Nigerian airlines begin to gain sufficient passenger traffic on foreign routes, airfares will come down and the exploitation Nigerian travellers will stop.

Document obtained from the Nigeria Civil Aviation Authority (NCAA), showed that in 2022, 26 airlines carried out a total of 13,003 international flights to and from the Nigeria. In the same period, inbound international passenger traffic was 1, 648, 225, a significant increase when compared to 1,109,621 in 2021; while  outbound international passengers in 2022 was 1, 855,467, recording over 700, 000 increase compared to 2021, which was 1,109,525.

 It was only one Nigerian carrier, Air Peace that operated international flights; the rest were foreign airlines. So, Nigerian airlines do not even have up to 5 per cent of the international market.

Even African airlines, except Ethiopian Airlines are minor players in the market. During that period Kenya Airways recorded 344 flights, Air Cote D’ Voire operated 609 times into Nigeria; while EgyptAir equally followed with 706 flights. The highest besides Ethiopian Airlines was Ghana based Africa World Airlines (AWA), which operated 1,367 flights through Nigeria. Air Peace, the only Nigerian carrier in the international market, operated, 1,258 flights. Most of these carriers operate small-body, single isle aircraft, the big players like British Airways, Qatar Airways, Lufthansa, KLM, Air France, Delta Air Lines, Virgin Atlantic Airways operate large-body aircraft with average capacity of 320 passengers.

This buttresses what the former Ethiopian Airlines Group Managing Director, Tewolde Gebremariam said that European and Middle East carriers airlift over 80 per cent of travellers from Africa.

Market Penetration

Many industry experts have acknowledged that running airline in Nigeria is very difficult. They attribute the difficulty largely to certain factors, which include government not having defined objective and cohesive policy to push for Nigerian airlines to dominate the Nigerian air travel market, the disposition of international aviation community to air transport in Nigeria and the poor airport infrastructure, which has not significantly changed over the years.

The international aviation community categorise Nigeria as high country risk, which makes the insurance premium Nigerian airlines pay for their aircraft very high and the airport facilities are inadequate. For example, if Nigerian wishes to participate effectively in international and regional air transport, it ought to have transit facility at its airports.

Sometime ago, the Chairman and CEO of Air Peace, Allen Onyema, spoke about the difficulty in operating airline in Nigeria. He frowned at the short lifespan of the airlines. Industry stakeholders still debate the reasons for the short lifespan of Nigerian carriers, but many attributes it to lack of clear aviation policy by government, the lack of will to push for specific objective in the industry and lack of effective collaboration between the airlines and government in charting out a cause to make Nigerian carriers dominate players on its international routes.

Onyema who spoke about the difficult challenges running airline in Nigeria, said: “It is a very difficult business terrain. Airline business all over the world is not every body’s call. In Nigeria, over the years airlines have come and gone; from the statistics I learnt that over 50 airlines had existed here and have decided not to exist again. Out of over 50 or 70 airlines that have been established in this country only about four or five are in operation (then).

“And when you look at the health of those five, there is nothing to write home about.  Could this mean that the owners of these airlines who must have succeeded in other business endeavours got it wrong themselves? Could it be that they were responsible for the failure of their airlines? I think I disagree with that assumption. In as much as I will accept that some of these failures could be traced to the owners, but majority of them were out to do business but some of the policies that they met on ground were not quite helpful.

“So, running an airline in Nigeria is a very tough call and it is not something that gives joy to any of the operators. We operate in a very harsh environment; it just takes the grace of God for some of us to continue doing what we are doing. The challenges are enormous, they are too wide and so many, you don’t even know where to start from.  So, it is a tough one. It is a very difficult terrain.”

It is the opinion of industry observers that for Nigerian carriers to have a chunk of the international market, government must be intentional about it and must provide the needed support the airlines need.

Air Peace Resilience

Nigeria’s biggest carrier, Air Peace has defied many challenges thrown at it as the airline with the highest flights in Nigeria and the airline that has kept Nigeria’s flag flying at the international airspace. It is the wish of many that more Nigerian carriers could defy the odds and cut into the international air travel market like Air Peace. That will help the country reduce capital flight, have a share in the revenue earned from international operations and cut down the fares Nigerians pay. On the home front, it will create more jobs for Nigerians and it will boost the number of pilots and engineers from Nigeria who would travel overseas and earn the highly sought-after dollars.

The Managing Director of Flight and Logistics Solutions Limited, Amos Akpan, said Air Peace has put a lot of things in place in order to succeed and break the jinx of short lifespan or poor performance after some years of optimum operation.

“So, it has what is needed to sustain Nigeria on international air travel market and provide the incentive for other Nigerian carriers to join the market. I have observed the following about Air Peace: Air Peace has a board of directors that the management meets with on regular basis to give report. Air Peace takes welfare package of personnel seriously, as observed during the covid-19 and the current fuel subsidy impacts. Air Peace displays patriotism on national issues as demonstrated during evacuation flights from South Africa, India, China, UK, and Malaysia. This level of patriotism has never been exhibited by a business Organization in the aviation industry. Air Peace has demonstrated resilience and doggedness in a hostile business environment. She keeps going and growing against headwinds,” he said.

Akpan also said that it was his wish to see Air Peace operate daily flights out of Abuja and Lagos to at least 15 intercontinental destinations.

