Stakeholders in the aviation industry have said that newer airlines will do better than the older ones, as they have opportunity to study the challenges in the sector before coming in.
In separate interviews with Financial Street, the stakeholders advised new airlines to review their business plans to avoid going under.
This is following the debut of United Nigeria Airline in February 2021.
The General Secretary, Aviation Safety Round Table Initiative, John Ojikutu, said “with the types of aircraft the new airlines are buying, they need to review their business plans,” otherwise, they would fail like their older counterparts.
He advised the airlines to look towards domestic cargo, since there seemed to be shortage of passengers.
“Passengers are not available as they were before the lockdown; so the option would be for the airlines to look inward for domestic cargo operations with aircraft that can lift about 20 tonnes per flight.
“Rather than buying or having only passenger aircraft, they could look for aircraft for domestic cargo operations. It would take two to three years before we get to pre-COVID passenger figures. Before then, the new aircraft would be due for periodic maintenance. Where would the cost come from? What I can see happening is another short lifespan,” he said.
According to the Chief Executive Officer of Mainstream Cargo Limited, Mr. Seyi Adewale, new airlines may already have their feasibility studies. “However, they need to hit the ground running by reviewing the viability plan and making adjustments where necessary.”
Adewale advised new airlines to start signing agreements with state governments, large corporates and government Ministries, Departments and Agencies that have large projects requiring them to move assets and personnel.
“Also, the new airlines must be very prudent with cash generated in the first two years, to prepare them for C-checks and other high maintenance costs. They may consider hedging as an option to manage sudden shocks in aviation fuel cost,” he added.
For Francis Igwe, the National Public Relations Officer, National Association of Aircraft Pilots and Engineers, fingered finance as one of the major challenges facing the sector.
“I feel these new airlines may do better because they may have studied the environment and known the challenges before coming in. But in the regulatory point of view, everyone is qualified to own an airline, as far as you have what it takes; it doesn’t matter if you are a graduate or not.”
According to him, what matters in the sector is the economic qualification and not how educated the owner of the airline is.
Igwe, nevertheless, stressed the need for a stronger policy to move the sector forward.
“The sector looks at the economic qualification and not education.
“Policy is another area. In the aviation sector, We have well-articulated policies, but the implementation is bad. In whatever we do, the regulatory body should be totally independent,” he added.
