ABUJA (Sundiata Post) – Passengers travelling from Lagos to second-tier airports such as Ilorin, Akure, Asaba, Benin, Kaduna, Katsina, Sokoto, Ibadan and Yola do not have the luxury of choosing airlines to fly due to the persisting aircraft shortages at Nigerian airports.
Limited airplanes have forced airlines to either reduce frequencies or suspend operations in and out of second-tier routes, paying more attention to first-tier or frequently used routes to maiximise economic benefits.
The situation has seen some airlines dominantly control certain routes, limiting passengers’ choices and cutting jobs previously created by multiple airlines at the airports.
It also has cost implications for passengers. Last year, a fare from Lagos to any of the second tier airports stood at an average of N65,000, but currently, a one-way economy class ticket from Lagos to any of these destinations costs between N100,000 and N300,000.
“The principal implication of having few airlines fly certain routes is that the airline or airlines will determine the price of airfares on these routes and this is against the overall interest of the passenger. No opportunity for price discovery, fair competition, and choice,” Seyi Adewale, chief executive officer of Mainstream Cargo Limited, said in an interview.
“It also implies that if the airline has a technical issue, passengers will be stranded and this will significantly affect their social or business plans or engagements. The airlines, on the other hand, would be happy with this no-competition stance and potentially make ‘supernormal’ profit on these routes.”
Adewale said the sad reality is that there are no quick fixes as aviation generally requires medium to long-term planning.
He said airlines with current Air Operating Certificate (AOC) and Air Transport Licence (ATL) may need to enter into wet-lease agreements with international counterparts with (good fleet) capacity to quickly deploy two to four aircrafts and take advantage of the gap therein.
In the last few months, few aircraft have had to feed several passengers on domestic routes as Nigerian airlines struggle with fleet reduction due to high cost of maintenance.
Airlines that have sent their aircraft on maintenance are unable to return them as a result of the skyrocketing costs fuelled by a foreign exchange scarcity.
Others have been forced by the Nigeria Civil Aviation Authority (NCAA) to ground their aircraft for an inability to send them for maintenance, BusinessDay’s checks show.
In addition to these, the grounding of Dana Air, a relatively low-cost carrier, which had six aircraft in its fleet, has also impacted on the fleet operating the domestic routes.
Also, routes that Dana Air previously operated have seen an increase in ticket costs.
Investigation has shown that few airlines now fly into specific routes.
Before now, these second-tier airports had been operated by five or more airlines but currently, the airports are mostly operated by two to three airlines and flights are often not regular.
For instance, only one airline has flights into Anambra airport on selected days between September and the first week of October. The lowest cost for a one-way economy class ticket on the route is N116,000.
Three airlines operate into Asaba airport. Their presence has stirred competition on the route, with a ticket selling for as low N95,000.
Only two airlines fly the Lagos-Owerri route at the moment, with ticket prices from N116,000 to as high as N300,000.
Lagos-Ilorin flights are operated only by three airlines. While one charges an average of N100, 000, another charges between N115,000 to as high as N219,000. The third airline charges an average of N154,000. These airlines don’t fly into Asaba on the same days.
Three airlines operate regularly into Benin airport with fares between N110,000 and N170,000 for economy tickets from Lagos. These airlines are not regular on the route.
A highly competitive route is Lagos-Kano, with four airlines operating the route. As a result, ticket prices are as low as N91,000 to N110,000 despite the comparatively long distance from Lagos.
Lagos – Akure route is operated by two airlines and a ticket goes from N130,000 to N260,000.
Lagos – Sokoto route no longer has daily flights and only two airlines operate for the few days the route gets flights. Fares are between N150,000 to N175,000 for a one-way economy ticket.
Lagos – Ibadan route is currently operated by majorly two airlines with fares between N200,000 to N220,000 for a one-way economy class ticket on the route. One airline operates the route but not regularly, even with a promo ticket of N25,000.
Flights are not operated to Kaduna daily and only one airline currently flies there with fares between N120,000 and N160,00.
Lagos – Yola is operated by two airlines with fares between N155,500 and N200,000.
Katsina airport does not have flights operating from September to early October.
Ibrahim Mshelia, CEO, West Link Airlines, said that the dollar scarcity is causing a lot of issues for airlines as they have no money and can’t find dollars to pay for their parts and airplanes to return from maintenance.
“Most of their fleets are depleted. So, if the fleet is depleted, then people will choose routes that give them more money or routes that are favourable to operate with available airplanes.
“The injury is the delay in getting parts and dollars to pay for parts. The country has to make deliberate policies. These monies need to be made available to carriers because their operations are time-bound and if they don’t get the money on time, a lot of things happen.
“If airlines can’t find dollars to buy at a favourable rate, then it becomes a problem. It is the system that is creating a monopoly for the operators but not the operators creating the monopoly,” Mshelia explained.
Olumide Ohunayo, industry analyst and director of research at Zenith Travels, told BusinessDay that the major effects of having few airlines operate on certain routes are high fares, low employment and poor service delivery.
“Having one airline operate a route affects the number of jobs both for the airline, other service providers and the total aviation ecosystem of the airports. There is productivity diminishing when you also look at the service providers.
“There is a general decrease in all activities within the aviation ecosystem. And once there is a decrease in the aviation ecosystem, it will also reduce revenue generated. Having monopoly flights has no positive advantage. It’s all negative even for the airline operating such an airport because they may not be able to be competitive,” Ohunayo explained.
He said Nigeria is an economy where inflationary trends are galloping, noting that as the foreign exchange is running against the naira, access to foreign exchange is affecting businesses.
“Some things need to be done to reduce the interest rates. Access to FX is the major cost component for airline operators. Also, for the regulators, there is a need to reduce the cost of processing the Air Operating Certificate. Airlines should be allowed to bring in smaller aircraft like 20 to 25 seater aircraft such that the total number of seats should not be more than 100 or 110.
“Once it goes above this, they just go through the stringent regulation with the final commitment attached to it. Let us have lower ones that can come in and operate outside the tripod of Lagos-Abuja-Port Harcourt and operate into different smaller airports, which will help access to these airports,” Ohunayo further said. (BusinessDay)
