NIGERIA: Airlines Remit $5.57bn Yearly From Ticket Sales In Nigeria

More than 27 foreign airlines flying into Nigeria are remitting over $5.556 billion yearly from the sales of ticket, an aviation expert, Mr. Gbenga Olowo, president of Sabre Network (West Africa), has said. He noted that out of the 48,433 seats available in the international weekly flights from four airports in Lagos, Abuja, Port Harcourt and Kano, Arik Air controls only 3,889.

Olowo lamented that Nigeria had not been able to reciprocate traffic rights to most of the partnering countries. According to him, “this has resulted in huge negative balance of trade against Nigeria. This has brought about capital flight. It has put strong pressure on the naira by weakening the exchange rate.

This aids unemployment as Nigerian airlines’ growth remains stunted.” Olowo, who said that African Airlines had been regarded as too small, weak and fragmented, said that the option for them was to come out of the woods and merge or consolidate. The president urged the Federal Government to reverse all Bilateral Air Services Agreement (BASA) and the negative balance of trade.

He explained that the bilateral, multi-lateral, three layers of air services agreements and open skies agreement, which Nigeria entered into, had created a window of opportunity for foreign carriers to come to Nigeria from multiple points. Olowo said that the multiple points entry by foreign carriers had eroded the operational capacity of the domestic airlines. He noted the objective of the balance of trade had not been achieved.

In a paper he delivered at the 10th African Air Transport Safety & Security Summit, held in Accra, Ghana, with theme: “Building Strong Carriers in Africa: A case study of Nigeria,” Olowo explained that the era of stand-alone was no longer realistic as airlines all over the world are partnering, merging and consolidating to be profitable.

He added regional integration, bridging infra-structure gap (ICT, power, transport, water & sanitation) were the key to sustaining profitable airlines on the continent. Olowo stressed that Nigeria and, indeed, African airlines, must collaborate to succeed. He said: “Africa only holds about three per cent of passenger traffic and about two per cent of cargo in the global air transport equation.

The share of (the global) market African airlines have is diminishing. African airlines are mainly small, weak and under capitalised with poor management. “Twenty-five years ago, there were close to 50 African carriers that were members of International Air Transport Association (IATA); that number has now dwindled to about 20.

“Investments in fuel-efficient aircraft are among the reasons for a 1.7 per cent improvement in fuel efficiency the industry has seen lately.” He added that LAM Mozambique, Air Rwanda, Kenya Airways and Ethiopian Airways had embarked on aircraft modernization by acquiring new models , including the fuel efficient Boeing 787 Dreamliner.