The Chief Executive Officer of Financial Derivatives, Como
Limited, Mr Bismarck Rewane has stressed the need for a competitive hub system, preferably in Lagos and Abuja.
Rewane also called for very strong and effective regulations on safety.
Speaking at the just concluded League of Airport and Aviation Correspondents, LAAC Annual Conference held at Providence Hotel in Lagos, Rewane stressed that there is no need to spend on airport but to concession it and let the new owner fix it.
He noted that Nigeria had to spend billions trying to fix the refineries many years ago which could have been better for the country to have sold it to Dangote.
Rewane also emphasized the need to invest in local maintenance, repair and overhaul, adding that the country needs simulators.
According to him: “It takes about $125,000 to send a Captain for simulator training for three weeks.
We either send them to Addis Ababa or Johannesburg, or Amsterdam”.
Rewane advised the government to focus on Policy and regulation and
not running airlines, adding that “even the ones you can run, you are not running them properly.”
He pointed out that policy consistency is crucial for rebuilding trust and attract global investment and capital.
Rewane said COVID 19 was one event that shook the world, and took out a lot of people.
He stated that international travel arrivals are forecast to rise by 5% to 1.5 billion passengers in 2025.
According to him,
“airline profits are on the rise and projected to be $36 billion with a 3.7% profit margin.
This is $36 billion worth of profits for the global aviation industry. This is one of the best, but only half of it happens across all industries. Other industries are doing much better.
Telcos, people are doing 15%, 10%, but airlines are having to have 3.7%. The most profitable airlines are privately owned and joint ventures. One of the services like hotels, carriers, insurance, will take place in the tech industry, possibly even in the pricing, are more measured by COVID-19. So we have open sky agreement, you have the Banjul Accord. But this is a highly regulated industry and also very restrictive”.
Rewane stated that the world is rotating around three major alliances like the Star Alliance, Lufthansa, South African Airways, Ethiopia, Oneworld with British Airways, which is the Panthers, American Airlines, and Skyteam, which is Air France, KLM.
He observed that accidents occur in countries where there are less infrastructure Iike Pakistan, Bangladesh, than it does in advance countries where you have infrastructure.
The Financial Derivatives boss explained that Nigeria has 32 airports, only 22 are considered viable, while 96% of the traffic goes through just four.
He stated further that
Nigeria has 23 active domestic airlines, but only 5 airlines control 75% of the traffic.
He pointed out that due to poor infrastructure, Nigeria’s aviation sector lost $3.5 billion in revenue between 2020 and 2022.
Rewane said there are very few profit airlines in all of Africa as Ethiopian Airlines had turnover of $7.7 billion in 2024, making a profit of $1.5 billion while South African airlines made a loss of $19.4 billion in 2012.
In his words “Profit airlines tend to have modern fleet, strong monetary economy.
Loss making airlines rely on government subsidy, low demand markets, and suffer from inefficiency.
