By Patience Chat Moses
The Nigerian aviation industry is a dynamic sector that portrays the country’s economic and social landscapes. Two primary business models exist within this industry: Low-Cost Carriers (LCCs) and Full-Service Airlines (FSAs). Each model offers distinct and unique services while battling challenges in the competitive Nigerian market.
LCCs focus on providing affordable air travel by offering basic services with minimal frills. These airlines reduce operational costs by simplifying services, such as offering; no complimentary meals as food and drinks are available for purchase by passengers, limited baggage allowance or additional fees for extra baggage, direct booking through online platforms to avoid intermediary fees, and point-to-point routes to avoid layovers and reduce costs.
LCCs aim to make air travel accessible to a broader segment of the population by offering lower fares. This strategy has democratised air travel in Nigeria, allowing more people to fly who might not have been able to afford it otherwise. Examples of Nigerian LCCs include Dana Air, Green Africa Airways, and ValueJet.
On the other hand, FSAS provide a more comprehensive and luxurious flying experience. Their services typically include; complimentary in-flight meals and beverages, larger baggage allowance as part of the ticket price, multiple travel classes e.g., Economy, Business, and First Class, connectivity through hub-and-spoke systems for international and domestic connections, amenities like lounges, in-flight entertainment, more flexible ticketing policies etc.
In Nigeria, Aero Contractors, Air Peace and Arik Air are considered full-service airlines. They aim to attract both leisure and business travellers who value comfort and additional services.
Battle for Survival: Why the Drama?
As LCCs and FSAs struggle to operate, the regulatory framework of the Nigerian aviation sector happens to be one of their biggest hurdles. Both models are burdened with multiple taxes and fees, which impede airline profitability. Additionally, economic issues like currency devaluation and infrastructure deficits complicate operations. ‘
The rising cost of aviation fuel and difficulties in accessing foreign exchange for maintenance and other expenses have also strained both LCCs and FSAs. These financial pressures have led to operational challenges and, in some cases, the suspension of services.
Furthermore, LCCs and FSAs strive to retain passengers amidst service reliability issues and competitive pressures. Building and maintaining customer loyalty remains a significant challenge. FSAs face stiff competition from international airlines operating within Nigeria, which often have more extensive networks and resources. They also face competition from the LCCs. As Nigeria battles with economic instability, travellers are opting for more pocket-friendly airlines.
Despite their cost-saving strategies, LCCs in Nigeria face high operating expenses, particularly due to volatile fuel prices and maintenance costs. The scarcity and high cost of aviation fuel, known as Jet A1, have been significant hurdles.
Navigating Nigeria’s complex regulatory landscape, which includes multiple taxation and bureaucratic hurdles, adds to the operational challenges of LCCs.
While LCCs have thrived in other regions, such as Europe with airlines like Ryanair, the Nigerian market presents unique challenges that have hindered similar success. High operating costs and regulatory complexities make the LCC model less practical in Nigeria.
What then is the way out of this struggle?
Streamlining taxes and reducing bureaucratic obstacles could enhance operational efficiency and financial viability for LCCs and FSAs. Investing in aviation infrastructure would also help address some of the operational challenges faced by airlines, improving service reliability and customer satisfaction. Collaborations instead, of competition between LCCs, FSAs, and international carriers could provide opportunities for shared resources and expanded networks, contributing to the industry’s overall sustainability.