Med-view revenue declined by 70 per cent last year.


If available evidences are anything to go by, one of Nigeria’s promising Airline company, Med-view Airline, may have gone the way of history, as another airline in Nigeria that could not survive flying the turbulent skies. Med-View Airline came into the Nigerian Aviation Industry as one of the country’s promising Airline in 2007.

It made a remarkable entrance into the industry with its performance in that year’s Hajj operations shortly after its incorporation and it changed the whole concept of pilgrims airlift in Nigeria with remarkable performance in airlifting passengers earlier than expected during Hajj 2007/2008.

It was this feat that impressed the authorities of National Hajj commission (NAHCON) that it was contracted to carry out rescue operations for pilgrims stranded in Ilorin, Lagos, Sokoto, Maiduguri and Yola during outbound to Saudi Arabia and those stranded in Saudi Arabia during inbound to Nigeria.

Also, in 2008/2009, Med-view recorded excellent performance during its second participation in pilgrim airlift and rescue operations for the stranded pilgrims to the delight of NAHCON. In 2009, Med-view Airline witnessed another feat in participating in Umrah (lesser Hajj) operation to the delight of some state Governments after the airline track record since incorporation in 2007, in helping to airlift Pilgrims smoothly.

The Airline commenced domestic operation in November 2012 with a fleet of 2 Boeing 737-400 aircraft at inception and added another one Boeing 737-800 just a month after. Following the over-whelming acceptance of the new baby in the Nigerian market courtesy of its excellent service delivery, it plans to introduce two more B737-800 in

the 2nd quarter of 2013 in order to alleviate the plight of the local travelers and offer customers value for money. In no distant future, Med-View airline intended to operate regional and international air services after obtaining necessary permits from the regulatory authority.

Listing on Stock Exchange

However, in January 2017, Med-view Airline listed on the Nigerian Stock Exchange and the stock debuted at about N1.50 upon listing and peaked at over N2 a year later as investors hoped its listing will help it dominate the skylines of a troubled Nigerian Aviation Sector.

Ironically, two years after its listing at the Stock Exchange, Med-view Plc is rather being dominated by events that have raised public concern about why most airlines in Nigeria have never lasted that long before falling out of the skies.

Financial Performance:

Before the end of 2017, Med-view had posted revenues of about N36.9 billion and profit after tax of about N1.2 billion. It was it’s the best performance in over five years. But rather than sustained the growth and the development of the company, it began to witness a downturn of revenues tumbling by over 74% to N9.5 billion in 2018.

The company three main revenue lines are Hajj Operations, International Operations and Local Operations. Apart from its Hajj operations with a gross profit of N758 million, International and Local operations posted gross losses of N2.2 billion and N1.4 billion respectively.

Revenue from its international operations fell from N13.8 billion to N2.8 billion while local operations fell from N14.8 billion to N3.6 billion. The company also made provision for bad debt of over N2.5 billion. In a nutshell, the company made an N10.3 billion loss after tax in 2018, as against a N1.2 billion profit after tax in 2017.

The Chairman of the company, Sheik Abdul-Mosheen Al-Thunayan, had attributed the crisis in 2018 to “political tension and tight market liquidity” as reasons for its poor performance.

How Med-view Problem Started

At the onset of its current challenge, Med-view had officially complained about growth in air passenger travel globally, coupled with high and changing expectations and behaviour from passengers and the increasing and highly competitiveness of the airline business, with an interesting twist of surpassing one another by the major players.

Med-view claimed that the new competitors are not necessarily registered airlines, but rather charter services by individual and corporate entities who have interest in aviation and potential passengers are no longer waiting for airline offers to travel round

the world, various groups and organization are putting up irresistible packages for passengers and bringing them to fly with registered airline. This in turn is splitting the revenue to be generated by the airlines in scheduled operations.

The implication of this is that, the airline has admitted that it’s getting obliterated by its competition. Changes in passenger disposable income and preference also mean they can’t charge higher to stay afloat. If this is done, then how would they face competition from the likes of Airpeace, Arik, Dana and yet have to contend with local private jet operators?

Too much to handle

Also, another reason that marked the demise of Med-view was in 2017, when the European Union (EU), banned several airlines including Medview from flying into its airspace. To continue to cater for its customers, the airline embarked on a re-protection exercise which basically enables airlines to transfer their passengers to other airlines at an often higher cost than the original ticket amount paid by the passengers.

Medview lost the lot to transport its passengers directly to London during this period.

At the same period of its financial crisis, it also had to contend with the controversies surrounding the ownership of its aircraft.

It would be recalled that, the popular belief in public domains was that Med-view never owned any aircraft. It took the then Chief Operating Officer, Michael Ajigbotosho, to clear this impression when he said “the four aircraft in its fleet are wholly owned by Medview Airline Plc, and not leased as being reported. In setting the records straight, the aircraft being referred to were acquired at various times from Aerocap, and not from Thai Airways”.

He said there was a lot of misinformation about the airline indebtedness to vendors, saying that anyone who wants to know the truth should reach out to the concerned agencies including FAAN amongst others.

The statement said in an ongoing business, it is normal to have agreements with service providers to give line of credit, which is a standard industry practice.

Medview airlines remain the only Nigerian carrier in the country that has declared profit in the aviation industry.

