Can state owned airlines develop airport hubs?

Can state owned airlines develop airport hubs?

INTRO : Is there any relationship between airlines and the development of airports into hubs ? Last week's acquisition some Bombardier airplanes by Akwa Ibom State  for its airline - Ibom Air has triggered a debate in the sector, on  what prospects the carrier  holds in developing the Victor Attah International Airport, Uyo into a regional hub for flight services and aircraft  repairs in  West and Central Africa, KELVIN OSA - OKUNBOR, reports.

Across the globe a huge debate is growing on the role airlines play in developing some airports into regional hubs. Whether such carriers are publicly or privately owned has not detracted from their place in delivering effective airport hubs.

Across some regions of the world, some airlines including British Airways; Emirates;  Qatar Airways; Lufthansa German Airlines, and KLM have assisted in  developing  effective hubs around London Heathrow in the United Kingdom ;  Dubai and Doha in the Middle East as well as Frankfurt and Schiphol Airport in Europe.

Africa is yet to develop effective airport hubs compared to other regions of the world. Efforts by Nigerian carriers to develop strong hubs in Lagos, Abuja, Port Harcourt , Kano and Enugu is yet to achieve the desired results.

To close this gap, some state governments that have built airports in their domain are making frantic efforts to keep the terminals busy.

This, some experts say has  driven  the Akwa Ibom State Government, a few years ago  to set up  Ibom Air to drive the development of the Victor Attah International Airport in Uyo, the state's capital.

 The drive , experts say is in line with advocacy by   International aviation bodies  including - International Civil Aviation Organization (ICAO), International Air Transport Association (IATA) and Airports Council International (ACI), which continue to push for  the complementarity of airlines and airports in  developing  the global air transport industry.

What precisely is an airport hub?

Airline hubs or hub airports, according to IATA, Director General and Chief Executive Officer, Alexander De Juniac  are used by one or more airlines to concentrate passenger traffic and flight operations at a given airport. 

According to  Juniac , they  serve as transfer or stop-over points to get passengers to their final destination. They  are  part of the hub-and-spoke system in global aviation.

According to the global Centre for Aviation (CAPA), the world’s top 20 international airports by  2025 will mostly reflect hub connectivity expansion.

According to the centre, there are  a variety of factors that influence the evolution of airports;  listing them to  include : 

overall air travel growth and economic expansion which generally has   larger impact on traffic at such  airports.

Besides, the centre said geographical  positioning constitute an  important determinant of an airport hub's effectiveness.

Case for Akwa Ibom Air

To underscore the relationship between airlines and development of airport hub, the 

Akwa Ibom State Government  about two weeks ago  took delivery of three Bombardier jets for the state's carrier christened  Ibom Air. 

Akwa Ibom is the the first state  in Nigeria to launch  commercial airline business.

The state's aim,  its governor Udom Emmanuel  said  is to create thousands of direct and indirect jobs for the  airline.

This , he said  will  enhance acquisition of improved  skills for  the people of the state who would benefit from aeronautical training  for pilots, engineers, cabin crew and other professionals.

Emmanuel said two of the Bombardier CRJ 900 series aircraft from Canada  arrived the Victor Attah International Airport, Uyo about two  week ago ahead  of commencement of operations by Ibom Air.

The third aircraft in the fleet : CRJ 900 Series, the governor said  will arrive  in a few months.

 He  said  Ibom Air will operate routes that would give preference to Akwa Ibom people.

Emmanuel said   government would soon launch one of the best  airport terminal buildings in the country.

 According to Emmanuel, the State government will  focus  on the development of the state economy through intermodal transportation comprising :  air  water and road.

 He said : " So far, the state government has constructed over 1,000 kilometers of roads across the state while plan to construct the most digital seaport, the Ibom deep seaport in the state is ongoing.

 “The launching of Ibom Air is a monumental achievement in Akwa Ibom State and indeed Africa. The journey to achieve Ibom airline started in 2016 and it has become  a reality. This is the only state in Nigeria that runs and operates an international airport. We are the only state that runs a category two runway."

Emmanuel  said the airline was a monumental achievement of his administration saying the  six years old  - seater aircraft  constitute the  most modern  in the fleet  of the Canadian aircraft maker.

 He said  Akwa Ibom is the only state in Nigeria runs its  owned airport an airline as a business.

Bombardier CRJ 900 Series arrival at Uyo Airport 

About a fortnight  ago, two 90 -  seater Bombardier CRJ 900 Series aircraft 

 were unveiled  by the Senate President,  Bukola Saraki at the Victor Attah International Stadium, Uyo.

Saraki praised Akwa Ibom State Government for establishing the carrier, which he said will jumpstart the aviation; tourism and allied sectors in the state.

