African Airlines Not Benefiting Economies Of Scale- Fadugba

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Yemisi Izuora 

Global aviation consultant and Chief Executive Officer, African Aviation Services Limited, Mr. Nick Fadugba has identified reasons why most African carriers are not benefiting from economies of scale.

According to Fadugba many of the carriers are small and weak, with a Fleet size of less than 10 aircraft, adding that they have weak balance sheets and frequent management changes which adversely impacts on their long-term planning.

Fadugba in a paper, titled, “Key challenges facing African airlines”, delivered at the 22nd Aviation journalists’ seminar held in Lagos stated that the continent’s carriers have limited market access, decrying the lack of implementation of The Yamoussoukro Decision.

He lamented that navigating the the Murtala Muhammed International Airport, Lagos to the domestic wing is very cumbersome considering that there are no light rail or efficient and effective transport system that link the two terminals.

He also took a swipe at the $500 million yet to be completed terminals in Lagos, Abuja, Kano and Port-Harcourt, noting that that of Lagos does not connect to the the one currently in use.

But industry observers agree that government has shown commitment to airport development but it is yet to meet the needs of airport infrastructure and called for greater commitment of funds to modernise airport facilities.

Observing that government may not be able to provide the needed funds, they said that government must initiate policies that would encourage the private sector to invest in airports.

 They also called for reviewing of existing regulations to remove hindrances to private sector participation in the development of airport infrastructure.

He reiterated that government of today in Nigeria needs to take urgent action to rescue Nigerian aviation industry, stressing, “When we look at the infrastructure in Nigeria, aviation infrastructure, it is far behind where we need to be. And we need to aspire to the global standard of excellence”.

He urged the Nigerian government to take the Singapore aviation model and the Dubai aviation model to develop the sector.

“In Singapore and Dubai, the government have harnessed aviation as a tool for economic development. Deliberately, decisively, they have taken aviation that, this is what is going to develop our economy”.

“We are talking about Dubai, is it as big as Lagos? Singapore, I am sure you can fit it in Lagos state. If there is no aviation will we be talking about Dubai? We would not be talking of Singapore if not for the amazing aviation industry. It is a hub in Asia, a major hub.

“Dubai of course is a major hub in the Middle East and, yet they built it with nothing that we have in terms of the population. What is the population of Singapore? In Nigeria, we have 180 million people of entrepreneurs; and I am talking from the board chairman to the market woman or man. They are all business people, they fly. I have been at Murtala Muhammed Airport and profile passengers, young men and women travelling going to China. It is amazing. It is marvellous. I do not see it in South Africa, he added.

He noted that there is absolutely no reason why Nigeria should not have two or three thriving airlines, noting that the country has the aviation product in terms of passengers and cargo demand.

“I do not believe sincerely that Nigeria need more than maximum, three large airlines. We can have niche airlines”.

He stated that instead of the carriers complaining about government all the time, he urged the carriers to work together to the maximum possible, hinting that he wants to see a more practical, achievable cooperation.

“If you look at other airlines in other countries, they work together. It is only in Nigeria that we all trying to kill each other, all the airlines. The thing is that, foreign airlines are taking advantage of the Nigerian airlines’ lack of cooperation. They can see what we are doing and will think we are not wise”.

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