September 28, 2020
Clickongh

Nigeria’s local airlines risk collapse as load factor declines

Exactly a week after commercial airlines resumed flight services on Lagos-Abuja route, local airlines are struggling to sustain operations and meet cost as load factor hovers around 40 per cent.
The day-one optimism of about 70 per cent traffic across some of the local carriers has waned. Some of the operators complained about traveler apathy, attendant low patronage and imminent collapse without government support.

To cover cost of operation and improve traffic flow, local airlines have urged the Federal Government to fast-track the release of bailout funds and reopen international routes.

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Experts warned that reopening international airspace must be accompanied with removal of the mandatory 14-day quarantine directive for returning travelers if the sector must attract the desired patronage.

The Guardian on Tuesday learnt that operators had continued to operate the same number of flights similar to the opening day schedule, though contrary to the plan to gradually increase number of flights weekly.

Flight movement within Lagos, Abuja and Port Harcourt yesterday confirmed low patronage. For instance, Air Peace flight P47196 on Lagos-Port Harcourt, had 10 passengers outbound and 34 on the inbound. Arik Air flight AW3740 on the same route had 28 passengers on the outbound and 49 for inbound.

Aero Contractors’ NG381 flight on Abuja-Port Harcourt had 28 passengers on outbound and 49 for inbound. Dana Air flight 0341 on Lagos-Port Harcourt had two passengers on outbound and 13 for the return leg.

With load factor (occupied seats per total availability on a flight) ranging between 15 and 50 per cent – depending on airline, route, flight and time – operators are struggling to meet cost.

On fuel alone, which accounts for between 30 and 40 per cent of the entire cost of operation, a local return trip on Boeing 737 airplane takes between N1 million and N1.5 million, depending on supplier and ground location. One of the local operators said they could not even recoup cost of fuel flying Lagos-Abuja route with only 48 instead of 120 passengers onboard.

“A colleague told me he just departed with about 45 passengers on a plane that sits 150 persons. At N30, 000 per traveler, he almost left with nothing after paying for fuel and some of the sundry charges. That is a lot of money gone down the drain because of low patronage. But passengers would not understand this and you cannot afford to keep delaying them.

“We know it is going to be this tough, which was why we demanded for palliative from the Federal Government. The airlines can manage for a while, but definitely not for long. The likely fate is scary,” the operator said.

Spokesman of Arik Air, Banji Ola, said the traffic was just picking, though very slow. Compared to an average of 60 per cent load factor that the airline started with last week, Ola said Arik was still within the 50 per cent benchmark, with three flights on Lagos-Abuja route per day.

Managing Director of Aero Contractors, Capt. Ado Sanusi, said the airline’s average load factor was between 15 and 30 per cent – a far cry from a commercial aircraft’s breakeven limit. Sanusi, however, said that “the modest traffic” was expected at the early stages of resumption after three months of COVID-19 induced lockdown.

“We got what we expected. We didn’t expect the airlines to start with 50 per cent load factor. That is how it is all over the world. We only hope that the flying public will still have the confidence to fly with us again,” Sanusi said.

In a recent survey conducted by the International Air Transport Association (IATA), at least three in every 10 air travellers vowed not to fly anytime soon over possible coronavirus infection during travel.

The finding showed that a lot of the travelling public were still wary, demanding that both operators and governments should do more to restore confidence.

Indeed, travelers are taking precautions to protect themselves from COVID-19, with 77 per cent saying that they are washing their hands more frequently, 71 per cent avoiding large meetings and 67 per cent having worn a facemask in public. Some 58 per cent of those surveyed said that they have avoided air travel, with 33 per cent suggesting that they will avoid travel in future as a continued measure to reduce the risk of catching COVID-19.

Travelers identified their top concerns, which include being in a crowded bus/train on the way to the aircraft (59 per cent), sitting next to someone who might be infected (65 per cent), queuing at check-in/security/border control or boarding (42 per cent), using restrooms/toilet facilities (42 per cent), using airport restrooms/toilet facilities (38 per cent) and breathing the air on the plane (37 per cent).

Spokesperson of Dana Air, Kingsley Ezenwa, said the flying public needed a lot of awareness to understand that the cabins, in compliance with High Efficiency Particulate Air (HEPA) filter protocol, are now safer than most open places.

Ezenwa confirmed that the passenger turnout had not been fantastic. He said: “We are managing what is on ground in the market. We cannot be burning fuel unnecessarily. That is why real-time planning and decisions by our team of commercial experts are guiding our operations.

“We are doing our part. We expect the government to also do its part and cushion the industry with bailouts to help the airlines survive these difficult times,” Ezenwa said. Chairman, Airline and Passenger Joint Committee (APJC), Bankole Bernard, said the safety consciousness among travelers was expected, but they would get over it with time, and the traffic would once again surge.

In the interim, Bernard solicited that international flights should resume almost immediately after the testing of domestic flights, describing local and foreign flights as complementary.

“Maybe, government can open international flights in two weeks’ time. Remember that Nigeria is an import dependent country. So, our people need to travel out to be able to bring in their goods. We really desire that international flights resume on or before the end of the month to complement the domestic carriers. The international flights feed the domestic as well,” Bernard said.

The international airlines, under the aegis of IATA, however, urged governments in Africa and the Middle East (AME) to implement alternatives to quarantine on arrival to allow economies re-start while avoiding importation of COVID-19 cases.

The airlines observed that government-imposed quarantine measures in Nigeria and other 35 countries across Africa and the Middle East (AME) account for 40 per cent of all quarantine measures globally.

With over 80 per cent of travelers unwilling to travel when quarantine is required; the impact of these measures is that countries remain in lock-down even if their borders are open.

IATA’s Regional Vice President for Africa and the Middle East, Muhammad Albakri, said it was critical that AME governments implement alternatives to quarantine measures.

“AME has the highest number of countries in the world with government-imposed quarantine measures on arriving passengers. The region is effectively in complete lock-down with the travel and tourism sector shuttered. This is detrimental in a region where 8.6 million people depend on aviation for their livelihoods,” Albakri said.

Source: Business