NewsState Airports Told To Look Beyond Passengers For Revenue

State Airports Told To Look Beyond Passengers For Revenue

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BEVERLY HILLS, April 21, (THEWILL) – State governments constructing airports have been advised not to rely solely on revenue from passengers, but to look around the airports environment to harness areas of revenue generation.

An aviation consultant and former Chief Operations Officer with the Nigerian Aviation Handling Company, Mr. Hubert Odika, who gave this advice recently in Ikeja, while analysing the state of the industry in Nigeria, described the construction of airports by states as a good development geared towards providing employment, easy access from one state to another, opportunity for tourism and movement of general cargo.

He said the ability to build state airports showed that private participation would work in states and make airports profitable, adding that, the traditional airport operation generates only 30 percent revenue while the ancillary services around the airport could generate the bulk of the revenue

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On the recovery of the aviation industry after the pandemic, Odika explained that it would take some few years to recover with the introduction of vaccines, as it was not possible to put a timeline for the industry to recover.

Odika also explained that code sharing among airlines would help domestic airlines to grow financially as there was no room for waste in the Nigeria’s large market.

A “Code-Share” is an agreement between two or more airlines to come together in a flight. A ticket can be purchased from one airline for a flight that is actually operated by a partner airline.

He, however, noted that, it was not the best of times for airlines to declare fat profits as global trade was currently down, adding that, for the local airlines and with the kind of pricing they had, this era would be a tough time.

He noted that with the security challenges being faced in the country with unsafe roads, new domestic airlines would break-even as majority of passengers travelled by air.

He said: “In terms of new airlines springing up, it’s a good idea, we have the travelling population. So, there is nothing wrong in having more airlines.”

According to Odika, with the new airlines coming in with smaller aircraft, these companies were at the advantage of increasing their margins and reducing operating costs

He added that more airlines should embrace the use of such smaller aircraft and should also back up their operations with competition in terms of air-fare pricing.

According to him, to make profit in the industry, an airline must be operating between 60 to 70 percent capacity.

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