Liquidity status:

According to a reliable source, who spoke to BusinessHallmark on the basis of anonymity, “so far, Medview’s main lender has been First Bank to which it owes about N1.5 billion. It also banks with Zenith, GTB, FCMB and Ecobank.

“Apart from that, Med-view also owes its (main creditors) trade partners,  about N14 billion (it was N6.9 billion in 2017). Medviews trade partners are like banks and even more potent than banks. Without them, the airline can’t carry out its daily operations and could effectively run out of business” the source disclosed..

Also,  in an interview with BusinessHallmark, a Lagos-based aviation analyst, Francis Opara, said that, “one of the challenges that ails airline in Nigeria and taking Med-view as a case study is that anything pertaining to aviation business had always been foreign based until recently.

“What we are trying to say here is that, Nigeria lacks most service providers companies to keep airlines in the country as required by international standard. Every of its services and training were often done overseas. There is virtually nothing you want to do as an airline that you would not involved other developed countries. It is only recently that we now begin to witness the advent of some service providers”.

Opara also said, “Aviation is foreign based. Most of the things pertaining to it, even services of its aircraft has to be imported. And the industry is highly regulated because it must always strive to maintain standard. Things cannot be done any how in the airline business.

“We have various authorities like the Nigerian Civil Aviation (NCA) that ensure airlines are up to international standard in the way and manner of their operations”.

Opara also attributed the role of management and perception of airline business as another determinant for the survival or low mortality rate of some of the airlines that had come and gone in the industry. He is of the opinion that the perception and role of

management is very paramount in the survival of Airline business.

“If you look carefully at the history of the industry, we have had a lot of airlines that has come and gone. In most cases, it has to do with the management. The error could be attributed to the way they managed the airline business. Airline business is not what you come into with the perception and desire of making instant profits, because it is highly competitive, there are times things could be good and there are times it can be that bad.

“Another challenge of airline business like I said earlier is that, everything about it depends on developed countries, but we thank God that Euro Contractor is now an approved maintenance organization and with that development not everything that an airline in Nigeria needs that would have to be taken outside the country to achieve.

So airlines that need to go to foreign countries for services as before”.

Responding to question on if there is the possibility of Med-view flying again in the sky, the aviation analyst expressed optimism about this and said it is just a matter of time for things to shape up for the ailing airline because they are already working on some of its aircraft to achieve this aim.

He also expressed hope for stability and sustainability for the nation’ airline businesses with the emergence of Euro Contractor which is now maintaining aircraft. Before now, there was nothing like Maintenance Repair Organisation (MRO), which was one of the reasons survival of airlines in Nigeria was very remote.

“I know Med-view is going to come back in the sky because its aircraft are at the Euro Repair Organisation Center. So, it is just momentarily and they would be back on the line again. “Also, with the establishment of Euro Contractors which can maintain

and service some of these airlines, there would be stability in the aviation industry. The idea of seeking foreign services to maintain aircraft which runs into hundreds of dollars because of the exchange rates is gone.

However, Okpara also reacted to opinion and impression that government policies was also one of the reasons responsible to the mortality rate of some of the fallen airlines in Nigeria and as was attributed by the Chairman of Med-view in 2018. He said, government has been trying its best for the survival of airline businesses in the country.

“The federal government had sometimes ago initiated a soft loan scheme that aimed at assisting the airlines to overcome its challenges. All that required of them were just some basic requirements to be able to apply through the Central Bank and access foreign exchange at the official rate. It was the federal government intervention loans for the airlines. So, the idea that government policies have been interfering with growth and development of airlines in Nigeria is a wrong notion. The federal government has tried its best so far.

“Another challenge affecting our airline is that, for instance, you could be making profit in a whole year and all of a sudden, an extract of the aircraft is due for a change or service, you may be surprised that all the profit made for that year could be expended on just that area. Most especially, when it has to do with overhauling or total change of the engine. These are challenging areas in airline business that are inevitable and it needs absolute care because it is a challenging terrain.

“We cannot also downplay the issue of exchange rates which had not helped matter as far as the airline business and training of pilots and other essential staffs in overseas country. Before now, an average airline must sent its pilots for overseas training yearly or every two years to meet up with required standard and  these gulped a lots of dollars. But now, we now have some airline facilities and training centers coming up in the country and I think it would help to cushion the effects of cost of training on airlines.

Opara, suggested further that, “To encourage these development in the aviation industry and also assist service providers to grow, government should come up with certain regulations that would help domesticate training centers and for any airline to go outside the country to obtain services or training should be in an exceptional cases whereby there are no such service providers within the country”.

Capital Structure:

Last May 2018, the company announced a planned investment by Avmax, a Canadian firm. This it claimed would enable the airline to expand its fleet. So far, the company’s annual report still lists Abdulmoshen Al –Thunayan, Alhaji Muneer Bankole, Ocean Trust Limited as majority shareholders with 36%, 39.5% and 10.2% shareholding respectively, unchanged from 2017.

While the market cap is still about N17 billion, the company is worth just less than zero in 2019. Net Assets have not gone from N7.3 billion in 2017 to negative of N4.1 billion at the end of the first quarter of 2019. Med-view is thus technically bankrupt.