Good business plan, antidote for Nigerian airlines’ total collapse

AS Nigeria’s airlines prepare to resume partial operations on June 21, 2020 after almost three months of suspension of flights due to the outbreak of Coronavirus pandemic, many thoughts must definitely be running through the minds of the operators.

Such thoughts must definitely include: how to operate under the new safety measures put in place by the federal government, how to include the measures that are hitherto strange to passengers’ boarding on flights, sitting arrangements amongst others.

As expected, all the airline operators will need to have a rethink on the type of aircraft that is suitable for the domestic operations they are only allowed to begin with into five of the airports across the country.

Again, the airlines will not just want to resume operations for the fun of it, therefore, under the tough measures they are asked to recommence flights, the operators must obviously be putting on their thinking caps now on how to restore confidence to the flying public and still make little profit after all.

By now, most of the domestic operators must have realised that airline business is no longer business as usual. In other words, the business is no more for money bags but for those who really understand the intricacies of airline business.

Without doubt, any airline that wants to remain in good business after coronavirus pandemic will have to pay more attention to their business plans which prior to now had been said to lack the critical components that should position many of the airlines for profitability.

Top of such poor business plans include: the use of wrong equipment on wrong routes, diversion of airline funds to other areas and in some cases poor ownership structures which have greatly contributed to the abysmal performances and short life span of the airlines.

While all the previous calls to the domestic airlines to review their business plans had fallen on deaf ears, any of them that still want to continue in this line despite the effect of COVID-19 is surely on its way to self extinction in view of the tough times awaiting airline business due to the disaster wrought on global airline business by the pandemic.

As the resumption of flight activities bounce back in ten days’ time, more key players have started drawing the attention of the airline operators to the urgent need to revisit their business plans.

Joining in reminding the operators of the importance of a good business plan was  the Chairman of the African Business Aviation Association (AfBAA) cum President & Chief Executive Officer of African Aviation Services, Mr. Nick Fadugba who has recommended that the Nigerian airlines needed to revise their present business plans.

According to the international airline financing consultant, “the airlines should this time around focus on unit cost, load factor and yield citing the example of Ethiopian Airlines ‘Vision 2025 Strategies Road Map.”

Other priority areas Fadugba wanted the operators to look into include: the need to “raise more equity and working capital to strengthen their balance sheets; abide by aircraft finance and lease obligations or re-negotiate, rather than default, and seek professional advice on aircraft acquisitions.”

Fadugba, reminded the operators the importance of co-operation in key areas such as joint training, aircraft Maintenance, Repairs and Overhaul (MRO), spares pooling, joint operations, interlining, code-sharing, and win-win partnerships.

Before the outbreak of COVID-19, many key players had expressed their discomfort with the watery business plans of many of the domestic airline operators which contradicted the business mode plans adopted by airlines across the world which have been found to be responsible for their successes.

Not going too far, the case of a fellow African carrier, Ethiopian Airlines is a success story which has been made possible by the good business plans put on ground by its management. The success the airline had recorded has continued to make it the number one on the continent.

The survival and success of any Nigerian carrier after the COVID-19 pandemic shall definitely depend on its willingness to heed this clarion call of putting together a good business plan which is working for the profitable airlines like Ethiopian, Emirates, British Airways, Delta amongst others.

 

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