Domestic Airlines Shun Merger Despite Harsh Operating Environment

Despite harsh operating environment for the local aviation industry, which dictates economic wisdom for mergers, airlines have generally shunned such prospects. Airline operators have instead braced up to stay the course until the lot of the industry improves, which has prompted cynicism among experts.

This lethargy for mergers comes as aviation experts have continued to clamuor on the need to merge into one big entity that can boast of 30 to 50 aircraft.

But over the years, indigenous airlines have not found the need to merge due to reasons that experts attribute to personal ego.

According to the president, Sabre Network West Africa, Dr Gbenga Olowo, indigenous airlines have been advised times without number, to try and merge into a bigger airline.

Dr. Olowo who hoped that the merger option will be adopted by both the new and old airlines said, “looking at the New Year, we are mostly going to have three airlines. They look like they are coming, we don’t know how realistic that is but they appear serious. Is it going to be a plus for the industry or a minus considering COVID-19 that has shrunk the market adversely”?

Olowo, who is also the president of Aviation Round Table (ART) stated that they will continue to sensitise airline operators the need to come into one mega carrier.

Explaining further, the aviation expert added “we should never stop progress. There is the old, the new and the now and the future. That is the challenge of now. Looking at the sector, our airlines are not too strong. We have said it enough that they should merge. I hope the sense in merger will come to play with the new ones; otherwise, they will continue to parasite one another and at the end of the day, none of them may survive in another ten years given all the constraints on ground now with COVID-19 challenges and all that”.

“I hope we just don’t have airlines on paper, we want real airlines. We have been saying that we don’t want airlines with two aircraft. We want airlines with 30 aircraft and it is doable. We have been talking about this again and again. ‘Me alone’ syndrome in Nigeria has been the challenge and this ‘me alone’, ‘die alone’ will not help the sector. We need machinery that will bring these airlines together. That would make the country to be proud of two, three strong airlines in the matter of speaking”.

Corroborating Olowo’s position, President of Association of Nigerian Aviation Professionals (ANAP), Comrade Abdurasaq Saidu noted that their refusal to merge with one another is due to personal ego.

Saidu said that if not for the fact that they want to answer airline CEOs, most of them will not find it difficult come together under one big carrier.

Beyond, ego, the aviation experts also point out that some indigenous airlines have foreign interests and therefore, cannot take unilateral decisions when it comes to merger.

Saidu, however, believes strongly that it is only merger that can bring the airlines out from the present challenges most of them are facing.

He said “Airlines cannot merge because their heads want to answer CEOs. But if they can merge, it will save them a lot of economic losses, including saving fuel, better corporate governance, larger fleet and even route utilization within and outside the country”.

 

 

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