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Fri 10 Jul 2009 04:00 AM

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Out of Africa

Nigeria holds a lot of promise for Skyward Aviation says vice president Ali Tunde Bolarinwa but a saturated Middle East market is a cause for concern.

Out of Africa

Nigeria holds a lot of promise for Skyward Aviation says vice president Ali Tunde Bolarinwa but a saturated Middle East market is a cause for concern.

As the vice president of Skyward Aviation, a UAE-based aviation services company and representative for Kabo Air, the largest private airline in Africa, Ali Tunde Bolarinwa has mastered the art of diversification during the economic slump. Yet despite his business being hit by the financial crisis he maintains a positive outlook for the future of aviation.

"Look, the region and in particular Dubai, will survive [the recession]. Dubai is well placed in that it is seven hours to most places; China, Thailand, Malaysia, likewise Europe and Africa. If you look at all this movement, you can't find aircraft that can fly for 15 hours so Dubai is well placed," Bolarinwa explains.

Emirates flies to Lagos daily and Qatar and Middle East Airlines have a market share but we still believe there is a place for us. - Skyward Aviation VP Ali Tunde Bolarinwa

However, the movement of freight is the biggest part of Skyward's business and the outlook is bleak says Bolarinwa. "We have been affected by the drop in cargo. In Ghangzhou, China most of the factories have closed and this is because there is no demand anymore. The demand coming in from Africa before has declined significantly because now it is an issue of necessity only. We are still doing a lot of business with people going for pilgrimage in Saudi, but this is a seasonal market, whereas cargo is year-round, so we have been affected."

The changing market has meant Bolarinwa, like many other firms in the region, has had to adapt his business in order to protect it from the debris of the collapsed economy. "Apart from freight, we do a lot of support for the major African airlines. We facilitate the bilaterals and traffic rights to the Middle East so fortunately our business is multi-faceted."

In addition, Kabo Air is concentrating its efforts on moving people instead of goods. "We have just started scheduled flights from Nigeria to Dubai, three times a week with a Boeing 767-300, which is leased from Icelandic Airlines." Not only that, the airline also operates flights to Cairo and Jeddah. But Bolarinwa admits that passenger loads are currently very low, "Jeddah is very good for us, but to Cairo we are only achieving around 45% passenger load and Dubai is worse at only 28-35%." However the vice president remains confident that numbers will improve. "Tomorrow looks promising and summer is coming," he says optimistically.

In fact, Kabo Air has plans to buy its own 767, as the seven 747s, which are operated on a wet-lease basis, are not suitable for the airline's future aspirations. "We have just gained approval to operate to London from Nigeria and this holds huge potential for us. We would not consider starting flights to any new Gulf destinations and in my opinion the UK route is one of the only economically sound destinations for any airline at the moment," he continues. "Emirates' decision to place its A380 onto its London route makes sense as London will always be a strong market."

But Bolarinwa does have some reservations about the region's approach to business. "Certain things are not in our hands. There are a lot of parked aircraft at Dubai airport for example, yet new aircraft still arrive. This shows that underlying factors are not being taken into consideration. For some reason Europeans are not coming here anymore, but European carriers' projections are unbelievable and new routes and new aircraft keep on coming."

This further compounds Bolarinwa's belief that the Nigerian market is where Kabo Air and Skyward Aviation will flourish. "We may consider launching our Nigeria to London route later this year as the Nigerian market, with around 40 million people, is big enough to go around. Emirates flies to Lagos daily and Qatar and Middle East Airlines have a market share but we still believe there is a place for us."

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