2013 is Do or Die for Nigerian Airline Brands

Doing business in Nigeria is not a tea party, at least so says the World Bank and its private sector arm – the International Finance Corporation which ranked Nigeria 131 on a list of 185 countries with ease of doing business as at October 2012. Nigeria is a country where your business can flourish beyond imagination or end up in frustrating failure depending on the tide of economic activity at the time of your operations or your type of business. The airline business is however particularly tricky. All over the world, airlines have been many investors’ nightmare and those that get it right are few and far between. In Nigeria many investors are still smouldering from their foray into the airline business. Those that are still in business are at best ‘barely hanging in there’.
It is therefore not surprising that the federal government is keen to play a major role to stabilize the aviation industry brand as well as ensure that best-practices are maintained in the area of safety and the rights of passengers. Back in October 2011, The Minister of Aviation, Princess Stella Adaeze Oduah declared that her focus was to reposition the aviation industry as a major contributor to the nation’s Gross Domestic Product (GDP). She has since tried to match words with action as she presented the Aerotropolis concept blueprint otherwise known as the ‘Airport City’. These are supposed to comprise investment clusters that include but not limited to: Agro Allied & Cargo; Development of Airport Business Park; Free Trade Zone (FTZ) and Fixed Base Operators. Crucial to its success is one of its intents which is to “Change the business model of the industry into a self-sustaining model through increased private sector participation” as capture on the ministry’s website.
It is in this context that one should appraise the ‘desperation’ of the federal government to save the airline industry from imminent collapse with its plans for the lease or purchase of 30 brand new airplanes for the ailing airlines in Nigeria. After initial misgivings, it is now clear that the new intervention plan will not involve the release of cash to Nigerian airlines but a funding system which facilitates the purchase of brand new aircraft to be negotiated by the federal government after due consultations with aviation stakeholders. The federal government will then provide the funds to purchase the new aircraft on stringent conditions and at very low interest rate. This is a commendable move as the costs of aircraft can easily be verified by any interested party to avoid any undue escalation of costs and possible corruption. In a country where there is no high-speed rail network, with poor (and dangerous) road infrastructure, and virtual absence of mass transit marine transportation, economic and social activities will be greatly hampered if aviation services are not only available but made affordable for the ordinary citizenry. Herein lies the crux of the matter.
In the Aftermath of the Dana Air crash of last year, most air travelers were left at the mercy of the two major airlines Aero Contractors and Arik Air. Frequent fliers will not forget in a hurry the many pains that came with that development. Air fares became astronomically high, flights were frequently over-booked (meaning that having a ticket was no guarantee for a seat), flights were routinely cancelled and postponed, sometimes serially for up to three days and chaos became a constant feature at the check-in counters as touts made a bold and heroic come-back. It was all too reminiscent of the 70s and 80s when the Nigerian Airways was the sole player. In light of the above, I was taken aback by the avalanche of criticisms that trailed the announcement of government’s intervention and the reinstatement of Dana Air’s operational license. I fail to understand why any airline should be grounded in the first place anytime one of its aircrafts is involved in an accident. I would rather have thought the affected aircraft should be the area of focus.
If all the relevant regulatory agencies are executing their mandates effectively, we need not be in a panic mode every time there is an accident which can occur due to a wide range of foreseen and unforeseen reasons. I shudder to think of the consequence (on air travel) if Arik Air which operates a fleet of 23 ‘tear-rubber’ medium haul and long haul aircraft including two Airbus A340-500, were it to be so unceremoniously grounded. The adverse effects to employees, aviation industry and indeed the economy are better imagined.
It is however pertinent to point out that the intervention on purchase of planes alone will not suffice. In a previous article I had called for an all-inclusive, integrated transport policy for the country. However realizing how territorial Nigerian public administrators are and in the absence of a coordinating platform in the Presidency, this may be a tall order for now, unless Mr. President seizes the moment. The Aviation Ministry, in concert with its various agencies, departments, stakeholders and interested members of the public should develop a win-win template that will ameliorate the pains of operators and passengers alike. The emergency challenges of inadequate (number and quality of) aircraft along with the long-term developmental plans most of which have been captured in the Minister’s presentation on the Aerotropolis vision need to be captured and implemented for any bail-out strategy to have long-term positive results . Princess Stella Adaeze Oduah had earned my respect and I believe the respect of millions of other Nigerians with her handling of the Nigeria/UK spat over frequencies and slots in her early days in office in 2011, it is my hope and desire that she earns even greater respect and glory when she succeeds in repositioning the Nigerian Aviation Brand to its pride of place in Africa. The Princess sure has a lot to do!