· Seven new carriers on verge of operation
Chief Executive Officer of Financial Derivative Company Limited (FDC), Mr Bismarck Rewane, has predicted that one major airline group could emerge in Nigeria, but with a proviso that significant challenges must first be addressed in the sector.
Although he declined to disclose the carrier, the implication is that the emergence of any such carter would not only help for interline of that carrier with global players such as British Airways, Lufthansa, Air France-KLM, Delta and United, among other global airline brands.
This came as he equally disclosed that 17 domestic carriers are at the verge of acquiring their Air Operator Certificate (AOC), which empowers them to become operators. Airlines currently undergoing AOC process in accordance with the Nigeria Civil Aviation Regulations (NIGCARs 2009) are Peace Airlines, Air Taraba, EAN Aviation, Executive Jets Air Services Limited, Gyro Air Limited, Izy Air Limited, Jupiter, Manyatta Engineering Services.
Others are Nestoil Plc, Prime Air, Toucan Air, Baltic Air, Oriental Airlines, Meridian Airlines, Millennium Travels and Tours, Okada Air and Air First.
Once process is completed, AOC is issued, flight operation is expected to commence. In his monthly Economic News and Views for September 2014, presented by Rewane at the Lagos Business School, with theme, “Inflation Up, Stock Market Down, What Next”, he lamented that only one carrier in Africa was profitable.
Taking a cursory look at African airlines performances, three airlines considered to be the strongest in the continent made losses except Ethiopian Airways, which made a profit of $143 million. South African Airways and Kenya made losses of $42 million and $92 million respectively. Rewane further lamented that virtually all airlines in Africa except Ethiopian and a few small carriers are financially bankrupt, adding that cumulative financial loss between 2011 and 2014 indicated that trading was unprofitably.
He said: “African airlines are too small to survive. There will probably be only three major airline groups in SSA; South African Airways, Ethiopian Airways and Kenya Airways. One major airline group could emerge in Nigeria. But first, significant challenges must be addressed in the aviation sector in Nigeria”.
Aside many challenges confronting African airlines, the FDI boss explained the Ebola Virus Disease (EVD) is a major problem for African and Middle Eastern airlines, stressing that many multinationals have suspended nonessential travels within, to and from West Africa including Nigeria. The Ebola outbreak in Port Harcourt, Rivers State he said, is a delicate location for Nigeria, hinting that location expats, who are on 21 days on and seven days off are at risk. “Insurance premium will increase for oil sector expatriates.
The regional traffic, which accounts for approximate 20 per cent passenger traffic is evaporating. Only five West African countries are affected but they are in the middle”.
Tag-along flights like ASKY network carriers, Ethiopian Airways, British Airways, Emirates, Kenya Airways, among others, are badly hit, with outbound traffic out of Nigeria to Europe, Asia and the United States put at 90 per cent, while outbound back of the cabin was put at 70-80 per cent. Rewane hinted that second quarter 2014 shows strong gains by US airlines, while there is decline in Asia/Pacific due to cargo weakness. He however, expressed optimism that that air transport volume would continue to expand in 2015. New Telegraph
