How Indigenous Airlines Can Be Resilient

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By Kayode Oyero

Sustainability and profitability of Nigerian Airlines formed the kernel of discussion at the Q4 2018 Quarterly Business Breakfast Meeting of the Aviation Safety Round Table Initiative recently held in Lagos with the theme, ‘Short Life Span of Nigerian Airlines: The Importance of Corporate Governance’.

Regrettably, in the last 30 years, many Nigerian carriers have closed shops. Okada Air, Kabo Air, IRS Airlines, ADC Airline, Bellview Airlines, Chanchangi Airlines, Dasab Airlines, Savannah Airlines, Sosoliso Airlines, Nigeria Airways, among others, make the list of defunct airline brands in Nigeria. More so, besides going moribund, some of the airlines are taken over by the Asset Management Corporation of Nigeria (AMCON) as was the case with Aero Contractors and Arik Air.

Capt. Edward Boyo, Managing Director of Overland Airways, who spoke at the event, says: “Nigerians want cheap flights but top services, and this is responsible for market deficiency; a situation where the market does not pay enough. Also, it is high time Nigerians started to respect Nigerian airlines. We must stop talking down Nigerian airlines and start respecting them because the Nigerian business operating environment is hostile to these carriers and so they put in a lot to stay afloat and serve the people.”

Overland Airways is Nigeria’s longest-serving and most-consistent commercial airline that has provided uninterrupted scheduled flight services over the last 16 years.

Mr. Dapo Olumide, former Managing Director, Aero Contractors, explains that prohibitive airport and navigational charges as well as high government taxes are pain in the neck of Nigerian carriers. He adds that poor business plans, deficient financial models, high maintenance cost, inappropriate aircraft sizing, non-compliance with the Cape Town Convention, among others, have led to the death of some airlines in the country.

“Airlines in Nigeria must engage experts who can manage their finances right. Airlines in the country must use the right aircraft for the right route. Flying a 737 on a short haul flight makes your maintenance cost double with time. Why are airlines around the world replacing their fleet? They do that in exchange of fuel-efficient new generation aircraft because they know the prices of fuel will keep rising and they need to be competitive,” he stresses.

Capt. Boyo agrees with Mr. Olumide. He opines that executive management knowledge, technical management knowledge, financial management knowledge and political management knowledge are essential to successfully operate an airline in Nigeria. Relating the theme of corporate governance to the Nigerian aviation context, Mr. Tunde Fagbemi, Managing Director, Spring Fountain Limited, notes that getting competent hands to manage airline operations is crucial to the success of an airline.

Also, Mr. Victor Banjo, Former Director General, Institute of Directors, states that ownership interference and unethical practices, especially from top managers and board of directors had in the past led to the fall of some of Nigerian airlines. He therefore urges current indigenous carriers to embrace corporate governance.

Experts at the event also believe investments in aviation infrastructure will improve the fortunes of air carriers in the country. Critical factors such as regular training of personnel, fleet optimization, aircraft maintenance, high safety standards, among others will aid the sustainability of airline operators in Nigeria.

Photo Caption: L-R: Mr. Chris Aligbe, Former GM, Nigeria Airways; Mr. Victor Banjo, Former DG, Institute of Directors; Prof. Anthony Kila, Chairman of the Occasion; Mr. Tunde Fagbemi, MD, Spring Fountain Ltd; Elder Gabriel Olowo, President, ASRTI; Capt. Edward Boyo, MD, Overland Airways; Mr. Dapo Olumide, Former MD, Aero Contractors; and Group Capt. Edem Oyo-Ita, Director of Air Transport Regulation, NCAA at ASRTI’s Q4 2018 Quarterly Business Breakfast Meeting in Lagos, recently

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