Lagos Murtala Muhammed Airport

Nigeria's government talks of rebuilding a failing airline industry in 2013. But the path is unclear

Nigerian aviation industry is at its lowest ebb in 20 years following a year that saw a crash kill 163 people, the collapse of a major airline and a domestic financing ban on the country’s two remaining largest carriers, one of which was also temporarily grounded by industrial action allegedly over outstanding debts.

Faced with a market that has been reduced to an effective duopoly between Arik Air and Aero, along with the associated very high air fares and often systemic corruption, the Nigerian Government is talking of pulling out the stops in 2013 to encourage more investment in the scheduled aviation sector – including fast tracking registration of four new unidentified airlines and the establishment of a new national carrier.

Both these initiatives were to have been fulfilled by the end of 2012, but have failed to meet the deadline.

West Africa movers and shakers: Air Nigeria shuts down; EgyptAir and South African look to expand

The once-sleepy market in west Africa continues to prove dynamic, even if occurrences are two steps forward and one step backwards. In the category of the latter, once promising Air Nigeria has suspended operations after a high profile few months that included staff strikes, rumours and two groundings by the regulator. Political interference was thrown into the mix, with a police raid over taxes unpaid from a previous owner. The airline leaves a gap in the high demand Lagos-London market as well as domestic and regional routes.

The situation is more stable in Ghana, whose smaller market but stronger regulations have attracted new carriers. And more may be on their way: South African Airways wants to establish a regional hub in Accra as well as export its lower-cost units in a bid to have a pan-African network. EgyptAir has proposed investing in a small Ghanian carrier to further its reach, a growing sign that Africa will see robust competition rather than the obscure and surprise announcement in 2010 from EgyptAir, Ethiopian Airlines and SAA to seek broad cooperation with each other.

British Airways' new route to Monrovia will strengthen oneworld’s position in western Africa

British Airways (BA) is stepping up its presence in western Africa with a new service to Monrovia Roberts International Airport commencing 05-Nov-2012. Currently only two European airlines operate to Liberia’s capital, Brussels Airlines and Air France, and BA’s new service will indubitably challenge the leading position of Brussels Airlines in the small but high yielding Europe to Liberia market. 

Transfer traffic from the US contributes notably to the load and profitability of European services to Liberia, and British Airways with its extensive trans-Atlantic network is well placed to capture a sizeable part of this market. BA's new flight to Monrovia will tag-on to the existing flight from London Heathrow to Freetown in Sierra Leone, which is a former bmi route and is presently operated twice a week with A330 that BA inherited from its acquisition of bmi. BA will operate the new London Heathrow-Freetown-Monrovia route with a smaller capacity Boeing 767-300ER in a three class configuration with 189 seats.

First tranche of United 787 routes to put aircraft’s mission to the test

United’s planned initial international destinations for its Boeing 787 widebodies will be a crucial test to prove out the concept of the aircraft’s optimal mission of long, thin routes as Asia features prominently in the first crop of routes the carrier plans for 787 operations. The deployment on some of United’s European routes will also allow the carrier to put its theory of using the 787 to manage seasonality throughout its network to the test.

Delivery of the first of 50 Boeing 787s to United is scheduled for Sep-2012. United’s acceptance of the aircraft will mark the first delivery to a US carrier, with six aircraft deliveries planned for the remainder of 2012. All Nippon Airways (ANA), Japan Airlines (JAL) and Ethiopian Airlines are now operating the aircraft, and South American airline group LATAM is scheduled to accept its first 787 in late Aug-2012.

South African Airways ends Cape Town-London service for bigger growth in West Africa and beyond

Cyclical downturns can disproportionately affect end of line carriers since they have few opportunities to pull traffic for long-haul flights, as has been seen with Qantas and to a lesser extent Air New Zealand. But now South African Airways (SAA) is feeling the pinch and will end from 16-Aug-2012 its London Heathrow-Cape Town service after over two decades of operation.

As with Air New Zealand and Qantas redistributing some capacity from competitive intercontinental routes to less competitive and higher-yielding regional markets, SAA intends to expand capacity to the healthy west African markets of Abidjan, Accra and Lagos as well as open longer routes to the healthier markets of Mumbai and Perth.

SAA has not previously encountered challenges the way ANZ and Qantas have, a result of South Africa taking a more restrictive approach to air service agreements, SAA being able to fly non-stop to key markets and there is limited sixth freedom competition from other African carriers.

A diverging West Africa: Ghana finds over-capacity while Nigeria struggles with too little

Only 402km apart, Accra and Lagos could not have more different aviation markets. Accra has found itself with excess capacity, and consequently Brussels Airlines and United Airlines are withdrawing their respective services from Brussels and Washington DC while Delta Air Lines will reduce overall capacity. Meanwhile in Nigeria, the country's lack of capacity has become a national discussion after the Government threatened to suspend British Airways (BA) and Virgin Atlantic for having expensive fares. But the focus has shifted to the Government and its unwillingness to liberalise air service agreements, which are operating at the maximum for UK carriers, as well as its lack of support for a homegrown aviation industry.

This month Air Nigeria will commence Lagos-London services, adding to the market and further utilising Nigerian capacity to the UK, raising the chances of Nigeria being willing to expand its air service agreement with the UK, which has seen little change since 1999. There are 14,000 weekly seats from Ghana to Europe and 33,000 from Nigeria to Europe, despite Nigeria having a population and GDP five to six times larger. The potential in Nigeria is waiting to be unlocked by a government that in the Corruption Perceptions Index ranks 143rd out of 182nd most corrupt nations.