As Foreign Airlines Withdraw Their Services From Nigeria
When the company I worked for informed me that I would be travelling to Italy for a two-week course, Alitalia readily came to my mind. And as I boarded the Alitalia’s Boeing 767 at Lagos airport, I felt different kinds of emotions, which were all good. It was my first time on any Alitalia flight; it was my first time on the Boeing 767; it was my first flight on any widebody plane; and in fact, it was my first international flight.
So when in early 2015, Alitalia announced that they would stop their Lagos-Rome service, I felt a personal sense of loss and emotional detachment. The regular stories of bad economy and low patronage were all told, but what we didn’t know was that Alitalia’s exit was the genesis of the exodus.
Following Alitalia’s footsteps, Spanish Airline, Iberia on May 12, 2016, suspended its flight operations into and out of Nigeria. In a letter dated April 19, 2016, the airline had cited low patronage as the reason behind the flight suspension.
Barely six weeks after Iberia stopped flights to Nigeria, United Airlines in May, 2016 announced that it would stop its daily Houston-Lagos service citing dwindling passenger traffic as the reason. On June 30, 2016, United operated its last flight out of Lagos making Delta Air Lines the only major US carrier flying to Africa.
It is easy to agree with the low-load-factor story the various airlines have told, but the truth is that airlines which fly into and out of Nigeria, have been operating under a severely harsh economic environment. Local airlines have also been dying is silence.
Nigeria is the most populous country on the continent of Africa with lots of business travelers and a handful of leisure travelers. The size and magnitude of Nigeria as a travel and aviation market is so immense that low demand should be airlines’ least problem. Low patronage or low load factor does not warrant outright cancellation of flight operations, but reduction of flight frequencies.
The dwindling global price of oil has inadvertently led to unbearably low value of the Naira. This is addition to the inability of foreign carriers to repatriate their revenues from Nigeria, have forced foreing airlines to withdraw or scale down their services to Nigeria.
Foreign airlines funds trapped with the Central Bank of Nigeria (CBN) as at March 31, 2016, was about US$575 million, almost 50 per cent of which will be lost by the airlines should the federal government of Nigeria devalue the Naira.
In May, 2016, News of British Airways suspending flights to Nigeria was in the air, a rumor the airline quickly debunked. However, British Airways admitted it was struggling to repatriate its share of the $575 million that Nigeria currently owes to airlines globally from tickets sales. The airline has also downgraded its daily Lagos-London service from Boeing 747 to the Boeing-777.
The mockingly interesting thing about this drama is that while airlines are leaving Nigeria or scaling down their services, they are up gauging capacity and increasing frequencies to other African countries.
While Emirates has increased capacity to Zambia and Zimbabwe, it has reduced frequency on its Dubai-Lagos service from twice daily to one daily. As Lufthansa closely monitors its services to Nigeria, it is set to resume direct Frankfurt-Cape Town service and increase capacity on the Frankfurt-Nairobi service.
While the economic predicament in Nigeria doesn’t seem to be improving, there are no obvious indications that more international airlines will leave Nigeria. But the situation has already brought untold hardship to Nigerian air travelers and the frustration is still palpable.
In a bid to meet up, international airlines have arbitrarily adjusted their fares and stripped them of all promotions. As a result, flight tickets are now beyond the reach of ordinary travelers, making it very difficult for people to fly with many having to fly through other African countries like Ghana.
As IATA dialogues with the Nigerian government in a bid to repatriate airlines’ trapped funds and avoid a repeat of the aviation industry’s struggles in Venezuela, which owes 24 carriers $3.6 billion, we hope that the situation abates soon enough to give airlines and the travelling public some respite.