Follow Us on Google
By Chinelo Obogo [email protected] 09051862508
Airport infrastructure have become a sore point in the Nigeria’s aviation industry. Aside some international airports, many of the country’s domestic terminals do not operate beyond 6pm due to the absence of runway lights. Although some domestic airlines have long urged government to en- sure that airports have the necessary infrastructure to make for better operations and profitable businesses, not much has improved.
It was against this backdrop that the Chairman of United Nigeria Airline, Mr Obiora Okonkwo, who was in Lagos recently to brief the media on the first anniversary of the airline, said some of the air- port infrastructure are working while others need urgent upgrade to guarantee efficient operation especially at peak seasons like Christmas. He also listed other challenges facing local operators airlines including the astronomical rise in the cost of jet fuel, scarcity of forex and double digit inflation.
Amidst these challengers however, he said United Nigeria has made giant strides, but would be working in the coming years to expand its operations to all the geo political zones in the country.
Excerpts
One year of operations
Passenger airlift
We have been able to unite between 250,000 to 300,000 people in the last one year and to the glory of God, they have all taken off and landed safely. We have also grown our location from regions to regions, cities to cities. Today, we are covering South West, South East, South South and the Federal Capital Territory 9FCT), Abuja. Right now, we are in Lagos, Port Harcourt, Abuja, Osubi, Bayelsa, Anambra, Enugu and Owerri. I may not know how it has been in the past, but some of the friends and colleagues in the industry have been saying this is commend- able.
But, we are not dwelling on what we have been able to achieve, we have an eye on the future. By this time next year, we intend to cover the entire six geo-political regions of this country. And for that to happen, we will be increas- ing our fleet and at the same time, expanding our workforce. We have set a big task for ourselves that within a few months, we would have started our regional flights; West Africa and hopefully, by this time next year, we would have grown to some other countries of Africa beyond the region. These we intend to achieve despite the difficult operating environment.
Difficult business environment
The industry has witnessed a lot of inconsistencies in the past one year. For our first ever flight, we paid N190 per litre for aviation fuel, but as at today, aviation fuel has risen to N400 per litre. The least ticket we sold a year ago was N23, 000 when aviation fuel was N190 and the official rate of naira to a dollar then was N340, but to- day, if forex is available, it is N450 but when it is not available, the alternative market is N570 to a dollar. Despite this, you can still buy your ticket at N20, 000 to N21, 000 and what this means is that as long as all the airlines are buying from the same market and selling tickets at the current rates, any ticket that you buy is being subsidised by the airlines. Why did I say this? Aviation fuel, depending on the aircraft type you are flying, could take up to about 30 to 40 per cent of your cost components. As you know, for every ticket you sell, you give five percent of Ticket Sales Charge (TSC) to the Nigerian Civil Aviation Authority (NCAA), you have other deductions to the Nigerian Airspace Management Agency (NAMA), the Federal Airports Authority of Nigeria (FAAN) and to other airport owners. As a matter of fact, by the time you remove these deductions from the N20, 000 that you charge, you have to use your money to take care of other operational needs.
In year 2000, you may have bought an air ticket at N2,000, which was about $100 then and 99 per cent of aviation component is foreign exchange denominated. From that N2, 000 up till now, the cost of aircraft has not reduced, salaries to staff have increased, the landing charges and other charges have increased, yet this item of ticket remains same. Safety is very critical in aviation business, but you cannot deal with safety in isolation of efficient operations. It must come with proper financing of your operations. The cost of tickets is very important, yet aviation is a chain and the airline operators are at the centre of the chain. However, there is need to establish a better customer service with operators.
Subsidising air tickets
We did our feasibility studies, understood the challenges in the business today and we plan to re- main. In some countries, when you are talking about inflation, you can project what the inflation will be in the next one year, but when it’s doubling and within a year, aviation fuel jumps from N190 to N400, I can tell you that even if you bring a spirit and it does all its projections at the rate of N190, for accuracy, it is plus or minus five percent. Aviation fuel is N400 and believe me, by the time we get to the month of March, it might get to N500 per litre. It is beyond anybody’s projection and nobody would have said the naira you assessed at N340 will grow to N570 within a year. You could have said the worst case scenario; naira would be available at N350 to N360. You can use it to do your projection. We have top management team and we have enough knowledge in our organisations, but things are happening so fast and very unimaginable for people to even comprehend.
