By Chinelo Obogo
[email protected]
AT a meeting with the Minister
of Aviation and Aerospace Devel-
opment, Festus Keyamo, Airline
Operators of Nigeria (AON), had
urged the Federal Government
to carry out sweeping reforms in
the aviation sector after outlining
the challenges facing the sector.
The body had listed the scarcity of
foreign exchange, jet-A1 fuel, inad-
equate infrastructure, cost of capi-
tal and funding options, govern-
ment policies, multiple taxes, fees
and charges as some of the factors
impeding its success.
Director General of the Ni-
gerian Civil Aviation Authority
(NCAA), Capt. Musa Nuhu, who
spoke to journalists recently, ac-
knowledged that the country’s
difficult economic environment
was affecting the profitability of
airlines but noted that his agency
was always seeking ways to assist
airlines to remain afloat. He also
spoke in detail on other issues af-
fecting the sector.
Multiple charges
The Ministry of Aviation and
Aerospace Development estab-
lished a committee to look at these
multitudes of revenues to see how
they can be streamlined. But what
we need to understand is that a lot
of these charges are not from the
aviation agencies, but are more in
the cargo area. All sorts of people,
some are illegally making these
charges. So, aviation will start,
at least we will consolidate and
see where we can streamline and
merge those charges and see what
can be done. But there are a lot of
people and lots of charges have
nothing to do with aviation aero-
nautical charges. It is other organ-
isations that are in the airport that
put these charges. But, sometimes
as Nigerians, we need to all sit
down as a team and see the dam-
age we are doing to our country.
In Lagos, there are so many
charges. When you want to ex-
port your cargo, there are so many
charges and by the time you pay
those charges, your products are
not even competitive anymore.
That is why you see that a lot of
planes bringing in cargo leave
empty out of Nigeria, because
exports are not viable and lots of
these are charged by plethora of
these agencies. It is really hurting
us.
NCAA’s autonomy
The NCAA is a government or-
ganisation and its autonomy is on
safety regulatory functions. But
there are other government regu-
lations, financial regulations and
all that the NCAA must comply
with. The NCAA cannot exist on
its own and we say nobody in gov-
ernment should talk to us. There
is no civil aviation authority like that anywhere in the world. But,
when we take safety decisions,
like grounding of an Airline X,
then there is intervention that we
should reverse that action, then
that is interference with the regu-
latory function.
Airlines’ profitability
Nigerian airlines are operating
in a very difficult environment.
An airline cannot operate in iso-
lation of the economy it is operat-
ing in and the Nigerian economy
is in very difficult times. The cost
of financing is 25 per cent. That
is killing to start with. You take
a loan and you are paying 25 per
cent of whatever you make to the
bank. You are not talking of your
expenses, your cost, current and
long-term liabilities.
Quite a few of them are in fi-
nancial strait and some are okay.
So, that is the way it is. It is a very
difficult environment for the air- lines and we also do sincerely sym-
pathise with them and we will try
and see where we have flexibility
to make life easy for them.
Like the issue of insurance, the
insurance is from Lloyds of Lon-
don, from another country which
requires a huge amount of foreign
exchange.
Normally, insurance they say is
for one year, but we know an air-
line that has 20, 30 aircraft like Air
Peace for it to pay insurance is a
huge task, that is why we say pay
quarterly, at least to reduce the fi-
nancial burden, especially on the
requirement of getting foreign ex-
change at a time.
So, we try to assist the airlines
in that area, and those who have
debts, we reach an agreement with them. If I have N1 billion with you,
I am not asking you to pay that N1
billion to me, because if I do that, I
am going to kill your business. So,
we reach a Memorandum of Un-
derstanding (MoU) and they pay
an amount that will not cripple
their operation. But also, they have
to pay a reasonable amount to clear
those outstanding debts. Those are
the areas we have flexibility with
the industry.
ICAO audit
ICAO audited Nigeria and we
got 70 per cent, which is below the
global average, but we moved up
and we did not get any significant
security concerns. We met the au-
thority and the industry in a very
difficult time, and I keep saying
this, what we are doing, we are not
developing the system for the sake
of passing an audit. We are devel-
oping the system for sustainability,
to function the way it is supposed
to function, audit or no audit. We
are not here to pass audit. I am not
here to make ICAO happy while
my people are suffering. It is good
to get a high score, but I don’t want
us to get 90 per cent, then you
come back three months later and
we have gone back to our old hab-
its.
In ICAO, there is no pass or fail.
There is a target, if you don’t get
the target, ICAO will send you a
report with the protocol questions.
And you use that, they give you
three months to develop an action
plan and close some of those gaps
and send it back to them. There are
a couple of areas we didn’t do very
well in Nigeria and one of the ar-
eas is the certification of airports.
It is very critical; we lost 10 points or more in the area of certification
of airports. And to be honest, we
refused to certify the airports, be-
cause the airports did not meet the
requirement for certification. If
we had done certification and then
ICAO comes and see that they did
not meet the requirement, then
our credibility goes to zero and we
would have failed woefully and we
would have all sorts of significant
safety concerns. The reputation of
Nigeria will be damaged, the Ni-
gerian airlines and everybody will
suffer for that.
We have all agreed, going for-
ward we are going to do the certi-
fication. There is nothing like this
organisation did well or that or-
ganisation didn’t. When you go to
ICAO, they are not going to tell you
the NCAA did 100 per cent, FAAN
did 50 per cent or NAMA did 60
percent. There is nothing of such.
It is Nigeria they are going to put
there and we must collaborate and
work together.
Different sections in the NCAA
got different scores. Airworthiness
got 94 per cent. They went from
90 to 94, which is almost perfect.
Then we had the airport, because
of lack of certification, most had
56 per cent. Then we have air
navigation services, we had lots of
problems both on the NCAA and
NAMA sides. So it is those areas
that really dragged us down.
Operation was at 52 per cent,
they went up about 11 points. Still
a bit poor, but at least, the direc-
tion is in the right trajectory. We
are not even waiting for the ICAO
report, we know where we have
issues and the work has started.
After you have done your audit and you think you are okay, you
invite ICAO but this time around,
you pay for it. They will come and
look at you to validate all the ac-
tions you have said you have done
and then your score goes through
the roof. And I am sure if we work
collaboratively with the support of
the press, the ministry, the entire
industry, believe me, our scores
will shoot through the air. At least
the audit has shown us where we
are. If we were deceiving ourselves
or we were blinded by it, now it is
quite obvious and we will work in
resolving those areas.
Payment of 40% revenue
generated to the federa-
tion account
Whatever we do, the govern-
ment takes 40 per cent at source. If
Air Peace pays me N10 million nai-
ra to go and inspect their aircraft
for instance, the government takes
40 per cent out of it. I can’t tell Air
Peace to go and give the govern-
ment N4 million, so I have to take
from my own money to conduct
the aircraft inspection for it.
Lack of sufficient techni-
cal staff
My staff leave the agency regu-
larly and that is the problem of
salary. You are earning N500,000
monthly and a particular airline
comes and gives you N1.5 million
monthly, what are you going to
do? It is unfortunate, that is the
way it is and that is why we need
to be removed from that salary
structure. Kenya as of two years
ago pays some of its technical staff
about $10,000 monthly and they
were going to increase it. So, you
pay your people peanuts and you
expect them to do magic.