By Dr. Daniel Young
Permit me to lend my voice to the ongoing discuss on union STRIKES and constant disruption of airlines operations in our terminals across the country.
I do not condemn the unions for their approach to revenue collection because that may be the only way they know, neither do I wish to hold the airlines by the throat for being behind their bills because it may not as its seems, be intentional.
Everyone in the industry knows that we are all going through a very volatile period in the industry and practically every airline today- foreign and domestic is under heavy financial pressure to remain in business.
Nigerian airlines, domestic/regional and perhaps international operators, have not been as fortunate as their peers in other climes who have received bailouts from their governments and to make things worse, banks in Nigeria are near-broke and cannot support the financial needs to these airlines for loans. However, these airlines must function and hope against hope that things would improve as they progress and I honestly think that Federal Airports Authority of Nigeria (FAAN) should be accommodating at this point to allow them, time to recuperate fully before engaging them with extreme measures. This areas of comfort does not include unremitted PSC collected by airlines on behalf of FAAN.
The unions should understand that airports are for airplanes and if the airplanes don’t fly and passengers to come, the airports become ideal warehouses – fit only for rodents and lizards.
Live and let live should be our mantra for now.
Airlines must endeavour to pay up their back logs so that FAAN can survive through these trying times.
This is the true position of things and I sincerely hope that the airport operators and the unions would take a second look at the situation and fashion out ways and means of reaching a balanced agreement with themselves and save the industry the shame of appearing disorganised and the passengers the pain of wasted time and resources. There is always a compromise position in every deal and we must find one, in order to sustain the gains of the COVID-19 resumption we have so far achieved.
I believe that the reason for the constant airline and airport operators’ conflicts we have witnessed in the last few weeks is FAAN’s over reliance on aeronautical revenue.
There needs to be a dramatic shift from aeronautical revenue to non-aeronautical revenue and that should happen immediately to help FAAN remain afloat financially and allow the airlines some latitude to survive the stress and strain of COVID-19 disruption.
The airports commercial landscape has changed and calls for new ways of thinking revenue.
The pre-COVID-19 revenue models won’t work anymore because of the low turnout passenger and cargo volume. Therefore, there is need for process innovation to enhance revenue per enplaned passenger.
The new way of thinking revenue requires that FAAN must start seeing dollar or Naira signs on the heads of each passenger or even meters and greeters in the airport. The airport is the only business environment with high net worth captive audience and we must leverage all options to maximize airport revenue [outside aeronautical] options by engaging retail diversification, category optimization, footfall optimizations, specialty retail and in–face-disruptive advertising options.
These new market opportunities forbid that FAAN should rely on 70-80% aeronautical revenue [which is why the unions are always disrupting flight operation to raise money for salaries on monthly basis and who would blame them?] if they must continue in business.
My conclusions are based on a series of amalgamated reviews on passenger traffic we have conducted which show that at this rate, it will take close to two years to get FAAN back on her feet. Therefore there is an urgent need for new strategic and operational initiatives [not lip service recommendations on non-aeronautical revenue] that will deploy strategic levers, designed to look more towards passenger engagement for the purpose of increasing average passenger spend, airportainment options, restructuring of retail concession options, diversification of arrangement in traditional revenue options, sense-of- place retail branding, up- skilling of employee and employee engagement in revenue mobilization.
There is also a very urgent need for the creation of a mutually beneficial airport ecosystem and not the current adversarial relationships being fostered by the current UNION –clampdowns.
FAAN can no longer use dwindling passenger volume as an excuse in the face of many veritable revenue options. Clampdowns on airlines seem like a good option but it is also killing our industry by installments. Lets weigh our options well.
With the permission of the writer to publish, Dr. Daniel Young contributed this piece on Aviation Professionals’ WhatsApp group platform on October 30, 2020.
