Aviation In West Africa: The Winners And The Losers
West Africa has a population of over 300 million people within 15 countries, having over 40 airports with the largest economies in Africa. Yet there is no strong airline and no airport hub in West and Central Africa.
East Africa has two hubs in Nairobi (Kenya) and Addis Ababa (Ethiopia), while South Africa has the massive Oliver Thambo International Airport in Johannesburg.
The hub concept
To establish a hub, there is a need to first have an airport that has a good transfer desk and transit section with transit Visa or Visa on Arrival.
You also need an airport with cheap aviation fuel. You will need an airport with Maintenance Repair and Overhaul (MRO) facilities. You would also need an airline to drive the hub.
As of today, no airport in West Africa has all the needed ingredients to be a hub. Ghana has moved fast to claim the spot. First, it offered Visa on Arrival to all Africans starting from July 1. Secondly, it reduced the cost of aviation fuel by 25 per cent. But the MRO and strong airline is missing.
Ghana is making up for the absence of a strong carrier by issuing 5th Freedom Rights to other airlines to carry passengers from Accra. It has given this right to South African Airways (SAA) to fly to Washington D.C. last one year. It has also given the same rights to Kenya Airways for Freetown; TAP Portugal to Sao Tome; Air Maroc, Egypt Air among others.
Lome (Togo) is also giving Accra a good fight. It has a strong airline, ASKY, and cheap fuel, but no Visa on Arrival and no MRO. Lagos (Nigeria) that naturally should be the hub is huddled with operational difficulties and other issues.
Nigeria has a large pool of international airlines, strong domestic carriers but very expensive and not readily available aviation fuel. It lacks MRO capacity and does not have very easy immigration environment. So the options are often for the airports in West Africa to connect all the dots.
Unsuccessful national carriers
With such a huge population and vibrant economies, it is an irony that West Africans depend on others to move around.
But things haven't always been like this. Nigeria Airways, Ghana Airways and Air Afrique were major players, which collapsed with the era of the International Monetary Fund induced devaluations and age old mismanagement. Today, 80 per cent of all traffic in West Africa is carried by non African carriers and about 15 per cent by non West African carriers.
Only ASKY is really profitable, having declared a US$2 million profit for the first time in five years of operation. But ASKY is partly owned and operated by Ethiopian Airlines out of Lome, Togo. The other airline making a difference is Ghanaian Airline Africa World Airlines (AWA), but that is also partly owned by Chinese giants HNA. Air Cote d'Ivoire also has international interests in Air France.
The biggest airline in West Africa is privately owned Nigerian Carrier, Arik, but it also has issues with debts owed banks and Nigerian agencies but it’s still the first choice for travelers in Nigeria because of its young fleet and extensive network in the region.
Recently the lucrative Accra-Lagos route with about 10 daily flights collapsed leaving only AWA and Arik as survivors. AWA had struggled on the Lagos route since it started flights there two years ago. Eventually, it settled for four flights a week until recently when the collapse of three Nigerian competitors Dana, AERO and a scaled down flights by Medview, AWA increased flights to Lagos from four to 10 weekly flights, stepping into the gap.
Today, an economy ticket from Lagos to Accra is between US$200 and US$300 on Arik, depending on whose exchange rate you are using. The bottom has finally fallen out of the once lucrative Lagos-Accra market.
As Arik and Medview are now the only regular Nigerian carriers on the route, complemented by the growing Ghanaian carrier AWA.
The biggest winner on this route is turning out to be the Ghanaian carrier AWA. It had applied the right equipment, an Embraer 45, and changed schedules many times to find the right spot and timing.
It has established a smart schedule integrity for its evening flights, always leaving almost on time. Now with the forex crisis in Nigeria and AWA’s price stability, its only disadvantage which was the fact that most Nigerians don’t like small planes, has turned into an advantage as Arik sometimes uses CRJ, a small craft. Arik because of its multiple connections and network is also thriving.
AWA would be the first Ghanaian carrier to survive the brutal competition on the Lagos Accra route. Other attempts by Antrak in the past failed woefully.
The over-supply of available seats on the route helped depress the market, coupled with shrinking economic activity in Nigeria. Dana had started daily evening flights to Accra with an MD 83 aircraft to join Medview that has a daily morning flight using a B737-400.
Arik flies twice daily with a B737-700 next generation aircraft and Aero twice daily with a B737-500. There were flights by ASKY from Lagos via Lome to Accra using a Dash 8 and now a B737-800. There are daily flights from Abuja by Arik to Accra.
Outside Lagos, Abuja and Port Harcourt (all Nigerian cities), considered sweet routes for Nigeria airlines, it was a bragging right for an airline to initiate a flight to Accra. But with a supply of over 1,500 seats daily, the competition has become intense.
Aero has proven to be the most resilient of all Nigerian carriers, in spite of being accused of lacking courage in its formative years. It is the oldest airline still flying in Nigeria today.
It was a competitor to Virgin Nigeria on the Accra route when it started in 2004. Arik joined later and had since prospered on the route. The was a Bellview Airline cash cow before its collapse.
But it is also the graveyard of many airlines. Antrak and Chanchangi are good examples.
Surviving the Accra route
When a Nigerian airlines thinks it has matured it heads to Accra and when they lose out on the route they eventually collapse. There is no airline that lost on the route that eventually survived. It’s usually a sign of tough times for the Airline.
But in this situation, the problem is the near collapse of the Nigerian economy in the last one year. If foreign airlines are pulling out of Nigeria because of the forex crisis, how many Nigerian airlines will be left standing by the end of this year.
The signs are there for all to see, the passenger is now paying more than three times the cost of a 50 minutes flight. It might get worse as the market shrinks.
The prices will go up unless there is an increased supply of seats by one of the other airlines in spite of what AWA has added.
Ikechi Uko is a travel business consultant, travel promoter, tourism development expert, journalist and media consultant. He is the organiser of Abuja Bantaba and Akwaaba African Travel Market, the only international travel fair in West Africa. Email: firstname.lastname@example.org