The global lockdown occasioned by coronavirus has threatened the existence of many airlines. The lockdown put to an end scheduled flight operations and over 80 per cent of passenger movement and then opened a vista in the transport of cargo, as medical supplies have to be urgently moved from one part of the world to another.
This has created a huge market in cargo operations, but for airlines that generate about 70 per cent of their earnings from passenger movement, the cargo market was like a spoon of water in a thirsty throat of one that needs a litre to survive. This gave rise to desperate competition in the cargo market; as well-known carriers struggled to cut a slice of the market for themselves.
There was reported brinkmanship between two major African airlines as they struggled over a flower, fish and meat supply contract, which eventually ended with a call to nationalism, which gave an indigenous carrier a head start.
Another limited market during the COVID-19 lockdown is the evacuation of citizens from different nations where they reside permanently or temporarily to their own countries. This was because many nations believed they have advanced medical system and would take better care of their citizens than the countries they currently reside. This was a good market for some airlines, but it is not near the huge diurnal flights that airlift about 500, 000 people globally.
This gave rise to jostling by airlines, employing all kinds of tactics and using diplomatic powers to snatch airlift opportunities.
For example, when Nigeria locked down its airspace on March 23, 2020, European carriers like Air France/KLM, Lufthansa and British Airways airlifted Europeans from Nigeria and other West African nations.
Delta Air Lines made several flights to airlift US citizens from different parts of the world. Under a special arrangement, Air Peace airlifted Israelis that reside in Nigeria, while reports indicated that Ethiopian Airlines won the contract to airlift evacuees for other countries.
What is however clear is that every government identified with its airlines; so it is natural that British Airways will airlift British citizens; unless the airline is indisposed then Virgin Atlantic, Easy Jet, Ryanair or any other would be assigned to evacuate the citizens. So the first choice is always the indigenous carrier for countries that have viable airlines that have the capacity to operate international flights.
The Canada Imbroglio
About two weeks ago arrangement was made for Air Peace to evacuate Canadians in Nigeria to Canada and also bring in Nigerians in that country from Cagliari and Toronto. Many of the passengers had paid for the evacuation; in fact, about 319 passengers had paid for economy and business class tickets. Then the Canada High Commission began to stall the plan and at a time insisted that Ethiopian Airlines would undertake the airlift, even at a higher fare of $2,500 for economy class, against Air Peace N1, 134.
This has led to stalemate and the government of Nigeria was peeved that the indigenous carrier it designated for the flight was being forced to drop the trip in preference to another African airline. Government stood its ground.
The Minister of Aviation, Senator Hadi Sirika and his Foreign Affairs counterpart, Godfrey Onyema insisted that a Nigerian carrier, which it assigned the job, must be allowed to do it.
It was learnt that government which had earlier stated that all evacuations under its arrangement must be done by indigenous carriers was not only miffed by the decision of the Canada High Commission in Abuja, but was also cross with Ethiopian Airlines for its alleged subtle pressure to usurp the operation.
Ethiopian Airlines is a house hold name in Nigeria because it is an airline Nigerians are proud of because of its success and the fact that it has always supported Nigeria and Nigerians also patronize it.
According to industry sources, it is expected that Ethiopian Airlines and Nigerian carriers should be working together to realise the African aviation’s goal of increasing its market share in the continent, which is dominated by foreign carriers that have about 80 per cent of the market.
The Group Chief Executive Officer of Ethiopian Airlines, Tewolde GebreMariam, has at different fora called for cooperation among African carriers, but the alleged jostling by the East African airline to take over the Canada evacuation operation is not in synch with the clamour by Africa’s prime airline.
Global Market Competition
It is expected that competition in the air transport market would be rife as airlines struggle for survival post-COVID-19 lockdown. Industry observers said any country that does not support its airlines would lose them, the workers would lose their jobs and foreign airlines would start ripping them off.
Industry consultant and CEO of Belujane Konsult, Chris Aligbe said Nigerian government has to protect its own airlines by applying strict diplomatic protocol in the Bilateral Air Service Agreement (BASA) and other similar agreements.
