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Airline sustainability: Employing right principle

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All too often, airlines are held responsible for problems that are befalling them. For sustainable aviation development, it is not a task that they can accomplish alone. WOLE SHADARE writes

 

Scepticism
Any time a new airline signifies its intention to begin flight operations, the response of stakeholders is always not a cheery one.
The tendency is to see any start up airline as an oddity out of a magician’s hat, a kind of illusion that will soon fade away.
Those in aviation business and the general Nigerian public roll their eyes and say, “they have come again.” There is a sense that this too shall pass and hopefully, like the plague, pass over us.
An alternative to this posture of sceptical paralysis is to find a renew commitment on how to do business and see aviation as serious business and not as status symbol or one, which gives them access to huge loans, foreign exchange that are mostly diverted to issues not related to their core aviation business.

Few genuine ones
A few of the airlines are sincere with their services, just that the enormity of the business is taking a huge toll on many of them as they soldier on. But how long can they go in the face of hostile operating environment, tough economic reality, difficulty in accessing foreign exchange coupled with huge competition posed by mega airlines that are eating deep into their market.
The new order is competition and deregulation. These are the twin monsters that have perpetually put the carriers down or made them to struggle. How long can they struggle before something snaps?
Even financially well backed airline could not withstand the aero politics of aviation. Aside that, Arik was self-destruct; a situation that has put the carrier at the mercy of the Assets Management Corporation of Nigeria (AMCON). which came for a rescue mission the troubled airline.

Airlines evolvement
Since 1980s, several airlines have evolved, operate and collapse in Nigeria as a result of unfavorable business conditions.
The major operational issue identified with airlines is incoherent manipulation of the components of their business models in response to competitive pressures and external factors within Nigeria air transportation systems.
Airline business is highly challenging and involves complex and capital intensive operations. Regrettably, the traditional business models (Full – Service, Low – Cost, and Charter Carriers) that have been deployed elsewhere do not adequately address the dynamics of air transport environment in the developing Nigeria economy.
The air transport services in Nigeria has been on the increase since 1980s that has brought about 50 airlines between mid-1980’s and early 2000 including domestic airlines in the likes of Aero Contractors, Afrijet Airlines, Arik Air, Air Nigeria, IRS, Nicon, etc.
According to Air Transport Action Group, the air transport industry generates and supports 6.7 million jobs in Africa and contributes $67.8 billion to Africa Gross Domestic Product (GDP) – direct, indirect and induced impacts.

Expected growth
It was forecast that this contribution will grow in Nigeria consistently by 5 per cent over the next 20 years and that the increasing demands of air transport services has enabled airlines contribute about $0.4 billion and over 61,000 jobs to Nigeria.
Despite the forecast growth, the numbers of airlines depreciated to the extent that most of them no longer exist. In 2010, of the nearly 40 airlines operating in the 1990’s, there remained only seven operating scheduled flights in Nigeria as at today.
Although inconsistency in regulatory policies, deteriorating airports with obsolete facilities contributed to the failings, however, two major factors inclusive of negligence and managerial incompetence contributed to their failures.

Lack of best practice
Airlines negligence of industry best practices in aircraft operations and maintenances contributed to several aircraft crashes and folding up of the airlines while managerial incompetence led to fund misappropriations, manpower mismanagement and high indebtedness.
Not a few believe that there is need for financial capital by Nigeria airlines with associated direct and indirect employment impact to economic development given a comfortable regulatory framework, modern infrastructure and taking advantage of the inherent geographical location of Nigeria.
It further depicts amongst others, the importance of travel needs in economic development and resulting demand for airline products. Using the appropriate pricing and scheduling mechanisms, the airline could contribute immensely to economic development.

Expert’s view
Managing Director of Medview Airlines, Alhaji Muneer Bankole, at a press briefing to announce his airline’s suspension of Dubai route last week, admitted that it is practically impossible for Nigerian airlines to compete with mega airlines such as British Airways, Air France, KLM, Emirates, Lufthansa, Delta and others because of difficulty in accessing foreign exchange, tough operating environment and access to spare parts.
He said, “Let me tell you this. From this part of the world, it is absolutely difficult to compete with these other airlines. For you to compete with the big boys on the other9 side there are three basic things you need to do. We do not have the resources to get aircraft of $50million. You cannot access dollars. I am still looking for $2.3 million dollars from the Central Bank of Nigeria (CBN) to pay for lease of aircraft. Secondly, there is no place in this country or this part of the world where you have basic maintenance facilities in case anything happens to your aircraft.”
He lamented that aircraft remain on ground for so long because of lack of spare parts for airplanes that ordinarily should be flying.
“When an aircraft is AOG, there is no AOG support here; that is what is keeping the aircraft flying. When an aircraft is AOG, you know that somebody is there. In Europe, there are platforms. If we have issues of spare parts, we have to wait scanning all over Europe, America asking them whether they have parts or not. While doing this, we catch up flight to London and wait for the airline. That aircraft will remain on ground throughout that period”.