Flight delays, cancellations
There are many reasons a flight can be delayed or cancelled as the case may be. This may not be the fault of the operators. It could be weather or operational issues. We have seen a situation whereby a flight is scheduled to fly to Owerri, but there is delay at Asaba because of the weather condition, but the passengers may not understand this and decide to go violent. This is a challenge we all have and it is not good for the industry. You may want to take off and have a snag in the process and for safety reasons you cannot fly.
How government can support aviation sector
There is no support given to the sub-sector by the government that keeps the aircraft flying and keep the passengers on the move that is too big. The reason is because this is a huge revenue source for government. About four agencies of the government directly feed from the operations of the airlines. So, if government would support it in any way possible, they will still benefit from it. Apart from the employment that it will drive, those employees still pay different taxes to the government.
Such a sector requires attention, especially in the area of special funding and foreign exchange access. If you are to go through the current foreign exchange access, you will have numerous delays and Aircraft on Ground (AOG) be- cause within 24 to 48 hours, you are supposed to find a spare part for any damaged spare part for the aircraft to be back to services, but because of the cost of this spare parts and the poor assessment of Nigeria, these spare parts are not readily available to operators. So, you don’t have so much to keep on ground to be able to cover the AOG.
Airport development
Some of the infrastructure at the airports are working well, while others are not working efficiently. If you get to high seasons like Christmas, it is either the infrastructure has collapsed or is near total collapse. I will also think that airports are built for services and operations. About 80 to 90 per cent of airports in Nigeria are on self-regime and one will begin to ask why. You have to schedule your operations to make sure you start your operations and end within the sunset. These have to be looked into because it costs the operators huge sums of money to operate beyond the 6:30pm. There is no need for that. This also leads to a lot of flight cancellations among the airlines. If you have the opportunity to fly to 11pm or 12am, the passengers will get used to it and the airlines will be able to increase the customer satisfaction and increase the confidence of the customers.
Aviation industry is not just a business venture, but it’s a serious security issue and that is why promoters are subjected to security clearance and it’s also a great contributor to the economic development of the country. It is a very serious sector that requires attention. We are grateful to the government for what it has done so far, but if more is done, there will be more benefits for the government and the industry at large.
Aircraft wet lease
Airbus A320 is like any other aircraft. During the last Christmas season, you might have seen it a lot and because there was increase in passenger traffic, we had to go for an aircraft that has the size we need. Before now, we may have gone for Boeing 737 aircraft brand, but those ones were not available. That was why you see more of the A320 aircraft, but it’s just for capacity and it’s a very reliable ma- chine, not just in Nigeria, but in the world over.
Our staff strength
Today, we have over 500 direct staff and with our expansion plan, we hope to grow to over 1,000 staff by next year.
Partnership with the Enugu State government
About two weeks ago, we visited the Enugu State Governor and presented our requests before him. The governor actually agreed to all the requests and saw them as a necessity for us to grow. We are very hopeful and believing that he will match words with action. For instance, we asked for an appropriate location to build a corporate headquarters, staff quarters, and the Maintenance, Repair and Overhaul (MRO) facility project needs space at the airport. There are issues of ownership between FAAN and other agencies that have been delaying the takeoff of that plan. We asked for interven- tion to see how that can be implemented.
Interlining, codeshare with foreign airlines
We are open and available for interlining relationship with these airlines and we are also promoting among the operators local inter- lining agreement, which is receiving a very positive response. You will see a whole lot of this taking place very soon. I don’t see why passengers of United Nigeria Air- lines cannot be in the cabin of Air Peace. This will help the industry to grow and help the on-time departure for the airlines. United Nigeria is already in a discussion with some of the local airlines on interlining.
On-time performance
We have the full statistics of the on-time performance and we agreed that it requires a lot of improvement, but a lot of them are not internal, but external. Just about two weeks ago, there was scarcity of fuel in the sector, which affected the performance of the airlines. From our available statistics, we did about 70 per cent on- time performance in the last one year. The component of the 30 per cent of the delay is very technical.