He said government should adopt quid pro quo strategy, where you treat a government the way it treats you; if a country stops a Nigerian carrier from operating to any of its destinations, Nigerian government would do the same to the airline that comes from that country.
“So foreign airlines should not be given advantage over our own airlines. The law of reciprocity must apply. Also, airlines must develop better marketing strategy to fit into the environment. The airlines may lose customers due to high fares.
“When airlines enjoy the monopoly of a route, they tend to hike the fare and tell you that it is market forces, but the passengers will be angry and immediately they have alternative they migrate to that alternative.
“This has happened in Asaba where an airline was selling tickets at N1010, 000 for a return fight to Lagos, which is less than one-hour flight. Half of such amount can buy any one return ticket from Lagos to Abuja.
“This is not good. Airlines are requesting for support from government but that government you are asking for favour has a big responsibility: to provide easy access to movement but when you secure government’s support and you at the same time rip off the people. It is not good. So the marketing department of airlines should restrategise,” he said.
From what is happening during the COVID-19 lockdown, it has become obvious that a country must stand solidly behind its airlines. If Nigeria did not stand behind Air Peace, Ethiopian Airlines would have conducted the flight last Monday, but government insisted that its own airlines must evacuate Nigerian citizens under its arrangement.
Aligbe said government should protect the domestic airlines from unfavourable competition by ensuring that it does not give advantage to foreign airlines.
‘Government should do everything possible to keep the airlines going and ensure that it does not support foreign airlines at the expense of local carriers. For example, African World Airlines and Asky want to secure more positions in the Nigerian routes, government should ensure that everything is done in the principle of reciprocity,” Aligbe said.
Former Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Muhtar Usman told our reporter that coronavirus pandemic has reset the world and it will adversely affect the airlines. So airlines have to look at the reality and adjust their operations.
“Airlines have to adjust to reality because things have changed. They should look both in and out. Whatever government can do to help the airlines it should; not in terms of cash bailout, but in the area of waivers on charges and other kinds of support.
“Government should assist the airlines to take advantage of the blocs we belong to like African Civil Aviation Commission (AFCAC), African Union, free trade agreements and see how they can benefit from the multilateral and unilateral agreements we have with other nations,” Captain Usman said.
Following the insistence of the federal government that Nigerian airlines must evacuate Nigerians from different parts of the world under its arrangement, many industry stakeholders saw this policy as a new dawn for Nigerian carriers. They gave kudos to the Minister of Aviation, saying if Nigeria carries on like this it would encourage domestic carriers to develop capacity.
Insiders are of the view that many foreign carriers that operate to Nigeria make huge profits from the country and would not want local carriers to grow. This is because their growing would ensure a diminished market for them. For example, since Air Peace started operating to Dubai via Sharjah, the market has changed. Emirates remained number one airline with the highest number of passengers to that destination followed by Air Peace.
So if government continues to support foreign airlines on international routes, airlines like Max Air and Azman, which already have large body aircraft will also take a chunk of the market and the industry would continue to grow and create jobs for teaming Nigerian youths.
This explains why the President of Aviation Round Table (ART), an industry think-tank group, Dr. Gbenga Olowo commended the action taken by the federal government to stand by its own airlines and insisted that Air Peace must be allowed to conduct the evacuation of Nigerians from Canada.
Olowo, said a foreign carrier should not be allowed to evacuate Nigerians when there are Nigerian carriers that are capable of doing that.
“The ART strongly support the federal government for maintaining its position that a Nigerian carrier should evacuate Nigerians from Canada and any other country.
“This is not a commercial flight; this is emergency flight operated under a force majure situation. This does not require commercial agreement or Bilateral Air Service Agreement (BASA). But what they want to do is to intimidate Air Peace and deny Nigeria the opportunity of its own airline to evacuate Nigerian citizens,” Olowo who is also the President of Sabre Network, West Africa said.
The ART President believes that with this new policy of protecting its own, the federal government has given domestic airlines the key to survive.
culled from THISDAY