Experts in the air travel space have called on owners/managers of indigenous carriers to scale up their act in order to extract the burgeoning opportunities beckoning the global aviation partnership value chain which generates over $52 billion in revenue annually.
Global carriers operating under interline agreements gross over $52 billion yearly from tickets sold to passengers booked by carriers on the partnership network.
Investigations by The Nation revealed that part of the steps needed to attract the right foreign partners for either airline interline, code sharing, joint ventures, and other models of cooperation by Nigerian carriers include securing international certification and a rejig of business and operational models in order to meet globally competitive templates.
Last week, Emirates Airlines and Air Peace signed an interline agreement to link 13 Nigerian cities.
Experts say other carriers could latch onto that to secure partnerships with foreign carriers operating into Nigeria.
Speaking in separate interviews, Principal Managing Partner, Avaero Capital Partners, an aviation consultancy firm, Sindy Foster; aviation industry analyst and Chief Executive Officer of Centurion Security Limited, Group Captain John Ojikutu (rtd); and former Rector, Nigerian College of Aviation Technology (NCAT), Captain Samuel Caulcrik, said there is a lot Nigerian carriers could do to tap into opportunities in the revenue-spinning global partnership value chain.
Foster said: “Nigerian airlines seeking partnerships with foreign carriers need to demonstrate reliability and quality—including consistent performance and efficient ground operations.
“The airlines should have a complementary network that offers additional routes to complement the larger airline network, including behind and beyond traffic, to expand their network reach.”
Foster said indigenous carriers need to establish and demonstrate strong financial and administrative practices, which include transparent revenue management and efficient settlement processes, such as participation in the IATA clearinghouse.
She said, “Having a strong positive brand that is focused on customer satisfaction makes for a more attractive partner. Having a strong market presence and the ability to engage in joint marketing efforts helps to increase visibility and demand.
“Partnership of any kind requires confidence in regulatory compliance, financial stability, and cultural and operational compatibility.”
Ojikutu said as much as seeking foreign partnership will drive the growth of indigenous carriers, the government should put in place appropriate measures to avoid invasion into local routes.
He said, “I have said repeatedly that if we cannot get access to the BASA routes, we must restrict the foreign airlines to either Lagos or Abuja and not anymore to Lagos and Abuja for any of them.
“They can get a second choice from the alternative geographical location to the airport of their first choice. The aim is to restrict the foreign airlines access to the domestic market routes. The foreign airlines should, however, be encouraged to interline with the domestic airlines to transfer international passengers transiting to and from other airports to the airport of their international departure and return.
“Fares for such interlining passengers should be paid in dollars to the domestic airlines by the interlining foreign airlines. This arrangement can improve the traffic to some of the airports we see today as unavailable.”
Caulcrik, on his part, said local carriers need to address issues of reputation in transactions with foreign partners.
He said, “One of the biggest hurdles Nigerian carriers face is securing trust from foreign air carriers for those crucial interlining connections. The aviation industry is a heartbeat of seamless cash flow, supported by a robust network and reliability.
“Think about it: for smaller airlines, timely payments are the lifeblood that keeps their wheels turning. Unfortunately, Nigerian carriers often find themselves in a tough spot when it comes to building trust due to concerns surrounding ticket revenue repatriation.
“But fear not! There’s a game-changing solution on the horizon: a clearing vehicle to ease the revenue repatriation process. This would empower Nigerian carriers to showcase their creditworthiness and reliability, ultimately winning the confidence of foreign airlines.”
Caulcrik said Nigerian airlines could tap into the IATA centralized billing and settlement system to boost their business transactions.
He said, “This innovative platform would streamline the flow of funds between airlines, making transactions smoother than ever.
“Nigerian carriers could look out for AFRAA’s clearing house service. Nigerian carriers can leverage this fantastic resource, paving the way for a seamless account settlement among member airlines and proving their credibility in the process.
“Nigerian carriers could craft solid bilateral agreements with foreign air carriers. These agreements would clearly outline the terms for interlining connections and ticket revenue repatriation, fostering a strong foundation of trust.
“How about engaging specialized third-party settlement services? Collaborating with banks or aviation experts could be the key to facilitating swift ticket revenue repatriation!
“By implementing a reliable clearing vehicle, we can banish concerns about revenue repatriation to the past, forge trustworthy relationships with foreign air carriers, and elevate Nigerian airlines to new heights in the global aviation arena.”
SOURCE: THENATION