Last line
Aviation overview in Nigeria depicts that the industry is battered with socio-political, cultural and economic factors. However, there are still potential for sustainability of airline operations. A strong potential has been propelled by goodwill gestures including the government recapitalisation policies, tax-free aircraft parts importation among others.

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Aviation

AIS authorisation: All motion, no movement

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Since 1998, it has been more of rhetorics than actualisation of yet-to-be-completed Aeronautical Information Service (AIS) automation. WOLE SHADARE writes that the project may end up as another white elephant project

 

Time factor

Today, we live in a world in constant motion where time and information are becoming more precious. No one wants to lose a minute at doing nothing. It is by integrating this reality that the International Civil Aviation Organisation (ICAO) is developing daily, the critical role of AIS to meet global challenges.

The objective of the AIS is to ensure the flow of information necessary for the safety, regularity and efficiency of international air navigation. When completed, it will enhance air to ground and ground to ground information and boost interconnectivity between aircraft and air traffic controllers.

The AIS is installed in 11 locations and is planned to go on stream at the end of the year but would connect every part of the country by the end of 2017.

To achieve success, all the key agencies or data originators including the Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN), Nigerian Meteorological Agency (NIMET), Accident Investigation Bureau (AIB), Nigerian College of Aviation Technology (NCAT), National Emergency Management Agency (NEMA), Nigerian Air Force, etc would need to enhance their data collation, origination, processing, storage and exchange system.

The deliverables

Other deliverables, according to the NAMA boss, would include the enhancement of e-NOTAM, e-Flight Planning, e-AIP, e-TOD, e-Charts, e-Flight briefing and also boost capacity for voice and data communication for both air to ground and ground to ground communication. ICAO Annex 15 states that the AIS shall use automated pre-flight information systems to specify that pre-flight information must be made available at each aerodrome /or heliport normally used for international operations.

This includes all aerodromes/ or heliports designated for regular use by international commercial air transport as listed in the relevant ICAO regional plans and any aerodromes/ or heliports serving as alternates to these regular aerodromes/heliports.

The challenge

The greatest challenge now lie with the NAMA, the NCAA, aviation institutions especially, the NCAT to accelerate the rate of AIS development to keep abreast of the new requirement arising from global demands as Nigeria cannot afford to continue to queue behind surrounding smaller African countries.

Stagnation

Nigeria has over the years remained stagnant with the automation of AIS. While Nigeria has remained stuck in the same position, many have or are moving towards Aeronautical Information Management (AIM).

The aeronautical information/data based on paper documentation and telex-based text messages cannot satisfy anymore the requirements of the ATM integrated and interoperable system and therefore the AIS is required to evolve from the paper product-centric service to the data-centric aeronautical information management (AIM) with a different method of information provision and management.

For that purpose, ICAO has developed a roadmap to reflect the importance of the evolution and to address the required changes and is being referred to as the transition from AIS to AIM.

The roadmap identifies the major milestones recommended for a uniform evolution across all regions of the world, the specific steps that need to be achieved and timelines for implementation.

The transition to AIM will not involve many changes in terms of the scope of information to be distributed. The major change will be the increased emphasis on data distribution, which should place the future AIM in a position to better serve airspace users and ATM in terms of their information management requirements.

It would be recalled that the global aviation regulatory body, ICAO had since 1998 sensitised all contracting state on the need for the services of AIS to be automated. Ever since 1998 in Nigeria, it has been more of hearing and reading on the pages of newspapers of AIS automation and it yet to be completed.

Little progress

In the last five years, a lot of progress had been made in this regard. Before now, fund had been the recurrent impediment of this project. However, since 2016, the story has changed. Immediate past President of Aeronautical Information Management Association of Nigeria (AIMAN), Mr. Shittu Babatunde, stated at the just concluded delegate conference/World AIS Day Celebration held in Ibadan, Oyo State last weekend that he was at a seminar in 2015 where he said they were told not to expect the completion of the project even in 2017.

His words, “That has come to pass. At the user’s end of AIS nationwide, the effect of the project is yet to be seen in our day-to-day operations. While we appreciate the progress so far made by the Ministry, NCAA and NAMA management in this regard, I appeal to once again the Federal Government to see that this project does not become an elephant project”. Not a few are impressed. The international world is not going to wait for the country.

