Green Africa Airways: Will Nigerian Aviation Industry Survive the Disruption?

Green Africa Airways: Will Nigerian Aviation Industry Survive the Disruption?

Green Africa Airways, a Nigeria-based airline startup, is revving up plans to disrupt the fragile Nigerian aviation industry. The company on Tuesday announced irresistible airfares for different routes in the country, and it has rattled existing airline operators who in the wake of COVID-19, made 100% increment in fares of domestic flights.

Founded in 2015 by Babawande Afolabi, who is also the CEO, Green Africa Airline has unveiled to the excitement of the Nigerian public, airfares slashed by 50%. Their operation which is scheduled to kick off on June 24 focuses firstly on selected domestic destinations including Abuja, Port Harcourt, Akure, Ilorin, Enugu and Owerri.

The company fixed the fare for these destinations, which as of April were N50,000 and N60,000, at N16,500. It says it offers a single class product to customers, charging for only what they need.

However, while jubilation has greeted the development, the question remains: will the Nigerian aviation industry survive the disruption?

As of December 2020, Nigerian airline operators were considering merger as COVID-19-induced strains grounded aviation activities, pushing them near bankruptcy. The Director-General of the Nigerian Civil Aviation Authority (NCAA), Capt. Musa Nuhu said then that merger was the only option the aviation industry had left, as government bailout intervention was not forthcoming.

“The COVID-19 pandemic exaggerated a bad situation; some airlines may not survive but the industry will come back better. It has always gone through crisis but has come back better. It has always gone through crisis but has come out stronger. The Airlines Operators of Nigeria are coming together to see what they can do to help the situation and they met with me. The industry will be different altogether.

“I am sure a lot of them will see changes in their model. I won’t be surprised there would be merger activities around airlines to reduce cost and survive,” he said.

Local airlines were said to be indebted to NCAA at the tune of N22 billion as a result of decline in flight activities around the country. Arik Airline laid off as much as 300 workers as the situation became a bit harder. There was growing despair among the operators as the industry’s survival rested solely on lifting of the flight ban.

However, in July 2020, when the authorities finally lifted the domestic flight ban, the cost of air tickets skyrocketed due to many factors, including foreign exchange and COVID-19 protocols that reduced the number of passengers each flight should carry.

Nuhu said the airlines carry their maintenance out of the country and it is done in foreign exchange. So they needed to raise enough money to service their aircrafts.

The 100% price hike thus became the bitter pill airline passengers have to swallow to keep the Nigerian aviation industry alive.

With its accumulated debt and low patronage, the aviation industry’s recovery is expected to take longer period. It is not yet up to a year. Green Africa’s emergence with crashed airfares means that other operators in the industry will be forced to return to pre pandemic flight fares.

For instance, Air Peace Airline, one of the biggest airlines in Nigeria, has reportedly reduced its fares across some destinations like Ilorin, and Abuja. The airline slashed the airfare from Lagos to Ilorin from N52,500, which some airlines charged last month, to N32,700. Also, the fare from Lagos to Abuja has dropped from N60,000 (in April) to between N23,000 and N29,000.

While the sustainability of Green Africa’s disruption is under question, given that foreign exchange among other things have since gone up, Afolabi appears to be leveraging cheaper-to-maintain aircrafts (propellers) that use 40% less fuel, to target the middle and lower end of the market.

It costs nearly N16,500 to travel by road with some premium bus transport companies, to the destinations of Green Africa. With the current security situation of the country, many travelers will find it easy to switch to the airline from June 24.

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