The negative effects of COVID -19 pandemic on Nigeria’s air transport value chain has continued to threaten investment in passenger/cargo, ground handling , catering and allied operations. At a virtual seminar, experts offer recipe on strategies to drive the sector’s growth CHUKWUEMEKE IWELUNMO reports.
Experts in the aviation sector have canvassed a rejig of business models and operational strategies needed to rescue the industry from current challenges triggered by COVID -19 pandemic.
They said the ravaging effects of the pandemic continues to hurt the aviation sector resulting in job losses, low returns on investment, suspension of scheduled domestic travels , a significant dip in revenues and low morale among industry personnel.
If the sector must rebound, experts say a raft of measures such as financial stimulus package by the government ; adherence to slot allocation system to be introduced for airlines and investment in information technology by airport authorities and operators as jet drivers.
Speaking at a webinar organised by Aviation Media titled: ” Nigeria’s Aviation Industry : Changing Times, Changing Strategies “, Group Managing Director, Nigerian Aviation Handling Company (NAHCO) Plc, Mrs Olatokunbo Fagbemi said government has a huge role to play in driving the sector towards sustainability by providing financial palliatives for airlines, ground handling companies and other players to recover and get off speedily.
Affirming that palliative remains critical to airlines’ survival post-COVID-19, Mrs Fagbemi urged prospective beneficiaries to weigh deeply the conditions attached to such offers.
She said:” Palliatives are a way to help airlines recover and get off speedily, it is a good thing. However, it is important that airlines know under what conditions these palliatives are granted to them. While advocating resilience and collaboration among operators the handling companies and other stakeholders need to survive, she stated that the airlines need to carry ground handling companies along with in terms of schedules in order to achieve a common goal.”
The NAHCO GMD said ground handling companies had made investments ahead of reopening of the airport but queried how such funds would be recovered.
She said despite the challenges COVID -19 has triggered in the Nigerian aviation sector, the pandemic will also create opportunities for airlines. Fagbemi said airlines should think out of the box by deploying appropriate pricing for airfares to drive their sustainability.
Fagbemi said smart airlines need to adopt yield management system in their route planning and fare structure to maximize passenger capacity on their airplanes.
The NAHCO boss urged indigenous airlines to diverse into cargo air operations, which could yield significant revenues if they render time-sensitive services. Besides, time-sensitive services, Mrs Fagbemi said lower charges and fares for cargo will increase the revenue net of indigenous carriers which were yet to tap into limitless opportunities in cargo business.
She said:” Though the Corona Virus pandemic has created distortions in the aviation sector it also could bring in its wake windows of opportunity. This is the time for airlines, ground handling companies to think out of the box.
“Significantly, airline business could be profitable if managers adopt appropriate pricing of fares to achieve yield management. This will assist the airlines to handle the fare structure of passengers in the aircraft and how to run profitably.”
“Airlines needs to rejig their strategies and embrace the proposed slot allocation system to be introduced by aviation authorities. This appears the best policy that will adjust operate maximize their time and improve their on-time performance.
“This will assist to ensure there is schedule reliability for all flights and to reduce to the barest minimum delayed flights usually packaged under the excuse of operational reasons.
“Airlines could delve into cargo business within the country at reduced prices to attract ferrying of goods. But the service must be time-sensitive. “If cargo arrives in good time it could trigger patronage by people who had hitherto considered air travel and cargo elitist.”
Also speaking, Principal Managing Partner of Avaero Capital, Sindy Foster canvassed more investment into the sector.
She said there is need to upgrade infrastructure upgrade affirming that though the sector has been clobbered by the pandemic there still exists opportunities.
Foster said : “The industry needs to attract investment. Investment in aviation is important and it is the responsibility of everyone in the industry to make the industry attractive. Meaning there must be corporate governance in every aspect of the industry and majorly airlines and the negative publicity needs to stop. Foster also canvassed the capacity to develop cargo, stating that broadening that market has huge potential.
She said:” There is a need to extend the airport operations and lay some more emphasis on cargo, broadening cargo is the right way to go as many goods go through our roads and 60 per cent of cargo are lost on these roads. We need to do something to attract flying cargo with the right pricing.”
Also speaking, Director General, Nigerian Civil Aviation Authority (NCAA) Capt Musa Nuhu said airlines, ground handlers and other players in the sector will attain success if they abide by the slot allocation system proposed for the sector when domestic flights restart.
He said the NCAA was carrying out an audit on airlines to ascertain their financial health as part of the newly introduced protocols designed for the restart of flight operations.
The NCAA boss urged the airport management to work hard to ensure that the slot allocation system proposed for indigenous carriers comes to fruition.
On his part, Managing Director, Federal Airports Authority of Nigeria (FAAN) Capt. Hamisu Yadudu said the authority will continue to collaborate with airlines and industry regulator as well as ground handling companies and other players to achieve success with the slot allocation system.
He said:” We will strive to ensure that there is strict compliance with the slots allocated to airlines. Good slots management will achieve a lot for effective management of the terminal space for safe flight operations.
Also speaking, Chief Executive Officer, Accident Investigation Bureau (AIB), Akin Olateru called for a review of strategy in operational procedures and investment in technology for operators in the sector to ensure sustainability as part of the learning curve from the COVID – 19 pandemics.
On his part, President, Aviation Safety Round Table Initiative (ASRTI) , Dr Gbenga Olowo urged the airport authority to recalibrate its facilities and processes at airports to reduce friction associated with flight operations.
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Olowo called for proper identification of domestic airport terminals in Lagos according to identification codes recognized by the International Civil Aviation Organization (ICAO).
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