The Nigerian Civil Aviation Authority (NCAA) has expressed optimism about an improvement in the current poor passenger traffic being experienced by airlines by the time businesses reopen fully and more people travel by air.
Meanwhile, passengers scheduled to fly with Bristow Helicopters yesterday were stranded as a result of the indefinite strike embarked by the National Association of Aircraft Pilots and Engineers (NAAPE).
The hope that Nigerian airlines would be able to generate revenue that would help them rebound to sustainability is being hampered by low passenger traffic since they resumed operations on July 8.
THISDAY gathered that passenger traffic hovers around 30-35 per cent, which cannot sustain the cost of flight operations.
The Chief Executive Officer of Aero Contractors, Captain Ado Sanusi, told THISDAY that if the low traffic continues, some of the airlines would be hurt, unless the investors recapitalise or the airlines receive the expected palliatives from the federal government.
Sanusi said Aero had expected that there would be poor load factor at the beginning and had deployed few aircraft for scheduled service.
To save their operations, Sanusi said: “Airlines are discussing on how to adopt interlining and code-share so that one flight can carry passengers of different airlines from one destination to another and in that way airlines would save cost of operation and later share the revenue, as it is done in many parts of the world.
“We anticipated that there would be a low load factor. That was why we launched only three aircraft during restart. We have five aircraft. We also started with less frequency. We are now looking at how we can adjust our business strategy. This is the time the federal government should assist us with its stimulus package so that airlines will not die or downsize their workforce.
“We are also looking at interlining to assist us to boost revenue. We are already talking with Dana Air. Airlines will have no choice but to interline to save their operations. I believe it is the way forward. It is not only Arik and Aero that will run out of cash. Many airlines will run out of cash unless investors put in money. The load factor we have now cannot even buy fuel for the airlines.”
However, the Director-General of NCAA, Captain Musa Nuhu, told THISDAY that there is hope that when businesses reopen and go into a full stream, more people will travel by air.
He noted that most travel in Nigeria is business and not leisure, adding that businesses are yet to reopen fully after the COVID-19 lockdown.
Nuhu added that the load factor is not generally low, explaining that Lagos-Abuja could be low because many airlines put their flights on the route.
According to him, the airlines record-high traffic on Sundays and Fridays and also other destinations are recording above-average passenger traffic.
He said NCAA would support the plan of airlines to interline because it would help them to save money and generate more revenue in their operations, as long as the interlining or code-share does not infringe on any of the regulations.
Nuhu added that it is the prerogative of the airlines to take the decision to interline because it is a business decision that has nothing to do with economic or safety regulations.
He said: “Codeshare is not bad, but it is not something we can regulate. The airlines can agree to work with each other. There is hope that passenger traffic will rebound.
“People are just coming out of the lockdown and there is still fear in some people that they might get infected by COVID-19. Also, businesses have not started doing so well; so there will be more people willing to travel by air when business picks up.
“This is a global problem so it is not peculiar to Nigeria. We hope that with time, as the economy improves, the load factor will go up. Globally, the aviation industry is in dire straits. We are working to encourage airlines and give them whatever support we can give them. If they do well it would also boost the revenue of NCAA. So we want the airlines to do well.”
Also, the Group Managing Director of Finchglow Group and former President of the National Association of Nigeria Travel Agencies (NANTA), Mr. Bankole Bernard, told THISDAY that passenger traffic is low because the federal government has not opened the airspace for international flights that feed passengers to local flights.
He explained: “Many of the domestic airlines may go under because the passenger traffic is low, about 30 to 35 per cent. This is because they have not opened international flights, which feed local operations. Nigeria is an import-dependent country.
“We cannot go out to bring out goods; so the service of local operations depends on international flights. So the sooner they reopen international flights the better for domestic flight operations.
Passengers Stranded as Union Grounds Bristow Helicopters
Passengers scheduled to fly with Bristow Helicopters yesterday were stranded as a result of the indefinite strike embarked by the National Association of Aircraft Pilots and Engineers (NAAPE).
The union was protesting alleged discriminatory policies against Nigerian employees by the company.
A visit to the Murtala Muhammed Airport, Lagos yesterday showed that some passengers and expatriates were barred from entering the company’s facility.
But a statement signed by Bristow explained that contrary to NAAPE’s assertion that all negotiations have broken down, it remained willing and prepared to continue dialogue with the union.
The airline, however, alleged that NAAPE has elected to abandon negotiations to embark on a strike, which it described as illegal and unwarranted.
Members of NAAPE said the strike would continue until Bristow agreed to review some of its discriminatory policies against Nigerian workers.
Public Relations Officer of NAAPE, Mr. Francis Igwe, explained some of the grievances of the union to include Bristow’s proposal to suspend the conditions of service, negotiations and their deliberate subversions of established terms of the agreement with NAAPE, insistence on benchmarking salaries of national pilots and engineers to an obsolete rate of N345/$1 coupled with the recent insistence on their proposal to implement N355/$1, a rate which is not obtainable on any foreign exchange windows in the world while still paying to expatriate foreigners their full remuneration in dollars.
Others, Igwe said, included failure to train qualified persons in Airline Transport Pilot License (ATPL) and failure to fully reimburse individuals who had successfully completed their ATPL through self-sponsorship, disproportionate matching and capped reimbursement cash figures for self-sponsored pilots on ATPL with an employment bond of N30 million.
Vice President of NAAPE, Mr. Dukas Yakubu, said after several attempts to reach an agreement with Bristow, the company had failed to review some of its obnoxious policies against its indigenous workers.
However, the company said in a statement: “Bristow proposed to put a ‘pause’ on the pilots and engineers’ Conditions of Service (COS) negotiations, recognising the recent global outbreak of COVID-19, the plummeting of global oil prices and the mandatory 22 per cent OPEC cuts to Nigeria’s crude oil production – all which have had a significant impact on our business and capacity utilisation in Nigeria.
“It is important to state that notwithstanding the economic challenges in the aviation industry since the spread of COVID-19, Bristow pilots and engineers have remained the best paid in their industry and have not suffered any reduction or change in their salaries, at a time when operations have reduced by 50 per cent.
“In the 2019 agreement, the parties agreed on the relevant exchange rate at which the salaries of Bristow pilots and engineers would be calculated. In the agreement, both parties agreed on NGN345/$1 (at a time when the CBN exchange rate was NGN306/$1) with a provision for adjustment if the NAFEX rate moves in either direction by 20 per cent or more. Currently, the NAFEX rate has not reached the agreed threshold. Bristow has fully complied with the provisions of the agreement with NAAPE. By its demand, NAAPE is seeking to act contrary to the legally binding agreement it signed voluntarily.”
By: Chinedu Eze