Nigerian aviation industry stakeholders are urging more airlines to enter into a business alliance called a codeshare agreement.
A codeshare agreement is a business alliance between two airlines that allows them to offer flight operations on the same routes.
Dana Airlines and Ibom Airlines had on May 21, 2021, signed a codeshare agreement, tagged ‘Dana-Ibom Alliance,’ at the Victor Attah International Airport Uyo. It offered both airlines the opportunity to jointly offer flights to similar destinations and air services to destinations that are not within the airlines’ routes.
The agreement also offered Dana and Ibom Airlines the opportunity to increase profitability in the aviation industry.
The spokesperson for the Nigerian Civil Aviation Authority, Sam Adurogboye, described the codeshare agreement as a commercial agreement among airlines supported by the NCAA as long as it is carried along.
He said, “Airlines are at liberty to take business decisions that could engender returns on their investments. But the NCAA must be informed.
“No one can be an island. You will need others somewhere and sometime.”
The Managing Partner, Aglow Aviation Support Services Limited, Tayo Ojuri, told our correspondent that more airlines needed to come together to form partnerships so as to combat operational challenges.
Ojuri said, “Ibom Airlines and Dana Air [deal] is the right step in the right direction and it is needed now, especially because airlines will always have operational challenges. We know what the cost of operations is currently.
“When an airline’s flight is unavailable, it is better to put the passengers on the next airline a partnership exists with, which makes sense for economy of scale.
“We have the strategic alliances; a team of airlines came together to form these alliances. They have codeshare; they have technical partnership, and these really helped them.
“What needs to be done is for them to have a niche platform whereby there would be seamless exchange of tickets like the interbank settlement system.
“This is the same platform that the International Air Transport Association Billing Settlement Plan does.”
According to Ojuri, a business alliance is something that is required and will help boost the consistency and solidarity of domestic operations.
“This is something that we need now. We move forward through a coordinated platform or through the IATA Billing Settlement Plan, which could be done specially from Nigeria,” he added.
The BSP is a system designed to facilitate and simplify the selling, reporting and remitting procedures of IATA Accredited Passenger Sales Agents, as well as improve financial control and cash flow for BSP airlines.
According to the IATA, the BSP is a worldwide system with operations in 180 countries and territories. The system currently serves more than 370 participating airlines with an on-time settlement rate of 99.99 per cent. In 2017, IATA’s BSP processed $236.3bn.
A member of the Aviation Round Table, Group Capt. John Ojikutu (retd.), said code sharing should be embraced by more airlines in Nigeria.
According to him, the codeshare agreement between Dana Air and Ibom Air should encourage other airlines to follow suit.
Ojikutu said, “Other domestic airlines should begin to do what Dana and Ibom Air have started doing. Code sharing among our domestic airlines has long been overdue.
“It is not necessarily about transparency but the advantages, which are more than single line operations and better partnerships in terms of revenue earnings, turnaround times, frequencies and number of daily, monthly and annual flights.”
“There are about four international alliances that have existed for more than 40 years. These international alliances make it difficult for any African airlines to operate and compete effectively with any foreign intercontinental airline without being a member,” he added.