Akwaaba: Aviation experts chart way to profitability of African airlines
Experts in the Travel and Aviation sub sectors have enumerated the myriad of problems facing airlines on the Africa continent, while proffering solutions for sustainability and progress.
The experts who brainstormed at the 2016 Akwaaba African Travel Market (Aviation Day) in Lagos recently, revealed that African aviation is less than three per cent of global RPKs.
The former Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr. Richard Aisuebeogun, while presenting a paper titled, “State of Aviation in Africa” at the event, said airlines on the continent must have good internal management and business plan for sustainability to be achieved.
Stressing that a good business plan is crucial for all airlines, he stated that delivering the business plan is the difference between successful and failed airlines irrespective of the size of the airline.
He said: “Airlines management must be professional and must discern trends in the operating environment to adjust operation according to the dictates of the industry and operating environment, and not losing sight of the business plan”
He also mentioned safety performance, as one of the objectives airlines in Africa must aim to achieve and remain operational; adding that safety in Africa is a top priority.
Governments, he said are committed to achieving world-class safety levels in the Abuja Declaration while safety has improved but despite that Africa had the highest accident rate among regions in 2015, at 7.88 accidents per million sectors.
He observed that the growth is heavily constrained by the high industry costs, inadequate infrastructure at several airports, slow implementation of the Yamoussoukro Decision, lack of a single traffic rights negotiating body with respect to third parties like the EU, and stated that the performance of the African aviation industry is l agging behind to those of the rest of the world at less than 3percent of global RPKs.
He observed that the growth is heavily constrained by the high industry costs, inadequate infrastructure at several airports, slow implementation of the Yamoussoukro Decision, lack of a single traffic rights negotiating body with respect to third parties like the EU.
“Nonetheless, demand for air transport has increased steadily over the past years with passenger numbers and freight traffic growing significantly. Over the period 2010-2015, Africa has been one of the fastest growing regions in the world in terms of international traffic with an average growth rate of 6.1 per cent compared to the global average of 5.8 per cent. However, African aviation needs to grow at double-digit rates to be a significant player in the global industry.
“On the other hand, for Africa, the positive growth trend is expected to continue in the coming years due to political stability, robust economic growth, demographic boom, increasing urbanisation, and emergence of the middle class,” Aisuebeogun explained.
Speaking at the event, the Chief Executive Officer of Ropeways Transport and former Managing Director of Virgin Nigeria Airlines, Captain Dapo Olumide, observed that lack of good corporate governance and ethics is the major problem why African Airlines fail in Nigeria and Africa in general.
He added that the ownership structure of the airlines is another factor militating against growth, a situation where the owner appoints family members as directors instead of independent directors who are experienced in aviation business.
He stressed the need for airline operators to have the right aircraft in their operation to determine which aircraft type suits their operations and not just deploying big aircraft on a route that has fewer passengers.
There is no economic sense, according to him, in deploying big aircraft instead of a small one on a route with less passenger traffic.
Going further, Olumide pointed out that most airlines on the continent have wrong business plans, saying that the business plans must be right if the airlines sustainability.
Olumide also identified the lack of maintenance facilities in the country (Nigeria) to carry out major repairs and overhaul on aircraft as another challenge facing airlines in the industry.
Until all these challenges are sorted out the industry might be in a circle, he said.
The former Director of consumer protection of the Nigerian Civil Aviation Authority (NCAA), Mrs. Fatima Garbati, in her submission identified the problems of aviation in Africa to include fear, altitude and refusal to obey international conventions.
She noted that some African countries are afraid that countries like Nigeria with its big population and potential will dominate them.
She observed that this is responsible for the non implementation of Yamoussoukro Declaration of 1988 on open skies for Africa many years after, adding that there is need for Africa to wake up to their responsibilities to make aviation work.
Garbati noted that even the Customs Service at the gateways like airports and seaports are totally indifferent to issue of clearance of airlines equipment and others.
Corroborating Garbati’s view, a Kenyan, formerly Kenyan Airways, Virgin Nigeria, and now Rwandair Senior Executive, Dorcas Aketch, maintained that African Airlines consider themselves as competitors instead of partners.
She said if fear among the operators in African aviation can be removed, it will help the industry to grow.
Aketch noted that there is need for the airlines to interline, adding that it will be better for the domestic airlines to interline with the foreign airlines.
According to her, working as partners and not competitors will make the airlines grow in Africa.
Speaking from the angle of developing professionally operated airports as the way forward for African aviation, the former Managing Director of Skyway Aviation Handling Company Limited (SAHCOL), Mr. Chike Ogeah, stated that it is better for Nigerian airports to be concessioned to achieve professionalism in operations.
He stressed the need for transparency in concession, and appealed to the aviation unions to see reasons with the government on why the airports must be concessioned.
He noted that SAHCOL was grappling with numerous challenges which it gradually overcame after its privatisation.
In his remarks also, former General Manager, Public Affairs of Nigerian Airways and also the Managing Partner of Belujane Konsult, Chris Aligbe, also stressed the need to get the right people to manage Nigeria’s airports for the industry to progress.
According to him, the concession of Nigerian airports is very imperative as there is no alternative to it.
He however, urged the government to carry the Federal Airports Authority of Nigeria (FAAN) staff along in the process of concession of the airports.
Aligbe stated that the system in FAAN is incompetent and not the staff, who he assessed, are very intelligent people but are working in an incompetent system.
Lending voice to the discussion, former Managing Director of Nigeria Airways, Yomi Jones, brought to the fore the problem of corruption in Nigeria aviation.
He stressed the need for transparency in the aviation industry so as to eliminate the problem of corruption, adding that without this the industry cannot move forward.
He lamented that the Nigeria Airways model was a goldmine which was mismanaged, and the properties sold without due process.
Also speaking, Captain Samuel Thompson of African World Airlines (AWA) and a Ghanaian stressed the need for the airlines in the industry to do things differently.
He advised the airlines to have their own unique business plans which should be totally different from others to succeed where others fail.