High cost of running an airline, other bane of the aviation industry
President of the newly formed Aircraft Hangar Owners Association of Nigeria, Engineer Isaac Balami has identified a lack of unity among domestic airline operators and the high cost of running an airline in an unfriendly environment without government support as the bane of the aviation industry.
Speaking with our correspondent in an interview, Engineer Balami said that it is very rare for two or three airlines to come to work together.
According to him, “you see three airlines taking off at the same time with five-passenger each and they cannot say let us merge and they cannot say let only one person go, because of pride and lack of unity.
“It is not their fault, also, sometimes you want to collaborate and partner with somebody and the person would want to take advantage of you, sometimes you agree on a code-sharing formula, some people will default and that takes us back to what we are talking about, national culture, corporate culture, you can’t give what you don’t have.”
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Highlighting challenges facing the industry, he said: “To have a sustainable airline or national carrier you must have a world-class maintenance facility. There are airlines that are doing well with their two, three aircraft, managing their life, they went for C-check and they couldn’t come back because of forex, the airline went down.”
He added that there are airlines today that stopped flying to Dubai like Arik, they couldn’t compete with Emirates because the government couldn’t subsidize fuel the way the Dubai government was subsidizing Emirates Air.
“You are buying fuel in Nigeria at one and your competitor Emirates competing with Arik on the same route, is buying aviation fuel for 15 cents… 75 per cent difference on the amount you buy fuel in your country. How do you compete? At some point, if you ask, they will tell you Emirates did not make a profit for so many years. I don’t know about now but the country never saw it that Emirates was set up to make a profit, they know the people that are on transit, do free duty shopping, they know the people that go into Dubai visa-free and they get visa within 24 hours and they go into hotels and they pay VAT and people don’t default in remitting the VAT to the government.
“By the time you put those things, duty shops, clothing, people go to buy houses, people stay in apartments and everybody pays tax, what happens? The country is making it. I am not talking about Emirates making a profit alone. That is when there is a chain reaction understanding. But when you have a country where the government has not done enough in the last 30 years to support, no matter the capital you are injecting into your operations… yes, corporate culture, corporate governance is a major problem.”
By Chukwuemeka Iwelunmo, Lagos