He said :  “Today is to celebrate leadership and to say that a good thing can come out of Nigeria. Today, we celebrate the audacity of hope and a man who has a dream for his people that has been realised.”

 Saraki  said  Ibom Air was an indication  that the government in the state was   always thinking of how to make life  better for its people.

This, he said  will  bring investment to the state.

 He said : " When you have a man from the private sector that understand what it takes to bring in investment.

  “Millions of youths are looking for job, government on its own cannot provide those job it is the government that can facilitate an environment for investment that will bring hope for our people that is what Emmanuel  is doing here."

 

 Project Initiator's Comment 

 Former governor of the state and initiator of the airport project, Obong Victor Attah lauded the governor for carrying on the project he started, adding that he was happy that the governor was running the state as a business.

 “I thank God that we have  Udom Emmanuel who has deemed it necessary to carry on the project we started years ago. I was accused of running the government as a business but I am happy that Udom Emmanuel is running the government as a business. Today we have in front of us the beginning of something that will bring economic development to the state.” he said.

Other Interventions /MRO 

 The Chairman, Ibom Air, Idongesit Nkanga, said with the launch of the aircraft, the state governor has shocked critics with his managerial prowess.

 The airline, he said will boost the realisation of the Maintenance Repair Overhaul (MRO) facility within the region, adding that there is no stopping the visionary and industrial initiative of Governor Emmanuel.

 The Technical Consultant of Ibom Air, Mfon Udom gave credit to  Governor Emmanuel for the project which he said commenced three years ago, noting that successful airlines across the world have been run by governments.

 He revealed that the third aircraft will arrive the state very soon.

He said  three other CRJ 900 Series aircraft will arrive  in 2020 and 2021 respectively.

 “The project commenced about three years ago and has been made possible by the governor. The governor came up with the drive and we carried it out. Ibom Air is one of the vehicles to drive Akwa Ibom and the state will benefit immensely from this.

  " Two airplanes  have  already arrived  and another airplane will arrive in August.

" Three other  aircraft  will join in 2020 and  2021. The plan is for Ibom Air  to be a regional airline.  Ibom Air  will fly three frequencies a day from Uyo to Lagos, morning, afternoon, evening.

 "The policy of Ibom Air is to  fly when our customers want to fly and not when it wants to fly. All successful airlines in the world is government owned; British Airways is still supported by government.

 "The government has taken the right steps. Ibom Air will employ 300 people but 3,000 people will be involved in Ibom Air at one time or the other, excellent mangers have been selected," he stated.

Benefits of Airport as MRO facility 

Besides the airline, the airport will also serve as an MRO for West and Central Africa.

Speaking on the matter,  Chief Executive Officer, African Aviation, Nick Fadugba the MRO facility in Uyo will be useful to African aviation sector.

He said the facility will become useful of absence of aircraft repair centres in Africa, arguing that the  African  aircraft Maintenance, Repair And Overhaul (MRO) Market is  estimated  to be over US$2.4 billion and it is still growing.

He said ,unfortunately, the  goldmine has remained untapped over the years in most parts of Africa.

.Fadugba said to achieve success in MRO business in Nigeria such facility should  have  a sound business plan  and  competent management to drive the process.

Fadugba said one of the benefits of African MROs , including the Victor Attah International Airport is creation of  competitive pricing for African operators.  

Fadugba  said when the maintenance, repair organisation (MRO) facility at the Akwa Ibom International Airport, Uyo, comes on stream it will benefit  Nigerian airlines that ferry their aircraft  overseas at prohibitive cost.

“I was filled with optimism when Akwa Ibom started the hangar, but it has been lying there for many years. And that is about $100 million invested in an empty hangar. Why haven’t Nigerian airlines come together? There is a hangar right there, why don’t they come together and get that hangar up and running? I am very sure Akwa Ibom State government will welcome Nigerian airlines .

“The government needs to get a company to put a business plan together for the  facility.

So, they need the right business plan, the right management and investment to make it work. I believe that that facility can be profitable and viable.  When I look at Akwa Ibom, it is a tremendous source of jobs for the state and the youths. I really urge the state government to pursue that project and make it viable” said Fadugba.

He also stated that geographical location of the facility or airport is not a problem saying “it is a couple of hour’s flight.”

“Nigerian airlines are ferrying their aircraft to Europe for maintenance. Why can’t they ferry it to Akwa Ibom, what is the difference. " If you have a facility there that can produce the job, I know the cost of labour will be much cheaper than in Europe. I believe that project is far-sighted.

"The facility can also serve the West Africa market. You can imagine people ferrying their aircraft from West Africa to Akwa Ibom."