News Details

Lagos-Johannesburg was one of the best routes for South African Airways (SAA) because of the high yield and the boom in business activities between Nigeria and South Africa. The crowding of the route by Air Peace and ASKY is potentially turning it into loss-making. Visa issues, jet fuel hikes, and forex hiccups have forced Air Peace to make a retreat. WOLE SHADARE examines what is playing out on the route

Once a juicy route

The Nigeria-South African route was regarded as a lucrative route and one that was considered good for South African Airways (SAA) such that the carrier could not joke with as it ensured it kept servicing for a very long time.

The efficiency of SAA before it was hit by management and financial crises made it the first choice for travelers to South America, particularly Sao Paolo and so many cities in Brazil and beyond.

At that period, SAA enjoyed exponential growth on the route as it was the sole operator from Lagos, Abuja to Johannesburg and points to many Southern African cities as there were no tough visa constraints and other difficulties associated with air travel. It was a time many economies boomed unlike what the world is currently going through which has been worsened by the Russia-Ukrainian hostilities.

Africa’s visa crisis

African countries remain closed off to each other, making travel within the continent difficult. Africa is one of the regions in the world with the highest visa requirements.

This situation is even more restricted for Africans traveling within Africa, as compared to Europeans and North Americans.

SAA

Route crowding

The beginning of flights in December 2020 to Johannesburg by Nigeria’s flag carrier airline, Air Peace broke the decades-long ‘monopoly’ of the lucrative route even though Air Peace did not pose much threat to SAA because the Nigerian carrier until recently when it suspended flight services to the Johannesburg owing to visa problems, jet fuel hike and forex issues only did point to point operations and it is doubtful if it has a codeshare agreement with any other Southern African airlines to take its passengers to point beyond the gold city.

During the Covid-19 pandemic, air travel suffered considerably. African airlines’ operations were comatose. Restrictions were in place and the South African route was about the last to re-open due to a fresh outbreak of Omicron.

The re-opening of Nigeria and South Africa’s airspace coincided with the period SAA was coming back from an 18 months hiatus that threatened its existence. The airline has been flying to Nigeria for the past 24 years and the resumption of the service December last year was a welcome addition to its growing continental offering.

To worsen the situation for SAA and Air Peace on the route, Ethiopian Airlines strategic partner Asky began flight operations to the Southern African nation on May 1, 2022.

The commencement of the Lagos-Johannesburg route is curious because the carrier is not a Nigerian registered carrier, and nor is it from South Africa as the granting of the flight right is equally curious and yet to be known under what traffic freedom.

There are indications that the Lome-based carrier could be doing that under the fifth freedom traffic right which allows an airline to carry revenue traffic between foreign countries as a part of services connecting the airline’s own country. It is the right to carry passengers from one’s own country to a second country and from that country onward to a third country (and so on).

The commencement of operations had brought to three the number of airlines servicing the Johannesburg route to three with dominant South African Airways with its strong connection from its Johannesburg route, Air Peace which operates point to point to the gold city from Lagos and now ASKY which dominance in the West Africa’s sub-region could make it a force to be reckoned with.

Scramble for market share

These three airlines would battle for huge market share on the route and they are battling seriously to remain on the route.

The battle is seriously pointing in a direction that could force them to cut their weekly frequencies or at best rethink their business plan until things normalize.

Air Peace while suspending its operations to Johannesburg said it would suspend its flight service to Johannesburg due to the high cost of aviation fuel and the inability of Nigerians to secure visas to South Africa. Many

Nigerian carriers’ battle to stay afloat

Many Nigerian carriers including Air Peace are seriously struggling since the war in Ukraine broke out to fuel their aircraft due to the skyrocketing price and scarcity of jet fuel. Many of the Nigerian carriers are heavily indebted to aviation fuel marketers and get their supplies on a cash and carry basis.

This is further compounded when Air Peace discovered a very poor load factor occasioned by the delay by South Africa’s High Commission in Nigeria to issue visas to prospective applicants due to the High Commission’s internal challenges that have slowed down the issuance of visas to many who desire it.

To further nail the coffin of many of the country’s airlines including Air Peace, the difficulty in getting Foreign exchange to run their international operations could force the carrier to permanently quit the route if the situation is not resolved quickly.

SAA too

SAA is also going through its own fair share of visa issues and is considering a lot of measures to cut down its frequencies to Nigeria to about three.

ASKY

There are more Nigerians that travel to South Africa than South Africans that travel to Nigeria. Since South Africa Airways started operating in Nigeria, most South Africans travel with the airline, and many of them, being top officials of multinational companies in Nigeria travel business class. The yield from the Business cabin makes up for good revenue even if the Economy cabins are empty.

Aside from South Africa, many nations are putting restrictions on visa issuance to Nigerians below the age of 30; a situation that has reduced the number of people who travel out of the country and by extension reduce airlines’ load factors.

Expert’s view

An airline operator who spoke to Aviation Metric said the issue of visas that made Air Peace suspend operations to Johannesburg is not totally to the advantage of SAA, stressing that the Southern African carrier is equally feeling the heat too because many people who wanted to fly with the airline are not getting a visa or are denied a visa; a situation it said may have hurt businesses badly for the two carriers.

He however stated that Air Peace’s problems are more because of the spike and difficulty to get jet fuel and the Forex crisis that are even more dangerous to the international operations of an airline than jet fuel and visa problems. Of the three, ASKY may have lesser problems because of a strong backup from Ethiopian Airlines and relatively strong financial footing including ‘stealing’ of traffic from Nigeria to Johannesburg.

African airlines

Last line

What is playing out now shows that a route that was hitherto considered lucrative is more or less becoming a loss-making route and it remains to be seen how the three carriers wriggle out of the visa issue and others that threaten their continued stay on the Lagos-Johannesburg route.

Popular Post

Archives

Categories

Instagram post