Olowo tears into lone-wolf operational tactics of indigenous airlines, proposes mergers for efficient service delivery
The lone-wolf operational tactic of indigenous airlines leaves them more fragmented and less competitive in the regional and global aviation market, as reckoned by the President and Chief Executive Officer of Sabre West Africa Network, Dr Gbenga Olowo.
Olowo’s observation comes on the heels of a failed attempt by the Federal Government of Nigeria to launch a national carrier, which allotted 49 per cent stake to a foreign competitor – Ethiopian Airlines – coupled with imbalances in Bilateral Air Service Agreements (BASA) that allow multiple entry points and frequencies for foreign airlines, leaving indigenous airlines at a disadvantage.
Addressing participants at a forum organised by the Aviation Round Table (ART) in Lagos, Olowo said there was need to change the status quo forthwith by establishing “oligopoly flag carriers” backed up with favourable government policies.
According to him, it would be herculean for indigenous airlines to compete against their foreign counterparts without collaboration, cooperation or mergers, adding that “Nigerian airlines remain small and highly fragmented.”
“Our eleven Airlines with a total fleet of 104 aircraft – Air Peace 30, Arik Air 17, Max Air 13, Dana Air 7, 0verland 7, Ibom Air 7, ValueJet 6, Azman 5, Rano Air 5, United Nigeria 4 and Green Africa 3 – are less than the one controversial Ethiopian airlines (ET) that parades 144 aircraft in its fleet for example.
“Competing out there will be a herculean task without collaboration, cooperation and or merger
“Merger was successful in banking and should be successful in Aviation, dwelling on fleet size rather than share capital,” said Olowo.
Another critical factor working against indigenous airlines is flight delays and cancellations that reflect an average of 61 per cent On Time Performance (OTP) which, according to Olowo, “is woeful & deplorable.”
Olowo noted that it would be difficult to sustain “flights in a slot regime such as LON, NYC, JNB, etc with such deplorable on time performance (OTP). It will be practically impossible.”
He added: “Truth be told, this is either a reflection of inadequate fleet size, poor maintenance and or inefficient workforce outside the questions of weather, technical, etc.
“According to flight data on Q1 2022 by the Nigerian Civil Aviation Authority (NCAA), a total of 23,599 flights were operated on domestic routes in the first three months of 2022.
“Out of the figure, 14,130 flights were cancelled in Q1 2022 on domestic routes, representing 59.87 per cent of such flights.
“Nevertheless, we can make use of what we have, to change the status quo.”
Olowo proposed the establishment of two competing flag carriers by indigenous airlines to create the needed capacity to tame the tide of dominance by foreign.
“Permit me to, again, fly a kite on Collaboration, Cooperation and or merger by establishing 2 competing oligopoly flag carriers.
“We are all familiar with Oneworld, Skyteam,etc delivering sumptuous services globally with each Airline maintaining its own individual identity.
“If our airlines (who are competing) can go to court on common interest, they can as well come together to drive a more efficient service delivery,” Olowo advised.
