African Airlines’ Passenger Traffic Crashes by 65% Over Omicron, Others
The International Air Transport Association says African airlines’ passenger traffic has fallen by 65% due to the increasing impact of the Omicron variant of Covid-19.
A new report by IATA, the global airline body, said traffic in the region fell by 65 percent in 2021. IATA report read in part,
“African airlines’ international traffic fell 65.2 per cent last year compared to 2019, which was the best performance among regions. Capacity dropped 56.7 per cent, and load factor sank 14.1 percentage points to 57.3 per cent. Demand for the month of December was 60.5 per cent below the year-ago period, a deterioration from the 56.5 per cent decline in November, owing to the impact of government travel restrictions in response to Omicron.”
IATA Report 2021
The IATA full-year global passenger traffic results for 2021 indicated that demand (revenue passenger kilometers or RPKs) fell by 58.4 per cent compared to the full year of2019.
This represents an improvement compared to 2020, when full year RPKs were down 65.8 per cent versus 2019.
The report also noted that international passenger demand in 2021 was 75.5 per cent below 2019 levels. Capacity, (measured in available seat kilometers or ASKs) declined by 65.3 per cent, while load factor fell 24.0 percentage points to 58.0 per cent
Domestic demand in 2021 was also reported to have gone down by 28.2 per cent compared to 2019. Capacity contracted by 19.2% and load factor dropped 9.3 percentage points to 74.3%.
Total traffic for the month of December 2021was 45.1 per cent below the same month in 2019, an improvement from the 47 per cent contraction in November, as monthly demand continued to recover despite concerns over Omicron.
IATA’s Director General, Willie Walsh, said, “Overall travel demand strengthened in 2021. That trend continued into December despite travel restrictions in the face of Omicron. That says a lot about the strength of passenger confidence and the desire to travel. The challenge for 2022 is to reinforce that confidence by normalizing travel. While international travel remains far from normal in many parts of the world, there is momentum in the right direction. Last week, France and Switzerland announced significant easing of measures. And yesterday the UK removed all testing requirements for vaccinated travelers. We hope others will follow their important lead, particularly in Asia where several key markets remain in virtual isolation.”
NCAA Reads Riot Act on Predatory Pricing, Unhealthy Rivalry Among Airlines
The Nigerian Civil Aviation Authority has read a riot act on alleged predatory pricing in local airfares and unhealthy practices that lower operators’ chances of survival and viability of air travel services.
The apex regulator’s warning was on the heels of emerging complaints on price cuts by some airlines, especially the low-cost carriers. The strategy attracts better patronage, but is perceived to be injurious to both cost of operations and other airline operators.
The NCAA said airfares are closely monitored and those in violation of standards and regulations would be dealt with accordingly.
Following the spike in local airfares during the festive period when one-hour economy flight tickets sold for an average of N100, 000 per seat, some airlines have deployed promo fares that sell for an average of N20, 000 on some routes.
The Guardian investigation showed that at an average cost of N30, 000 per flight ticket, it is almost impossible for commercial airlines to fully cover the cost of operations, run efficient services and make profits despite huge capital investments.
The illogicality of free-fall of prices amid foreign exchange liquidity crisis has also caught the attention of experts that blamed the NCAA for the alleged anti-competition practices.
Secretary General of the Aviation Safety Round Table Initiative (ASRTI), Group Capt. John Ojikutu (rtd), recalled that tickets to Abuja and Port Harcourt in the 90s were between N3,800 to N4,000 ($100) when the green back exchanged for N40.
“For any airline to be charging less than $100 to these destinations, in a depressed economy as we have now, makes no economic sense to me. Today at N550/$, we are importing aviation fuel and we are selling tickets for an average of $50/60.
“I wonder what the business plans of those airlines are and if the NCAA’s Directorate of Air Transport Regulation (DATR) ever surveys their business plans before the start of operations. The question is when did the responsible government authority carry-out economic audits on all those operators, including the government-owned ones?” Ojikutu queried.
Director-General of the NCAA, Capt. Musa Nuhu, said it was up to the airlines to do its finances and economics to determine a reduction of airfares.
Nuhu noted that there are several justifications for airfare review but it is the NCAA’s responsibility to ensure they comply with all standards and regulations.
“To me, it will be foolhardy to shoot yourself in the leg by cutting your airfares to the point that you are no longer profitable or break-even. For us, if we see trends or indications of them trying to cut corners, then we will do a full economic audit of the airline to ensure they comply with that. There are many indications to show an airline has issues, but there is nothing so far,” he said.
The Nigerian Civil Aviation Regulations (Nig. CARs) though empowered airlines to initiate ticket prices; the operators have maintained the same price range of an average of N35, 000 till date. A Lagos-Abuja flight, for instance, retains the average price of N35, 000 at N550/$1 today, the same price sold when exchange was N160/$1 in 2015.
The implication is that at an average cost of N30, 000 per economy class ticket, multiplied by 120 passengers on a B737 aircraft, it gives aboutN3.6 million per flight. At least N800, 000 to N1 million of the sum goes to fuel and another N1 million plus goes to sundry charges and taxes. So, the airline is left with about N1 million to cater for maintenance and personnel among other obligations.
Source: The Guardian