How COVID-19 crashes aviation businesses in six months

The first quarter of the year 2020 will be best described in the aviation industry as a calamity. It was projected at the start of the year 2020 that the year will be a year of change was in the air travel even as familiar challenges continue to demand attention. But the year had not been too good in the first quarter of 2020 for the aviation industry in Nigeria.

The year started with so much promise in what later turned out to be most likely going to be the most difficult year for airlines and the sector generally.

The problems worsened in the second quarter with a faint hope that the fortune of the industry would improve or get near pre-COVID-19 period when life was a little bit bearable.

Air travel was expected to be better than 2019 or to continue in that trajectory, but the twin problems of flight disruptions occasioned by harmattan haze that disrupted flight travel and ridiculed the nation, coupled with coronavirus outbreak which threw airlines and global aviation into turmoil.

Early January, foreign airlines and Nigerian carriers started experiencing flight diversions as a result of harmattan haze that swept across many parts of the country.

Aviation, probably more than any other mode of transportation is greatly affected by the weather. From thunderstorms to reduced visibility due to hazy conditions, every phase of flight has the potential to be impacted by weather.

Nigeria, Ghana and other West African countries are some of the places in the world where harmattan haze still brings flight operations to a halt.

The trend has become wearily familiar. As a result, the Nigeria Civil Aviation Authority (NCAA) issued weather alerts to all pilots, indicating hazards associated with harmattan dust haze in flight operations at this period of the year.

Commercial aviation in Nigeria must deal with these adverse weather effects. The cost is a significant budget item. It is one of the perennial weather phenomena that have an adverse impact on flight.

Fledging market Nigeria has a relatively fledging domestic aviation market, which is constrained by high tariffs, high fuel costs, relatively low load factor and limited routes.

A typical domestic operator’s Direct Operational Cost (DOC) per flight can range between $3,000 for a regional jet type aircraft with a seating capacity of 50-70 passengers to Abuja and $4,000 for a similar flight to Kano.

Direct costs due to weather on airline operations can be separated into several categories – diversion, cancellation and delay.

The Enugu airport reconstruction appears to be the most important airport project apart from the plans by the Federal Airports Authority of Nigeria (FAAN) to complete the Lagos international airport terminal that has dragged on for so long. President Muhammadu Buhari had, late last year, approved N10 billion for the repair of the Akanu Ibiam International Airport, Enugu.

The precarious state of the airport led to its closure, a development that was welcomed by many people. It was long overdue, to forestall accident.

In fact, the Enugu airport should long have been closed for total overhauling of decrepit facilities. In the true sense of it, the aerodrome has nothing to qualify it as an international airport despite billions of naira that were reportedly spent between 2008 and 2014 that many believed was not well spent.

But, for now, a good job has been done to raise the airport to its true status of an international airport, rather than the decrepit state the facility was allowed to degenerate.

Work done on total overhaul, according to the Federal Airports Authority of Nigeria (FAAN), had reached 90 per cent completion.

The outbreak of coronavirus has reset the clock on a decade-long aviation marginal improvement, which have now been thrown away, no thanks to coronavirus. Airspace has been opened, but there’s no known time when people will be willing to take to air travel in large number.

Experts anticipated waiting at least six months before taking to air travel. An industry that is intimately familiar with failure confronts a crisis unlike any other. Airline operators say they have no idea when passengers will return.

Yet, devastating as the downturn has been, the future is even bleaker. Even when people start flying again, the industry could be transformed, much as it was after the September 11 terrorist attacks.

And airline executives need only look in the not distant past to see how lesser crises sank carriers that were household names like Pan Am and Trans World Airlines.

The current crisis could push Nigerian airlines into bankruptcy. Carriers may initially entice weary travellers with discounts, but if they can’t fill up flights, they may resort to raising ticket prices.

Poll after poll has shown that the vast majority of people are likely to wait on the sidelines for quite some time.

“The airlines certainly need to get back into business, but they’re going to be facing a public that’s going to be scared to travel,” chairman, Airline Operators of Nigeria (AON), Capt. Noggie Meggison said. “I think a lot of people all over the world are going to be wrestling with fear and trust,” he added. With so much out of their hands, airlines have focused instead on what they can control.

The age-long controversy between FAAN and its numerous concessionaires came to the fore few weeks ago.

The controversy is as a result of the plan by the Federal Government to concession four airports that have reached advanced stages of handling by the private sector.

Aviation unions, workers and other ‘concerned’ stakeholders took the Minister of Aviation, Hadi Sirika, to task over the manner the Federal Government is modifying the concession of the four major airports across the country.

The unions, made up of National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), Association of Nigeria Aviation Professionals (ANAP) and Nigeria Union of Pensioners (NUP), FAAN branch, at a joint press briefing said they would ensure the grounding of activities in the sector should government go ahead with the planned concession of Lagos, Abuja, Kano and Port- Harcourt airports.

They also threatened to resist the attempt by the Federal Government to concession four of the aerodromes in Nigeria, describing the procedure for the concession as not transparent.

Ocheme Aba, Secretary-General, National Union of Air Transport Employees (NUATE), alleged that while the Project Delivery Team (PDT), which includes the ICRC was still discussing the issue of Transaction Adviser (TA), the minister was on the air announcing the approval of FEC of a TA and his fees.

With all clear, the minister is expected to proceed to seek the approval of the Federal Executive Council (FEC) for his proposed Outline Business Case (OBC) for the project.

The precarious state of the country’s airports, particularly the Murtala Muhammed Airport, Lagos has encouraged many to support the government’s plans for concession.