The world is now transiting to System Wide Information Management (swim). November 2015 was the deadline for contracting states to implement Electronic Terrain and Obstacle Data (ETOD), which is far more expensive than the automation and Nigeria is yet to start this.

A must-do for NAMA

Managing Director of NAMA, Capt. Fola Akinkuotu reiterated that the agency is aware of the critical deliverables of the Aeronautical Information Management (AIM) project such as the enhancement of e-NOTAM, eFlight Planning, e-AIP, e-TOD, e-Charts, e-Flight briefing and so on.

He said given that the digitalisation represents migration to a dynamic data-oriented aeronautical information management system that facilitates the real-time exchange of aeronautical information in an accurate and standardised format from anywhere to everywhere globally, “the automation project is a must-do for NAMA.”

He said notwithstanding the scarce resources, NAMA would leave no stone unturned to ensure that the AIS Automation process remained on course and completed. The NAMA helmsman lauded staff of the AIS department for their diligence, hard work and dedication to duty.

Last line

AIS remain one of the most critical departments in the agency even though they are hardly given the prominence they deserve, because their job most often, is behind-the-scene. The absence of AIS in the system will bring about chaos in the entire civil aviation.

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Aviation

Tourism-transport summit garners support from aviation agencies

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Aviation agencies have expressed commitment to participate in the Tourism Transport Summit/Expo being anchored by the Institute of Tourism Practitioners (ITP) for the Ministries of Transportation and Ministry of Information, Culture and Tourism.

Agencies such as Nigerian Civil Aviation Authority (NCAA), Nigerian Airspace Management Agency (NAMA), Nigerian Meteorological Agency,Nigerian College of Aviation Technology (NCAT), Zaria and the Accident Investigation Bureau (AIB) will participate in the summit with theme: ‘Tourism and Transportation: The Key Sectors for Sustainable Resilient Growth and Development’.

In a statement signed by the organizers of the event, Institute of Tourism Practitioners (ITP), the two-day summit is the first edition in a series to be organized annually and is scheduled to hold at the International Conference Centre (ICC), Abuja from 21st – 22nd May, 2018.

The statement highlighted that transportation and tourism is predicted to be one of the world’s highest growing sectors in the new century, creating more jobs and increasing the Gross Domestic Product (GDP) of most countries of the world.

The organizers stated that the Summit and Expo are created to build strong synergy and chart the way forward to grow and enhance the two sectors. Other Sub themes of the Summit that includes Potentialities of Developing Regional Inter-Connectivity in Transportation and Inter-Modal Connectivity, Traveler Safety and Security; Licensing Regulations and Oversight–Meeting the International Standards for Sustainable Development of the Transportation and Tourism Industries; and Building Capacity for Global Best Practices in the Tourism and Transportation Sectors.

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Airlines jostle for Nigeria’s recovering domestic market

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Many airlines have applied for operating licences, but majority fell by the way side even before they started, while others are at the verge of scaling the hurdles. WOLE SHADARE examines the projected over-capacity on the route if eventually the carriers get their Air Operator Certificate (AOC)

 

Enthusiasm

They came with the hope of getting the all-important AOC. The tedious process had made many of them to fall by the way side. That is the fate of over 26 prospective airlines that were eyeing the domestic aviation market.

 

A total of 32 airlines made up of scheduled and non-scheduled operators are currently listed as holding AOC and are on the register of the Nigerian Civil Aviation Authority (NCAA) as at January 10, 2017 till date.

 

Airlines are categorised into scheduled and non-scheduled on the strength of the type of operations they carry out. A scheduled flight is a trip by airplane that has been planned for a certain time and date. Airlines sell tickets for scheduled flights to help travellers get from one destination to another.

 

The eight airlines that operate scheduled passenger operations are Aero Contractors, Arik, Overland Airways, Medview, Dana, Air Peace, AZMAN and First Nation Airways. A country’s civil aviation authority gets the power to issue AOC to an aircraft operator to allow it use aircraft for commercial purposes.

 

This requires the operator to have personnel, assets and system in place to ensure the safety of its employees and the general public.

 

The certificate lists the aircraft types and registrations to be used, for what purpose and in what area – specific airports or geographic region.

 

Meanwhile, two of the airlines, out of the 32, ceased to be regarded as airlines, owing to the expiration of their certificates.

 

 

Carriers with active AOC

 

The 30 other airlines with active AOC are Aero Contractors with AOC number CAN/ AOC/12-12/08 valid till January 1, 2019, Allied Air AAL/AOC, 07- 13/003 valid till July 30, 2017, Air Peace APL/A0C/09-14/001 valid till September 7, 2018, Arik Air RIK/AOC/07-10/01 valid till July 11, 2018, Associated Aviation ASS/ AOC/06-15/001 valid till May 31, 2017.

