Home Aviation Webinar: ASRTI, Others Insist on Interlining, Codeshare as Recipe for Domestic Airlines Profitability, Passenger Comfort

Webinar: ASRTI, Others Insist on Interlining, Codeshare as Recipe for Domestic Airlines Profitability, Passenger Comfort

by timenews
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A recent webinar organised by the Aviation Safety Round Table Initiative (ASRTI) held in Lagos, has reiterated the need for interlining/codeshare as recipe to check domestic airlines challenges as well as boost profitability and passenger comfort.

The webinar themed: ‘Utilising Interlining and Codeshare Agreements as Tools for Domestic Airlines’ Profitability and Passenger Comfort,’ looked at the untold hardship air passengers are subjected to owing to the woeful and appalling On time Performance/Schedule Performance Index of domestic airlines.

President of ASRTI, Dr. Gbenga Olowo, in his opening statement said the above was an established fact and explained that poor OTP is a pointer to inadequate fleet and depleting fleet thus affecting turnaround which pose safety and consumer protection question.

He noted that in circumstances as this, pooling through codeshare/interlining agreements would have provided the needed remedy which is a global best practice.

Olowo pointed out that interlining makes it mandatory to be in the Clearing House for interline settlements and this directly or indirectly measures the economic health of the airline.

He encouraged the Nigeria Civil Aviation Authority (NCAA) to use Policy Instrument and Institute Pooling as stated in the Aviation Act which infers Interlining/Codesharing among the carriers in order to guarantee passenger comfort.

He said: “A central Airline Clearing House (ACH) should be established to handle Interlining Settlements ‘not one on one’ basis which made few experiments in the past to fail due to frequent defaults.

“This will serve as an instrument under Consumer Protection for Passenger comfort and protection from incessant sufferings through delays.

“Absence of a member airline at ACH will be a pointer to economic weakness which directly endangers safety.

Olowo recommended that based on Safety and Consumer Protection premises Economic Regulation should regard readiness to interline by the airlines and presence at ACH as a condition precedent for Air Operators Certificate (AOC) renewal.

ASRTI at the end of the webinar which drew participants and speakers from the titans in the Industry issued a communiqué on the way forward applying the interlining/codeshare tool:

. The webinar acknowledged flight cancellation and the perishability of unused seats as important challenges to trigger interlining and code-share agreements as tools for minimising hardship experienced by passengers and the enhancement of airlines profitability, quality of service and revenue generation.

. The webinar acknowledged that interline and code-share are business decisions not to be initiated by regulatory fiat but noted the need for the endorsement by the NCAA as a regulatory body through the use of regulatory inducements and other strategic policies without compromising the stipulated annual economic audit on all domestic airlines to determine their state of health as Part 18 of Nigeria Civil Aviation Regulations (NCAR) enjoins.

. The webinar highlighted the expediency for Nigeria’s Aviation supervisory authorities to compliment the safety with economic will, while airlines develop the willingness to embrace technical cooperation arrangements in order to exploit the huge profitability opportunities in the regional air transport market under such agreements.

. The webinar recommended the emplacement of a guaranteed payment process such as Bill Settlement Plan (BSP) to enhance airlines’ cooperation while airlines embark on human capacity building for their staff on commercial agreements, negotiation, code-share, revenue management and applicable work ethics.

. For Nigerian airlines to be attractive to foreign carriers for code-share and other partnerships, the webinar recommended that operators be International Air Transport Association (IATA) Operational Safety Audit (IOSA) compliant, develop attractive route networks, ensure good product quality, develop the requisite commercial acumen and understand the contract terms of their engagement.

. It recommended partnership and cooperation models work amongst airlines that consider themselves peers and whose operations are complimentary and that no single cooperation model fits it all. Therefore, domestic airlines should advance cooperation models that work best for the operations such as the model being implemented by Ibom Air.

. Compared to the cost of going through the IATA Clearing House system for settlement of airline obligations the webinar advised that airlines should consider a local clearing system that addresses the current challenges of Industry credit and place sales in a float account using solutions as the proposed One-Ticket solution where funds flow directly to the holder of the flown coupon.

. The webinar noted that Nigerian banks have demonstrated the benefits of shared systems aimed at easing the convenience of their customers and that this can be a model for the Airline Industry to facilitate the ease of the airline passengers in addressing options due to extended delays and cancellations.

.Nigerian banks are ready, able and willing to leverage on extant financial technology services to facilitate airlines’ interline arrangements to attain the ease of transactions for payment and settlement.


Photo caption:

Gbenga Olowo, President, ASRTI

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