Aviation

Upping the Ante

Arik Air sparks fresh competition with its operations into Kaduna airport, deploying brand new aircraft and price discrimination as strategy. However, observers insist the airline has a match, while passengers express satisfaction

By MUYIWA LUCAS

Boarding Arik

Intense competition is now on the horizon on the Lagos-Kaduna route. This is coming on the heels of last week’s launch of flight operations into Kaduna airport by Arik Air. For many years now, Chanchangi Airline has been the sole operator on the Lagos-Kaduna-Lagos route. To woe passengers on the route, Arik Air deployed brand new airplanes. This strategy, stakeholders insist, has been most effective as it impacts on the psychology of passengers who believe that brand new aircraft are very safe, given the bad experiences of the past with old aircraft. Mohammed Issa, a passenger aboard the inaugural flight from Kaduna to Lagos, told the magazine that his decision to fly Arik was based on his curiosity to feel what being in a new aircraft is. “It is very nice in here (aircraft); they (Arik) will be my choice airline now”, he told the magazine. Arik has not failed to capitalise on this at any given opportunity. Michael McTighe, managing director, Arik Air, reinstated his airline’s commitment to providing safe, reliable air transport for the entire population of Nigeria. “We are deploying our brand new CRJ 900 series airplane on this route for your convenience and safe flying because you are very important and precious to us.  We assure you of the best services at all times”, he assured passengers during the airline’s inaugural flight on the Kaduna route.
The airline is also using price mechanism as a strategy to break into the Lagos-Kaduna route. While the price of aviation fuel, Jet A1 rises, which has provided a leeway for airlines to increase air fares, Arik has been able to maintain a lower fare than its competitors. For instance, Chanchangi charges N18,000 for a one-way trip from Kaduna to Lagos, while Arik charges N17,500. McTighe explained that the high cost of fuel in the country is taking its toll on the aviation business, thus it is imperative that an efficient aircraft is used for specific operations. This probably explains the decision of the airline to deploy its CRJ 900 fleet, which may well pass for a low-cost carrier on the Kaduna route until the passenger traffic improves when it hopes to deploy its brand new Boeing aircraft series.
Mohammed Tukur, executive director, corporate affairs and business development, Afrijet Airline, however, believes that on the Kaduna route, pricing mechanism adopted by Arik may not be effective.  According to him, when an airline is starting a new route, it will use price discrimination to win passengers. “If they decide to use that strategy, it may boomerang because you have to understand that Chanchangi can decide to fly passengers on that route free of charge because it has made its profit several times over on that axis. Besides, that is its base, so anything can happen in the spirit of brotherhood”, explained Tukur.
But Tukur’s argument may not really hold in the domain of the flying public. A passenger, who simply identified himself as ‘Chuks’ told the magazine at the Kaduna airport that the coming of

