The LinkedIn Summary: If you are a customer of the Nigerian aviation sector, you would have noticed that we have a new category-king in the commercial aviation sector: Air Peace. When Arik Wings got its wings clipped and Aero Contractors lost its contracts with Nigerians, Air Peace brought calm.
In this piece, I explain how Air Peace became a category-king NOT through disruption. Simply, it was doing things right at small scale and when its main competitors lost focus, it filled up the space.
The Nigerian aviation has that history. New leaders rarely emerge because of innovation. Rather, the incumbents cratered and a new one takes over. You know none would be king for more than 7-10 years before success gets into their heads or they give up. Because of that, the industry has not advanced for decades. And service remains poor because at any time, there is an asymmetry (except the brief Arik-Aero duopoly).
I am hoping that Air Peace would flourish to break that jinx. We need durable companies. When we have Air Peace, Arik, Aero etc all strong, customers win and our commerce and industry benefit. That capacity to have on-going rivalry is what drives better customer service. Our aviation has not given Nigerians that experience.
If you are a customer of the Nigerian aviation sector, you would have noticed that we have a new category-king in the commercial aviation sector: Air Peace. When Arik Wings got its wings clipped and Aero Contractors lost its contracts with Nigerians, Air Peace brought calm.
Yes, Air Peace was well positioned and it took advantages of the crises in its main competitors. But what happened in the sector was not new: Nigeria has a history of creating new kings across industrial sectors but largely because of mistakes of sector-leaders. In other words, you do not have to disrupt anyone to become a leader; you build capabilities and position yourself to fill up the space as competitors lose visions. That is a weak spot in our economy: innovation is not the core element that creates new leaders. Rather, the old leaders just quit!
That is unfortunate. Nigeria does not have a good history in succession in our elite businesses. From the empires of Nnanna Kalu to MkO Abiola, when the arrow heads depart, bad things usually happen. Or simply, when the leaders become very successful, arrogance takes over. Over time, the business goes.
It turns out that there is a framework for exploiting those opportunities. Air Peace offers that. Despite the fact that it was small in the golden days of Arik and Aero, it was doing many things right. But many ignored it because Aero was simply unbeatable. But as the leaders cratered, Air Peace emerged, demonstrating competence through accumulated capabilities. Nigerians noticed and then beautified it.
Notice that other airlines could not exploit the opportunities created by Arik and Aero. Yes, most did not demonstrate capabilities even when small. But Air Peace, from day one, showed it could be a leader. Largely, even when opportunities come through non-disruption, you must be ready. Being ready means you have the abilities to step forward and fix a massive business friction in the market.
As I had explained in the free range chicken, growth can come through non-disruption by looking at opportunities where competitors have not discovered. But note that in Nigeria, even in your sector, due to indiscipline of our business community, that chicken may be right in the clan.
In business we like to talk of disruption. Disruption is a word that is used in any strategy document. To grow, you have to disrupt the incumbents by setting a new basis of competition which will help you to take market share from them. The digital camera innovators disrupted companies like Kodak who built their businesses on thin film photography. The digital camera firms introduced new technologies which the old guys could not overcome, and they became mortally wounded. In Nigeria, we have seen the old powerful banks like First Bank and Union Bank live under the shadows of Zenith Bank and GTBank which used information technology to redesign Nigeria’s banking sector. The market capitalizations of these banks make that disruption very evident.
Yet, it is not always necessary for a company to disrupt for it to grow. To explain that disruption is not always required for growth, I will use free-range chickens, found in most African villages, to create an analogy. A free-range chicken “is a bird that is allowed constant access to the outdoors, with plenty of fresh vegetation, sunshine and room to exercise”. As a teenager, I grew some and it was a very good business.
I continue to hope we would have an economy where Arik, Aero, Air Peace and others are competing instead of new champions coming through non-market anchored disruptions. Yes, without disruptions, we would not really improve resilience and serve customers better. In other words, we are having new champions who may not have innovated themselves to the top. The aviation sector is showing that it cannot have the same leader for a decade. That is a pattern which can drive a business model, even though it is unfortunate.---
Click to join Tekedia Capital and build Next Africa with min of $10,000 co-investment in startups.