3 May 2013

Nigeria: World Will Have 12 Airlines in 2050, Say Experts

Aviation industry experts have declared that economic downturn, insecurity and other uncertainties would drastically affect international air transport as only 12 international carriers would survive the situation. They also noted that the African continent would be bereft of airlines because the existing ones have refused to engage in merger and survive.

Industry stakeholders who made these observations at a recent Nigeria Aviation Summit, said despite that the merger and consolidation have gained ground in the global aviation industry, airlines in the continent are still foot dragging on the concept, which they said commenced in the United States of America (USA) in 1930.

President of Sabre Network, West Africa, Mr. Gabriel Olowo, in a paper titled, "A Dozen World Airliners by 2050," emphasised that Nigerian and African airlines face serious trouble if they do not embrace merger and consolidation.

He explained that the revenues of the three biggest airlines in the continent, Kenyan Airways, Ethiopian and South African Airways, which he put at over $3bn is just about 35 per cent of the annual revenue of Emirates Airlines.

According to him, all efforts to ensure merger and consolidation among the continent's carriers had failed in the past, but stated that merger or consolidation could not be achieved by government coercion.

He expressed regret on the precarious situation of the Nigerian airlines, stating that there are only 57 aircraft in the fleet of the carriers in the country while an airline like South African Airways had over 67 aircraft in its fleet.

"Nigerian airlines are at the bottom level of success. The six airlines that we have in operations are in the lowest rung of the ladder in terms of revenue, service delivery and good business model.

"Business climate is shifting from the West to Africa, when that shift comes; the continent's carrier may be caught napping", he said.

In a speech, one of industry stakeholders, Dr. Tony Kila, noted that for the continent's carriers to remain in operations by 2050, they needed to engage in training of its manpower, stressing that people travel for business and pleasures and wanted total satisfaction.

Also speaking, the Managing Director, Overland Company, Edward Boyo, observed that Nigerian airlines would remain behind in global aviation industry unless they cooperate in the form of merger and acquisition, which he said was the norm globally.

He said: "Mergers enable growth, increase the market shares, increase values for customers, increases credit worthiness for the airline and enhance market perception of the airlines. However, merge cannot be done by government coercion. It has to be marriage of willing parties and there should be trust."

The former president of the National Association of Nigerian Travelling Agencies, NANTA, Mr. Soji Amusan, on his part, emphasised that customer satisfaction, quality services, productivity, remarking that profit and cost control would not happen by themselves, but the stakeholders in the industry would have to make them happen.

"The level of team work among people determines the success or otherwise of the company. There are about 35 training schools in Lagos alone and out of these numbers, only six are certified by IATA despite the claim of the schools that they were approved by the government", he said.

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