Nigerian Airlines Move to Regain West Coast Dominance

Chinedu Eze

Two weeks ago, United Nigeria Airways marked its inaugural flight to Accra, Ghana from Nigeria, making it the third airline to commence operations into the West Coast, after Air Peace and Ibom Air.

While United Nigeria operates from Abuja, the other two airlines operate from Lagos.

United Nigeria used Bombardier CRJ 900 to open the route but hinted it would eventually service the route with E145, which has 50-passenger capacity.

There are other foreign airlines that compete with Nigerian carriers and these are African World Airlines (AWA), which is based in Accra and Asky Airlines, which is based in Lome. The two airlines operate both Lagos and Abuja and AWA runs two frequencies to Lagos, aspiring to increase it to three times daily.

However, most industry experts posit that the Nigeria-Ghana route does not have high number passenger growth from year to year, a situation that could make the route easily saturated if many airlines begin to operate on it.

The industry experts told THISDAY that United Nigeria took a wise market decision to operate from Abuja to Accra, because if it had joined the Lagos-Accra route, it would have crashed the load factor.

“The crash in the load factor may not be noticed during the high Christmas season but after the Yuletide season, a flight can have just about 15 passengers or less. It happened to Ibom Air, which later started picking up,” one of the industry observers told THISDAY.

In Abuja, only AWA and now United Nigeria Airlines fly directly from Lagos to Accra, while Asky takes passengers to Lome and then connect them to Accra.

Asky may not have advantage on direct flight but it takes passengers beyond point to point because a passenger from Abuja can fly Asky to Abidjan, Dakar, the Gambia, Freetown and others from Abuja and Lagos.

So, Asky is connecting passengers from Central and West Africa, using its hub in Lome. It has drastically cut down the situation whereby a passenger from Cameroon who wants to travel to Abidjan would travel to France first and then fly to Abidjan from Paris.

Invariably, Asky is the dominant airline in the West Coast. That used to be the forte of Nigerian airlines, from the days of Nigeria Airways Limited to Bellview, then Virgin Nigeria Airways. After that period Nigeria started losing the market.

Currently Air Peace flies to at least nine regional destinations in West and Central Africa, including Abidjan, Accra, Banjul, Dakar, Douala, Freetown, Monrovia and others. It connects some of these destinations but not in the way Asky does because Asky operates in an airport without domestic wing but international, which allows it to easily transit passenger after bringing them to its Lome hub.

For Air Peace and other Nigerian carriers to develop dominance on West and Central Africa as they used to do in the past, they must have transit terminal both in Lagos and in Abuja. The transit facility will enable them to compete effectively with Asky. During the period Nigerian carriers dominated the West Coast, Asky was not competing in the market. It was not established then.

Travel expert and the organiser of Akwaaba African Travel Market, Ambassador Ikechi Uko, told THISDAY that Nigerian airlines should seek fifth freedom right from Ghana, which would allow a foreign airline to carry passengers or cargo between two other foreign countries, provided it is part of a route that includes its home country. Many airlines have been enjoying this right in Ghana for years and the purpose for Ghana is to attract more airlines and increase its revenue base and also makes Ghana to have different airlines landing and taking offer from its Katoka International Airport, Accra.

Uko said that fifth freedom right would enable Nigerian carrier fly from Lagos or Abuja, to Accra, take passengers from Accra to long distance destinations.

He noted that such right could make Nigerian airlines consider flying from Lagos to Toronto via Accra, which will enable the airline record high load factor and also serving the two countries.

Last week the International Air Transport Association (IATA) disclosed that passenger demand between Lagos and Toronto was increasing, going by the association’s new data. This is evidential indication that if a Nigerian carrier decides to operate to Canada, it will be more profitable to fly from Lagos to Accra and from Accra to Toronto, Canada.

During the inaugural flight of United Nigeria Airlines to Accra, the Chairman of the airline, Prof. Obiora Okonkwo, confirmed that although it used Bombardier CRJ 9000 but it would operate the route with Embraer E145, which many industry observers see as the right equipment for the route.

“We will deploy our DLJ-145. So, pretty much, we are offering the passengers not only apple to apple, but also what is bigger and better than apple. That is one way to tell you that we are ready and we are prepared,” he said.

Obiora noted the fluidity of the market but said that the United Nigeria Airlines would have the right equipment and would provide world class service to remain in the route and be successful.

Obiora stated that the most lucrative route in West Africa is the Nigeria-Ghana route, projecting that the route has about 50 per cent of the passenger throughput in the region.

“The traffic from Nigeria to Accra is more than all the other regional flights, the traffic put together. That is the goal of this whole traffic from Nigeria to other regions. 50 per cent of the traffic is between Nigeria and Accra. So, it can be projected to over 200,000 passengers per annum. But, every other region put together annually is less than that amount of traffic. So, it’s still a place to compete on. The other thing is that we have to be as reasonable and fair as possible with our pricing and costing,” he said.

Nigerian airlines also have to overcome the challenge of protectionism, especially from French speaking West African countries and although it is believed that currently there are some destinations that are underserved despite Asky’s dominance. There are destinations that if you increase frequency of flight to it will galvanise their economy. Some countries receive only one flight a day from airlines operating the West Coast but they need to have more flights

In those days of Virgin Atlantic Airways, THISDAY learnt that after the morning rush hour on domestic flights, the airline moves to the West Coast and earn revenues in dollars. Then many African countries had mismanaged their national carriers and were looking forward to airlines that could operate their routes. But today some of those countries have established national carriers and they are now protecting them from competition.

The Chairman and CEO of Air Peace, Dr. Allen Onyema, once remarked that contrary to views making the rounds that Nigerian airlines cannot compete on regional and international services; that Nigerian airlines can compete effectively if equal opportunity is given to other foreign airlines is given to them.

At the FNAC Conference organised by the Federal Airports Authority of Nigeria (FAAN) on Monday, Onyema asserted that Nigerian carriers have built strong capacity and should not be compared with AWA, which aircraft fleet could be compared to smaller airlines in Nigeria. He noted that Nigerian should eschew belittling their own carriers and be proud of what they have because Nigerian airlines are doing well when you take cognisance of the environment they are operating in.

He stated this in reaction to Chris Aligbe who in two fora had suggested that Nigerian carriers should be guided by AWA, an airline that has lost its verve, and whose fleet is smaller than that of many airlines in Nigeria.

So, Nigeria can once again dominate the West Coast but it has to compete effectively with Asky, which is currently dominating the West African destinations.