 

Azikel Air AZK/AOC/07-16/001, AZMAN Air AAS/AOC/05-14/002, Bristow Helicopters BHL/AOC/12- 14/002, Caverton Helicopters CH/ AOC/11-14/001, Dana Airlines DAN/ AOC/11-1808/01 and Dornier Aviation DAA/AOC/06-15/002.

 

Others are Executive Jet Services ELS/AOC/03-15/002, First Nation FNA/AOC/10-11/02, Gyro Air Limited GAL/AOC/10-16/001, HAK Air HAK/AOC/04-12/001, Izy Air IZY/AOC/12-15/001, Jed Air JED/ AOC/06-13/002 and King Airlines AAX/C/024.

 

Also included are Max Air MAX/ AOC/06-13/001, Medview Airline MVA/AOC/03-14/001, OAS OAS/ AOC/03/14/002. Others are Overland Airways OAL/AOC/03/14/001, Pan African Airlines PAN/AOC/12-14/001, Skybird Air SKYBIRD/AOC/04-13/08, Skyjet Aviation Services Limited SKL/AOC/12-12/07, Skypower Express Airways AAR/C/018 and West Link Airways WLA/AOC/02-11/002.

 

Also on the list are Nestoil Plc NOL/AOC/03-15/002, OMNI BLU Aviation Limited OBA/AOC/12-15/002 and Top Brass Aviation Limited TBA/ AOC/11-11/03.

 

 

Hurdles

 

Spokesman for NCAA, Mr. Sam Adurogboye, disclosed that there were five phases an airline underwent before completing the certification process and many airlines faltered on the way.

 

There is the pre-application phase – when the airline makes enquiry about the processes, followed by the document compliance phase, which involves a certification team reviewing applicant’s documents for compliance acceptance/approval.

 

The others are AOC process, also called demonstration and inspection phase, which involves evaluation by a certification team and applicant’s demonstration of compliance evaluation of management effectiveness, inspection of station(s) facilities, flight operations, maintenance and records.

 

The next is called certification phase, which allows the intending operator for approval of AOC and Operation Specification with coordination with Director for Safety Oversight and DG NCAA.

 

 

Determination

 

While some have fallen by the wayside, others are forging ahead in processing their AOC. There are fears that there would be over capacity on a lean domestic air travel market if some of them succeed in seeing through the process that could land them the licence to operate. They would be jostling for a small air market of about 10 million passengers annually.

 

Many of the routes are very unviable except for the triangular routes of Lagos-Abuja and Port Harcourt and to a large extent, Enugu.

 

A leading airline official said it doesn’t add up in situations where airlines in a bid to woo passengers will have to charge airfares in naira that are as low as N18, 000 to N22, 000 on routes where you fly for almost 45-50minites.

 

“That’s already like running at a loss. In the United States, no airline does a 50 -60 minutes flight and charges $60 (about N25,000), which is what the airlines are doing right now in Nigeria,” he added.

 

 

Backlash fear

 

Fearing a public backlash should they come out openly to announce increase in air fares, most airlines have opted to such subtle measures as raising fares on competitive routes (such as the Lagos, Port Harcourt and Abuja) or those routes that they enjoy a sort of monopoly, while lowering fares on those with fewer number of passengers.

 

“We do aircraft maintenances in dollars, buy spares in dollars, pay for insurance in dollars, and even buy fuel in dollars. What the CBN supplies is still not sufficient for us. Most of us still get dollars at the parallel market. And by the time we are converting earnings in naira into the dollars, it becomes very obvious in simple economics that the current fares have to go up by more than 60 per cent if airlines must continue to fly and be profitable,” said an airline’s spokesman.

 

“To be honest, the cheapest or most realistic fare Nigerians should be paying on any route within the country should be N40, 000,” he added.

 

 

Expert’s perspective

 

Former Commandant, Murtala Muhammed Airport, Group Capt. John Ojikutu (Rtd) said, “Let us be honest, the Nigerian domestic airlines cannot be selling passenger flight tickets at N25,000 to Abuja if the dollar is selling at N360 to $1, the same price it was selling two years ago when dollar was at N200 to $1.”

 

“The present cost of aviation fuel, the high operational cost cannot justify the air fare of N25,000 for an hour flight anywhere in Nigeria. The high operational cost also cannot be sustained except the airlines short change service providers and the supporting agencies or there are inflows of cheap monies coming from sources to sustain their operations”.

 

 

Last line

 

New entrants would be worst hit because the current ticket prices are not in sync or responsive to current realities and this is due to unhealthy price wars and pursuit of market dominance at the domestic side of airline business.

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