“That West Africans will not have problems flying Air Peace to other parts of the world in the next nine years.Nigerian government will designate Air Peace as our flag carrier to more destinations and that Nigerians will patronise Air Peace on international routes,” Akpan added.

The Slippery Peels

What has become very clear about international Nigerian routes is that foreign airlines that have secured flights from Nigeria to their countries do not want Nigerian airlines to compete with them. They device many strategies, play games to ensure that they dribble Nigerian carriers out of the routes. How does the Nigerian government respond to these games? Industry observers say that the major challenge Nigerian airlines face is the inability of the federal government to have standby policy on how to battle countries diplomatically when they put obstacles through their embassies, their airports on Nigerian airlines to stop them from reciprocating their flights to Nigeria.

“If these airlines know that Nigeria will always back their own and ensure that the right things are done they won’t be using that strategy to de-market or stop Nigerian carriers from operating to their countries because they know Nigeria will hit back,” an industry source told THISDAY.

The Fleet

Air Peace had planned when it started flight operations in Nigeria that it would provide service to international destinations

Spokesman of the Air Peace, Stanley Olisa, said that when the airline started in 2014 with a record fleet of seven aircraft to becoming the largest carrier in West Africa, Air Peace has continued to evince strength, reliability and consistency, becoming the aviation pride of Nigerians. He said the airline has not only put Nigeria’s aviation industry on the map; it has also shown the world that a Nigerian airline is capable of globally acclaimed feats across all fronts, including a matchless safety culture. 

“Air Peace’s vision is ‘to be ever dependable through the creation of seamless connections and network options for its domestic, regional and international markets’. This has steered the airline’s fleet modernisation and route expansion drive. In 2021, the airline took delivery of five brand new 124-seater Embraer 195-E2 aircraft- the first of its kind in Africa. The airline became Embraer’s launch customer for this aircraft model in the whole of Africa. These deliveries were part of the 2018 firm order for 13 E195s with purchase rights for seventeen of the same aircraft. Meanwhile, the airline also has existing orders for 10 Boeing 737 MAX 8 and five Boeing 737 MAX 10 aircraft in its bid to gradually phase out current Boeing 737 fleet. 

“Taking its fleet modernisation strategy a notch higher, Air Peace recently signed another milestone deal- a firm order for five brand new Embraer 175 aircraft and a planned maintenance facility with support from Embraer to service the aircraft locally. The new acquisition does not only make Air Peace the airline of the future but it is also in line with its determination to become the operator of the largest and youngest fleet of aircraft in Africa. It reinforces its commitment to enhancing its domestic and regional network connectivity and paves way for further regional expansion,” Olisa said.

He explained that the firm order is valued at $288.3 million; noting that cumulatively, this sums up to 28 aircraft on concrete order. Olisa remarked that in the history of Nigeria’s aviation, no airline has ever placed such an ambitious order.

“Air Peace, dominating Nigeria’s aviation industry, has continued to set records that have remained unbroken, blazing the trail in route and fleet expansion to meet the increasing travel demand of its markets. The airline operates a mixed fleet of 13 Boeing 737s, 1 Dornier 328-300 Jet, 3 Boeing 777s, 8 Embraer 145s, 5 Embraer 195-E2s and 10 Airbus 320s,” he added.   

He said that the airline is reputed for its no-city-left-behind catchphrase and seeks to achieve this ambition through the acquisition of ultra-modern aircraft, offering Nigerians world-class flight services

At the signing of the latest order for five brand new 88-seater E175s, the Chairman, Air Peace, Allen Onyema, stated: “This is another important step in helping to realise our ambition to connect the whole of Nigeria with the entire African continent, while also feeding passengers into long-haul flights from our Lagos hub. The acquisition enables us to continue delivering on our ‘no-city-left-behind’ initiative – connectivity is what our passengers, and Africa, demand. The deal also paves the way to establish local maintenance capabilities in Nigeria, with direct support from Embraer.”  

Commenting on Air Peace’s new order, Head, Africa and Middle East Region, Embraer Commercial Aviation, Stephan Hannemann, said: “Air Peace’s strategic and innovative approach, continues to make them a powerhouse of aviation success in West Africa. Already an E2 operator, it now makes sense to upgrade their ERJ145 fleet, offering passengers more seats and comfort with the E175. The commonality of the cockpits between the E1 and E2 fleet also simplifies aircrew costs and management. Acknowledging Air Peace’s significant investment in the acquisition of the Embraer fleet of aircraft, which has increased to 18 brand new firm aircraft to date, Embraer, in partnership with Air Peace is committed to directly supporting the establishment of local maintenance capabilities in Nigeria.” 

Air Peace, which is just nine years old, boasts of 20 domestic routes, eight regional and six international destinations, including Mumbai and Israel launched earlier in 2023. The sixth international destination, Jeddah, Saudi Arabia, was launched on October 31 and the airline gears to start operation to London.

Until the Nigerian government becomes intentional in its support for Nigerian carriers operating international destinations, foreign airlines will continue to exploit and ride roughshod on Nigerian travellers.

QUOTE

“With such high population of international travellers, it is expected that Nigeria should be benefitting hugely from its air transport sector and the sector should contribute significantly to its GDP, but international air travel in Nigeria is dominated by foreign airlines that charge outrageous fares to Nigerians.”