Tukur: Executive Director Arik

Arik Air to the state was a wonderful relief for air travellers as it now provided an alternative. Ken Onyebuchi, another passenger, explained that with the arrival of Arik it means that there will be competition which is good for business. “Before we had one operator here, now we have two; it is a good one for travellers since we now have a choice”, Onyebuchi said. The increase in number of airlines is also believed would bring back potential passengers who had given up on air travel along that axis.
Arik’s inaugural flight to Kaduna was a welcome development for waiting passengers and government officials. Ibrahim Mohammed, flight captain, taxied the airline’s inaugural flight W3- 411, operated with a Canadian Regional Jet, CRJ 900, named ‘Patrick’ to a thunderous ovation at the airport. “You are welcome; we have been expecting you”, Allah-Magani Yohanna, commissioner for tourism and culture, Kaduna State, enthused. He expressed delight at the initiative which he said was part of the government’s plans to help in promoting movement between Kaduna and other parts of the country, adding that it served as a big boost for tourism. “We are deeply interested in anything that will ease movement because tourism sector thrives when you have more people being able to move around freely; the more flights we have, the merrier. We appreciate your effort in making Kaduna one of your destinations and I call on prospective passengers to patronise you so as to make your stay in Kaduna fruitful”, Yohanna said.
Esobe Egwu, airspace manager, Kaduna airport, while welcoming Arik, explained that the aviation agencies in the state enjoyed a “very good collaborative relationship with the government to ensure that safety is guaranteed in this place”. Egwu hinted that with the coming of the airline, the tasks on the agencies have increased but assured that more efforts would be put in “to ensure that you succeed”.
McTighe observed that the Kaduna route was very good for commerce. “The addition of Kaduna on our route network is a testimony of our commitment to the growth of the Nigerian aviation industry. Moreover, Kaduna is Nigeria’s largest textile-manufacturing centre and has other major industries as well, including an oil refinery. The place of Kaduna State in the political evolution of Nigeria cannot be ignored”, he noted.
And the passengers appeared to heed the call of Yohanna as the 90-seater aircraft was filled on the return trip to Lagos. “It is a new experience for me”, an obviously satisfied Issa submitted.
This route, observers claim, has grossly been under-serviced by airlines, who believe that passenger traffic on the axis is not commensurate with the cost of flying a jet there. Most of the airlines do not have low-cost carrier airplanes which is ideal for low passenger traffic routes.  Chanchangi, it is believed, still operates the route because it is the home-state of the chairman and owner of the airline. Tukur, however, disagreed with the low traffic theory.
Findings by the magazine reveal that the route is actually a viable one. This is due to the strategic position of the state in the northern part of the country. Before the economic downturn of the 1980s, the state played host to several industries, including a refinery. Besides, the low passenger traffic toga on the route is said to be due to a dearth of regular flights, hence, once passengers miss the only Chanchangi flight, the alternative is to travel by road. Tukur agreed. He told the magazine that between 7 a.m. and 2 p.m. daily, flights are not available to or from Kaduna. Arik Air has now filled this time belt. He recalled that he, alongside some others, had to travel to Abuja from Kaduna by road due to the non-availability of flight. “I can tell you the passenger traffic is there and all that is needed is more flights to come in; there is a hidden treasure of passenger goldmine in Kaduna”, he explained.
Attempts to get a reaction from Chanchangi Airline failed. However, sources close to the airline informed the magazine that the airline was unperturbed by Arik’s operation into Kaduna. “The airline does not see it as a threat; rather, we feel it is a good development for our people in Kaduna”, the source explained.
Tukur, who for over a decade was the coordinator and public relations officer of Chanchangi Airline, though agrees that the coming of Arik to the route may affect Chanchangi because of its present number of fleet, he believes it will not be felt. This he hinged on the timing of the flights. While the new entrant flies the 10:20 a.m. and 12:20 p.m. belt, Chanchangi operates the 2 p.m. and 5 p.m. belt. “But I can tell you that if Chanchangi decides to operate the same time belt with Arik, they will match them conveniently once their aircraft are back from maintenance. Nobody has the record of Chanchangi in terms of passenger traffic; the records are there”, he explained.   
Indeed, the fight for the Kaduna route is expected to intensify with the anticipated entry of Virgin Nigeria Airline sometime soon. Virgin Nigeria Airline, with its expected delivery of brand new aircraft later in the year, hopes to embark on further route expansion to cater for the needs of the industry. “Route opening is usually hinged on due diligence survey and we have over time prioritized our network structure. With our acquisition, more routes will be opened up; Virgin Nigeria has a well defined business model which is gradually being implemented. Our business plan is to fly into as many airports as possible both locally and internationally, Nkiru Olumide-Ojo, communications manager, Virgin Nigeria, explained.
Olumide-Ojo agrees that competition is good for the industry as it brings out the best in it. “The presence of competitors will certainly raise the standards of service delivery and naturally, the expectation of the passengers. In the end, both the customers and airlines will be better off”, she submitted.
Last week’s commencement of commercial operation to Kaduna airport brings to 23 the number of routes plied by Arik. With 22 airports in the country, Arik’s incursion into Kaduna airport makes it the 18th airport to be flown into by the one year and seven months old airline, having started full commercial operations on October 30, 2006.