Market News

BY Okechukwu Nnodim

More investors are now showing interest in floating airlines in the aviation sector following the increasing level of insecurity on Nigerian roads.

Our correspondent gathered that about 25 investors had commenced moves to acquire Air Operator’s Certificates from the Nigerian Civil Aviation Authority.

An AOC is an approval granted by the aviation authority to an investor or aircraft operator to allow it to use aircraft for commercial purposes.

Experts said the AOC would require the operator to have personnel, assets and system in place to ensure the safety of its employees and the general public when it begins operations.

It was also gathered that the high level of insecurity in most parts of Nigeria and the fear among passengers to travel by road had led to an increase in the number of air travellers.

This and some other concerns, according to aviation operators, have caused investors to consider investments in the airline business.

The General Manager, Public Relations Department, NCAA, Sam Adurogboye, said about 25 investors were currently showing interest in setting up airlines in Nigeria.

He told our correspondent that lately about three had received AOCs and were already flying, stressing that Ibom Air, United Nigeria and Nigeria Eagle were all new entrants already operating scheduled flights.

“We have close to about 25 applications for new airlines but acquiring the AOC is a five-phased process,” Adurogboye said.

On what might have caused the attraction for investments in the airline business, he explained that the security situation on roads, among others, was a key factor.

The NCAA official said, “The truth of the matter is that business people are in business to make a profit and in this business, you do your feasibility studies; for example, someone recently sought what it entailed to establish helicopter services.

“A helicopter firm that would be servicing Ondo and Lagos states. Now the reason for this person’s business inclination was just because of the kidnappings on the roads. And so he looked at it that helicopter services from Lagos to Akure would be a good business.”

Adurogoye added, “Also we have the population and the numbers. Take a look at the number of foreign airlines that come into Lagos, Abuja, Kano and Port Harcourt. Air France lands in Lagos and Port Harcourt.

“British Airways lands in Lagos twice daily, and it comes in with about 350 to 400 passengers and these are not travellers on free tickets. So, the numbers are there.”

He noted that on the domestic routes, the number of persons flying out of the over 200 million people in Nigeria was still low in spite of what people might think.

The civil aviation regulator spokesperson said more persons needed to fly, describing the situation as an opportunity for the airlines to tighten up and attract people to fly.

He said, “It is showing that this is a sector that has opportunities that should be tapped. Remember Ethiopia Airlines is the major foreign exchange earner for that country.

“So, whether it is military or democracy, they never tampered with the structure of Ethiopian Airlines. And that airline has been doing well in the whole of Africa.

“In Singapore, the aviation sector drives their economy and they have an airline which is among the biggest in the world. So, aviation is a key sector if managed well and that the interest is coming up is a good thing.”

On the requirements for acquiring an AOC, he said, “When you apply, you go through a five-phased process. However, when the applicants apply and are given what they have to go through in the first phase, some don’t come back until after one year or two.”

An aviation analyst and member of the renowned Aviation Round Table, Olumide Ohunayo, said the desire by investors to invest