Nigerian carriers
Nigerian carriers are wrapping up strategies to seek more participation in the global air travel partnership value chain, which the International Air Transport Association (IATA) projects to generate $67.5 billion in operating profit in 2025.
The umbrella trade association of global airlines projects a net operating margin of 6.7 for players in the air transport industry with capacity to employ 86.5 million people generating $4.1 trillion in economic impact.
Investigations showed that some indigenous carriers, including Air Peace, Xejet Airlines, Aero Contractors, United Nigeria Airlines, Arik Air, ValueJets Airlines , Ibom Air and others are exploring partnership options packaged as either joint ventures, interline agreements or code share with foreign carriers.
The new thinking by Nigerian carriers, experts familiar with the development hinted, is predicated on the drive to boost their operational capacity, push for enhanced route connectivity to improve service offering.
While Air Peace and Emirates have signed an interline agreement, allowing Emirates passengers flying into Lagos to connect : Asaba, Akure, Benin City, Calabar, Enugu, Ilorin, Kaduna, Owerri, Abuja, Kano, Uyo, Port Harcourt, and Warri with seamless single-ticket travel and simplified baggage handling.
Experts say interline agreement facilitates frictionless single-ticket travel and simplified baggage throughput, enhancing the travel experience for passengers.
Investigations further revealed that African carrier- Kenya Airways has initiated flight cooperation discussions with one of the airlines : either Aero Contractors / Arik Air managed on behalf of the Federal Government by the Asset Management Corporation of Nigeria (AMCON), under receivership.
A source familiar with the development said fledgling carrier Xejet Airlines, is deepening negotiations for a working relationship with Air Sierra Leone .
Checks by The Nation also revealed that United Nigeria Airlines is in discussion with a Central African Airline for both interline and codeshare agreement.
Industry sources hinted that Ibom Air will soon unfold its cooperation plans as it seeks to expand its flight footprints into West and Central African countries.
To achieve this, the airline is seeking to developing the Victor Attah International Airport In Uyo into a regional hub.
Speaking in an interview, Minister of Aviation and Aerospace Development, Mr Festus Keyamo said the government is creating multiple windows for indigenous carriers to deepen their operations on international scale.
Speaking during a recent visit to Keyamo in Abuja, the Namibian Ambassador to Nigeria , Humphrey Geiseb urged Keyamo to engage with domestic airlines to explore potential collaboration opportunities.
The Ambassador expressed his country’s desire to partner with Nigerian airlines to restore direct connectivity, citing ongoing discussions with Air Peace.
In his response , Keyamo expressed his support and shared a personal experience regarding the challenges of establishing direct flights in the region.
He referenced the successful Algeria/Lagos/Cameroon flight route, which was initiated after the Algerian Ambassador proposed a direct connection, despite the close proximity between Nigeria and Cameroon.
Keyamo said one of Nigeria’s fast-rising domestic carriers, Xejet, which currently operates Sierra Leone national carrier, Air Sierra Leone, could be a potential partner in this venture.
Experts in the aviation sector have variously canvassed more partnership between indigenous airlines and foreign carriers to create more revenue opportunities through passenger distribution.
Kenya Airways disclosed last week that it is open to entering into strategic partnerships and Special Prorate Agreement with Nigerian airlines.
Its Regional Manager for America and West Africa, Ngamau Stephen, said the carrier is looking forward to collaborations with Nigerian airlines which he said will enhance domestic and regional connectivity and provide seamless travel options for passengers within and outside Nigeria.
Highlighting the need for global carriers to explore partnership opportunities, IATA’s Director General / Chief Executive Officer, Mr Willie Walsh said 2025 offers prospects in the horizon.
He said: “ We’re expecting airlines to deliver a global profit of $36.6 billion in 2025. This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83 per cent , tightly controlling costs, investing in decarbonization, and managing the return to more normal growth levels following the extraordinary pandemic recovery.
“All these efforts will help to mitigate several drags on profitability which are outside of airlines’ control, namely persistent supply chain challenges, infrastructure deficiencies, onerous regulation, and a rising tax burden.”
He went on : “ In 2025, industry revenues will exceed $1 trillion for the first time. It’s also important to put that into perspective. A trillion dollars is a lot—almost one per cent of the global economy. That makes airlines a strategically important industry.
“But remember that airlines carry $940 billion in costs, not to mention interest and taxes. They retain a net profit margin of just 3.6 per cent . Put another way, the buffer between profit and loss, even in the good year that we are expecting of 2025, is just $7 per passenger.
“With margins that thin, airlines must continue to watch every cost and insist on similar efficiency across the supply chain—especially from our monopoly infrastructure suppliers who all too often let us down on performance and efficiency.”
IATA boss highlighted the broad benefits of growing connectivity, affirming that the most recent estimates show that airline employment is expected to grow to 3.3 million in 2025.
He said: “ Airlines are the core of a global aviation value chain that employs 86.5 million people and generates $4.1 trillion in economic impact, accounting for 3.9 per cent of global GDP . Connectivity is an economic catalyst for growth in nearly all industries.
“Looking at 2025, for the first time, traveler numbers will exceed five billion and the number of flights will reach 40 million. This growth means that aviation connectivity will be creating and supporting jobs across the global economy.
“The most obvious are the hospitality and retail sectors which will gear up to meet the needs of a growing number of customers.
“But almost every business benefits from the connectivity that air transport provides, making it easier to meet customers, receive supplies, or transport products.”
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