Codeshare agreements elude Nigerian Airlines stunting growth

by | February 5, 2018 12:35 am



A lack of extensive codeshare agreements with foreign partners is stunting the growth of Nigerian airlines.
Codeshare is an interline partnership where one carrier markets service and places its code on another carrier’s flights. This offers carriers an opportunity to provide service to destinations not in their route structure.
Under the ‘code share’ agreement which is common in the international aviation sector, the originating airline and the supporting airline agree on a formula for sharing the ticket cost.
Local airlines have accused foreign airlines of not wanting to codeshare with them but prefer the option of flying to multiple destinations. They say the absence of this arrangement has continued to result in long waiting hours, botched trips and failed appointments for local air travellers.
“We are quite open to codeshare arrangements with foreign airlines operating in Nigeria. In fact, that has been our advocacy for many years. We have always maintained that foreign airlines operating in Nigeria should be limited to one or two points in Nigeria. If the flight terminates in Lagos or Abuja, then domestic airlines they codeshare with can lift their passengers to their final destinations. In that case, the passengers would purchase a single ticket,” Chris Iwarah, Corporate Communications Manager Air Peace told BusinessDay.
Iwarah explained that the disposition of the foreign airlines operating in Nigeria, however, appears to be opposed to this sort of arrangement, as they seem to prefer the option of flying to multiple destinations and this development cannot be in favour of the codeshare initiative.
“Codeshare is part of the arrangements for our proposed international flights. This is the approach we expect foreign airlines operating in Nigeria to embrace, but they appear to have a different agenda. So, we can confirm our interest in code sharing with our foreign counterparts, but we can’t compel them to tag along,” he added.
Muneer Bankole, managing director, Medview airline also told BusinessDay that his airline is open to code share with foreign airlines, especially as they have continued to get complaints from passengers abroad of not being able to access payment platforms to buy domestic tickets.
BusinessDay’s checks show that none of the eight operating domestic airlines in Nigeria have codeshare arrangement with foreign airlines.
However, Tayo Ojuri, an industry expert and Chief Executive Officer, Aglo Limited, aviation support service told BusinessDay that foreign airlines’ have stringent terms and conditions for code sharing which most domestic airlines are not abiding to.
Ojuri said the first condition domestic airline must fulfil before they can attract partnerships with foreign airlines is when they belong to global alliances such as the Star alliance, One World alliance and SkyTeam alliance but none of Nigeria’s airlines are in these alliances.
Star Alliance, Oneworld, and Skyteam now comprise 62 member airlines, which represent more than 50 percent of global capacity and generate more than $380 billion in revenue annually. Passengers and airlines across the world have built a level of confidence in airlines belonging to these alliances.
“Code share is a function of service level agreements. If I am code sharing with you, the services which I give to my passengers is what I expect you to give when I give you ticket to carry my passengers. If an airline often cancels or delay flights, no foreign airline will want to code share with such airline,” Ojuri said.
“There are also concerns on remitting the required amount to the receiving airline as at when due, safety records and the type of aircraft airlines operate,” he added.
Kenya Airways has an extensive codeshare agreement with Etihad, helping the East African Airline advance its 10 year growth plan and position Nairobi as the Eastern African hub.
In a bid to expand network through North America, Europe and India, Delta Airlines started code share with Jet Airways and KLM.
Emirates code shares with Bangkok Airways available on Thai routes and other South East Asian destinations. The airline also code shares with Flybe available on UK destinations.
Domestic airlines can realise over N31.5billion naira from ticket sales if they are able to codeshare with other foreign airlines, BusinessDay’s findings show.
A document obtained from Nigeria Civil Aviation Authority, (NCAA) shows that 30 operating foreign airlines in Nigeria airlifted 3,575,542 passengers in 2017. Within the period, 1,750,184 were inbound passengers while 1,825,358 were outbound passengers.
Experts in the aviation sector told BusinessDay that amongst all inbound passengers in Nigeria, at least 50percent of them still continue their journeys from Lagos or Abuja to other states in the country. This implies that at least 875,092 passengers will still travel within the country. If domestic airlines charge a minimum of 100dollars for ticket sold, then the airlines will realise over $87,507,200. With an exchange rate of N360 to a dollar, this will amount to N31.5 billion.

 

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