By Chinelo Obogo, [email protected]
In March 2022, five domestic airlines formed a partnership known as ‘The Spring Alliance,’ with the goal of collaborating to enhance operational efficiency, improve passenger service and reduce flight disruptions.
However, two years later, the alliance seems to have crumbled, while flight delays and cancellations persist.
The Chief Executive Officer of Top Brass Aviation, Roland Iyayi, recently spoke to Daily Sun about the reasons behind the alliance’s failure.
He also highlighted the Nigeria Civil Aviation Authority’s (NCAA) efforts to address the issue by implementing a blockchain-based platform designed to offer immediate relief to stranded or dissatisfied passengers, while simultaneously reducing operational risks for airlines.
The Spring Alliance
Some airlines came together to form an alliance. There were two issues. One was which airline will drive it or which medium would they use in driving it? All of them seemed to be very busy with their own things and they didn’t have or didn’t want to commit additional resources to doing this on behalf of everybody else. So, nobody was willing to take the ownership or leadership. So, that was one problem.
The second problem was the issue of how much would it be that each airline would get paid, for instance, if an airline sold and an airline carried. So those two issues, one of money and one of management, are two things that the block chain solution that the NCAA is providing wouldn’t have. Importantly, the blockchain is a neutral party and does not have to deal with any biases. So those are the issues that they have to contend with.
The NCAA is worried about the rancour in the in the in the industry and particularly the market where a lot of people go online to complain about one thing or the other and you know that social media has a way of blowing things out of proportion. If there are a thousand passengers flying and one or two passengers are complaining about wanting a refund and they’re not getting, it is all that we would hear, but you don’t hear the 998 who are satisfied.
So, the NCAA is trying to manage the perception of the public by bringing up something to address the concerns of a consumer, at the same time, not throwing the airlines under the bus. The block chain solution allows the airlines’ nuances to be taken cognisance of and at the same time, addresses the concerns of the flying public so that they are not taken advantage of. Because, the perception of the public is that they buy tickets and when it’s time for refunds you don’t get it. Whereas, there are several things that you need to consider when it comes to the issue of refunds.
For instance, if tickets are sold through an agent, the airline cannot immediately refund it because there’s a transactional arrangement between the airline and the agent which has to be taken into cognizance before that refund is now processed. But if you’re buying your ticket directly from the airline, then the issue of refund is a lot easier. But if you’re buying it through a third party, then it’s a little bit more complex.
There is also the issue that the airlines raised, which is passenger retention strategy and the entire system would take cognisance of each airline’s peculiarity and nuances. For instance, I bought a business class ticket from one of the airlines and on the day of travel, rather than use their aircraft with 12 business class seats, they used the one with eight and I was bumped to economy. Now, rather than me asking for a refund, they asked if I would take an economy class seat, which i did. They now sent me an email after the flight to say they acknowledge the fact that i took an economy class seat rather than my business class and for that gesture, they are offering me another business class seat for free. All I would need to do is give them 72 hours’ notice before I travel so that they can book me. That again, is a particular arrangement by the airline to address what ordinarily could have been a refund.
How airlines would benefit
All the airlines have something to benefit because, ordinarily, the seat that you would give on the platform would be a seat that would have been perished. If wasn’t given, you would fly empty, so, it is in the airline’s interest to take it. Now, the seat that would be filled by a passenger from another airline who ordinarily, if he or she hadn’t flown on that particular service, will be disenfranchised to a point where they would say, you know something, we will not follow this airline anyways.
In terms of passenger retention strategy, if the airline that has sold the ticket offers this option to the passenger, they don’t necessarily lose the passenger. Rather, the passenger sees them as a caring airline and would rather fly them still. So, for the psyche of a passenger, it’s like, oh, this airline did this for me, so, next time I would still fly them. If you do enough for your passenger, even if and when you don’t carry them, they’re still loyal enough to come back. So these are the things that were built into this.
Conception
The idea was there since 2006 when I conceived it and discussed it with the former NCAA DG, Dr. Demuren and at the time, it was agreed upon but somehow somebody wanted to steal the idea.
But with the current minister of aviation always talking about passenger convenience, we said, why don’t we have this as a solution? We now put the entire gamut together and an ‘Identifly’ app which identifies the passenger positively links your national identification number to your BVN. It knows that you are the same Roland Iyayi and there can’t be two of you. So, once you have that, we are removing the possibility of people coming to the airport to buy a ticket last minute using somebody else’s name to fly instead of their names.
Ultimately, it allows for every airline to be able to do online check-in even though they don’t have a facility directly because this particular app is tied to the back end of the airline’s inventory, so it sees what they have available and what they don’t have available. When you buy a ticket and you impute your booking reference onto the ‘Identifly’, it can check you in completely. So, it reduces the cost of checking in for airlines. So, what we are now hoping to happen through the NCAA is to encourage the airport company, that is FAAN and by Bi-Courtney, for instance, to provide the QR codes that can be read for each passenger and each flight. The benefit of this is that with this system provides a repository for accurate data.
Monetisation
The platform would be sold through adverts. There is also an insurance premium that is paid by the passenger, so there is a percentage of that which would be shared through the entire system such that the airline would earn, the platform would also earn and the passenger would benefit.
It’s a win-win all round but you see because a lot of people don’t understand how some of these platforms work in terms of monetization, they think that way they subscribe to it they’re paying for it. At the moment, three airlines have indicated interest and the idea is to get them on board, that is, Air Peace, ValueJet and Ibom Air. Arik Air is also interested but we haven’t had any major discussions with them. The idea is to start with three or four airlines and when others see how effective it is, they would buy into it.