Last week, Med-View Airline Plc released its audited results for the 2018 financial year. Revenue fell sharply from N36.9 billion in 2017 to N9. 5 billion in 2018. This marks a 74% decline year on year.
Even more worrisome is the fact that the firm made a mega loss in 2018.
The company made an N10.3 billion loss after tax in 2018, as against a N1.2 billion profit after tax in 2017. This represents a 925% decline year on year.
Reasons for the loss
Management of the firm shed more light on the factors that led to woeful performance.
Sheik Abdul-Mosheen Al-Thunayan, Chairman of the airline, blamed the performance on political tension and tight liquidity.
“The political tension and extremely tight market liquidity in Nigeria affected economic growth of Med-View. The depleted aircraft fleet, due to C-Check at the early part of 2018 and reprotection exercise, also contributed to the decline in the revenue of the Company.”
The reprotection exercise pertains to its London route.
Al-Thunanyan also disclosed that the firm had encountered mixed fortunes on its London route.
“Med-View commenced scheduled flight operations to the United Kingdom in late 2015. The venture has had its good and bad sides of the business — good side in terms of revenue generation, and bad side in terms of passenger reprotection and Aviation Politics (Avio politics).
He continued
During the course of the London operations, the Aircraft that was leased to Med-View had an AOG (Aircraft On Ground) in December 2017. Accordingly, it resulted in Med-View reprotecting passengers at double/triple the price of the ticket on other carriers like Virgin Atlantic, British Airways and Air Maroc, to mention but a few.
What is passenger reprotection?
The passenger reprotection exercise is an industry standard practice that enables Airlines to put their own passengers on other Airlines when scheduled flights cannot be operated. This is done at the fare of the operating Airline, regardless of the amount paid by the passenger to the original carrier.
Med-View continued with the arrangement till late 2018.”
A fall out
In a bid to stay afloat, the company had to lay off staff.
Having been aware of these challenges, Med-View Airline, in its utmost wisdom, decided to downgrade the staff strength of the company.
The new competition
Chief Executive Officer of the airline, Muneer Bankole also shed more light on the increasing competition in the sector.
The airline sector in Nigeria is increasingly becoming highly competitive, with an interesting twist of surpassing one another by the major players. Our new competitors are not necessarily registered airlines, but rather charter services by individual and corporate entities who have interest in aviation.
He continued
Potential passengers are no longer waiting for airline offers to travel around the world, various groups and organizations are putting up irresistible packages for passengers and bringing them to fly with registered airlines. This, in turn, is splitting the revenue to be generated by the airlines in scheduled operations.
Going forward
In a bid to surmount these challenges, the company has decided to diversify into other areas in the aviation space, such as the building of an MRO facility.
“We have obtained the necessary permits and the Chinese Company, CCECC, has submitted quotation and are keen to actualize this dream on our behalf. It is our view that in the long term, these diversifications will increase our revenues while also rapidly decreasing long-term operating expenses on maintenance.”
How about the chairman leaving out the fact that the Airline still owes the laid-off staff salary, pensions and other entitlements???
However, what about the major missing links like:
1. Lack of prudence & accountability on the part of Management
2. Faulty & poor lease contract.
3. Absence of business roadmap/plan, consequently no corporate objectives.
4. Top Mgt’s dependence on stale native intelligence.
5. Management’s Financial duplicity, and personal aggrandisement…etc.