My 50cents for those with an open mind on the Air Peace, Foreign Airlines and Flight Pricing Issues. - G.B Onitilo

 My 50cents for those with an open mind on the Air Peace, Foreign Airlines and Flight Pricing Issues.

Airlines make less than $4 net profit on tickets sold. 50% of operational cost is on fueling and the business is majorly forex driven and fluctuation impacts the business astronomically.

 Since 2014 airlines have not been able to repatriate ticket sales sold at 164 Naira to a dollar and what is the exchange today? They are already at a loss and to mitigate that they reduced exposure to Naira devaluation and inability to move out funds by ensuring only high fare classes are sold to bridge losses which is economics.

Air Peace does not repatriate funds but cost of operations on International Operations for them will be higher as they are operating in an arrival and departure environment unlike foreign airlines operating in a transit system with connections multiple continents.

Few things to note  International Operations from Nigeria - 

1. Airlines typically earn a modest net profit of under $4 on each ticket sold, with about 50% of operational costs attributed to fuel expenses. The aviation industry is heavily influenced by forex fluctuations, significantly impacting business operations.

2. Comparing Air Peace to foreign carriers lacks a solid basis. While all airlines sell tickets in Nigeria in Naira, foreign airlines are at a  disadvantages with forex access limitations as well as functions and devaluation of Naira to repatriate ticket sales proceeds even though to bilateral air service agreements, grants them rights to repatriate sales proceeds in dollars. Since 2014, airlines have struggled to repatriate funds from ticket sales due to currency devaluation and limited access to FX. 

3. A strategy involving selling lower fare classes which is not sustainable for any airline.   Operating in a point-to-point environment without transit system will lead to limitations on scaling up. 

4. Successful international operations require strategic elements such as operating from transit airports, establishing intercontinental flight connections, maintaining strong corporate governance, forming partnerships with foreign carriers for seamless passenger transit, implementing a loyalty program to enhance customer retention, and ensuring local and regional flights feed into international routes.

5. Scaling up operations should be gradual, starting with a few frequencies and expanding as load factors exceed 80% and premium customer demand grows.

6. Professional management is essential for commercial operations and public relations to uphold brand reputation and credibility.

7. Consistency in product and service offerings is crucial for building customer trust and loyalty in the long run.

8. You must have partnerships with other foreign carriers to boost onward flight connections to your passengers for other continents.

9. You must have a loyalty programme to build points for your customers as patriotism is not enough as people will not want to lose their points with foreign carriers built over the years which offers them leverage for future travels.

10.  Your local and regional flights must feed into your international flights to increase number of passengers boarding your flights.

G.B Onitilo