The emergence of state-owned airlines across several Nigerian states is reshaping competition on secondary routes long dominated by one or two carriers, leading to fare reductions and expanding travel options for passengers.

The new competition has led to lower ticket prices, wider consumer choice, stimulation of previously suppressed travel demand, and the creation of employment opportunities within the aviation value chain.

The Akwa Ibom government pioneered this initiative with the launch of Ibom Air, achieving notable milestones such as substantial fare reductions on the Lagos-Akwa Ibom corridor, the upgrading of Akwa Ibom Airport, and the commencement of a state-of-the-art Maintenance, Repair, and Overhaul (MRO) facility.

The catalyst prompted neighboring Cross River State to establish Cally Air in July 2021, and within a year, Enugu, Ogun, and Ebonyi states followed suit with their own aviation ventures. Most recently, Bayelsa State commenced commercial operations with its inaugural state-owned aircraft, further intensifying the competitive landscape.

While critics argue that state funds might be better allocated to infrastructure and public services, proponents contend that these airlines have dismantled monopolistic practices on secondary airports, resulting in lower fares and enhanced service quality.

Olumide Ohunayo, industry analyst and director of research at Zenith Travels, said the trend is what the market needs, especially at a time when prices of tickets are rising.

“I encourage this trend and I wish more states will join in the establishment of local carriers. Maybe this will bring about the needed consolidation since the regulatory side has not worked,” he said.

“What we will thank them for is that they have helped in slashing fares. We knew what it was like to fly into Enugu in the past. Enugu had the same problem as the Ilorin passengers. Now, UMZA Air has gone to Ilorin and the fares there have dropped. Once supply outweighs demand, you will see the difference in fares but when the demand is higher than supply, the passengers suffer,” Ohunayo explained.

He advised that the airlines should consider collaborating with others as this will further help the industry and the secondary airports to reduce the pains of passengers and boost scheduled reliability and low flight schedules.

“This trend would also help to develop other routes outside the trunk route. You would see some flights linking from states to states without coming to Lagos, Abuja and Port Harcourt and that is what we are waiting for.

“I know that somewhere along the line, they would have to look at what Ibom Air has done, how they have made the airline commercially driven and tied it to Ibom Airport development and other activities around tourism. This should be the goal,” Ohunayo said.

BusinessDay had earlier reported that passengers travelling from Lagos to second-tier airports such as Ilorin, Akure, Anambra, Benin, Katsina, Sokoto, Ibadan and Yola among others, have continued to pay exorbitant fares owing to absence of competition on the routes.

Findings show that only a very few airlines operate into these routes, thereby stifling competition, as airlines arbitrarily fix prices, arguing that most of these airports are not profitable because of low passenger traffic from them.

However, stakeholders argue that if more airlines are competing on these routes, prices would reduce and more passengers would be able to travel through these airports.

Before Enugu, Cross River, Ogun and Ebonyi States joined the fray of state-owned airlines, one-way economy class tickets to these destinations cost between N200, 000 to N350,000 even when it was not the festive season.

Whereas, before Christmas, a one-way economy class ticket from Lagos to farther destinations such as Abuja, Port Harcourt, Kano and Owerri cost an average N150,000 to N200,000 depending on time of travel and the airline.

However, since these few airlines came onboard, fares on these secondary routes have reduced to about N150,000 except for the festive season.

Stakeholders argue that despite the presence of these new airlines, there is still shortage of supply as flights to these secondary airports are currently fully booked for Christmas.

Seyi Adewale, chief executive officer of Mainstream Cargo Limited, told BusinessDay that the emergence of state-owned airlines would significantly benefit the passengers because air fares in/ out of the investing states are subsidised in order to generate throughput into these states, attract business travellers, tourists, investors, the federal government or political party patronage.

He said this would directly boost entertainment, leisure, and hospitality sectors.

“Furthermore, it helps connect the dots within states and inter alia the Nigerian aviation space since the Federal Airports Authority of Nigeria (FAAN) and the Nigeria Civil Aviation Authority (NCAA) are federal agencies that have direct oversight functions over these states sponsored airports and airlines,” Adewale said.

He said the trend will further directly assist connectivity to international airports and potential possibilities for code share or interline arrangements with bigger international carriers.

John Ojikutu, CEO of Centurion Aviation Security and Safety Consult, however, argued that the projection for passenger traffic in 2000 for 2020 was 20 million, noting that in 2025, the traffic is still below the 20 million projection despite a rise in the number of airlines and airports.

“All these are political projects in political competitions. What traffic is there for Ebonyi and Enugu airlines and airports in the South-East, where there are Owerri and Anambra airports that collectively have not recorded up to 1.5 million passenger traffic? Asaba is not far from Onitsha.”

He raised similar concerns about Ibadan, Akure and Ogun competing with Lagos, Nigeria’s main commercial hub, despite low passenger volumes.

Ojikutu called on the NCAA to strengthen oversight and enforcement of airport and airline development regulations. (BusinessDay)