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Louis Ibah
Appearing before the Senate Committee on Banking, Insurance and other Financial Institutions to advance ways on how to reform the aviation sector, the Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Ahmed Lawan Kuru, urged the Federal Government’s to designate Arik Air as national carrier.
Kuru, who has managed Arik and Aero Contractors under AMCON receivership in the last four years, did not only express the need for the National Assembly to come up with reforms that ensure local airlines operate proficiently and profitably, but called for policies that could curb the harm done to the economy and the pride of Nigerians with the dominance of foreign airlines on international routes.
One only needs to consider the case of over 500 stranded Nigerians in South Africa that were recently brought back to Lagos at zero cost aboard Air Peace Boeing 777aircraft following the xenophobic attacks in that country to appreciate the importance of a strong and vibrant airline to a country.
Displaced and hopeless with their businesses destroyed by senseless South African protesters who saw them as threat to their economy, the least favour these Nigerians expected from their government, was bringing them back home safely.
On the day that the first batch of 187 returnees touched down the Murtala Muhammed International Airport Lagos, the country was thrown into celebration as families and friends heaved sighs of relief seeing their loved ones return home safely.
Then came another contingent of over 315 persons from South Africa, with majority testifying that the first time that they ever felt a sense of being Nigerians, was the day they were flown out of Johannesburg.
Two of the returnees, Mr John Onuoha from Abia and Jude Anthony from Edo, told newsmen that they were unjustly attacked by South Africans, who destroyed their businesses and properties in fresh xenophobic attacks which began on August 29, 2019.
They praised Air Peace management for its magnanimity, saying there was no place like home.
It takes a country with a vibrant flag or national carrier to ferry over 500 citizens from an unfriendly or dangerous zone to safety. Air Peace in February 2018 became the first Nigeria airline to acquire the longhaul Boeing 777, and by June 2019 it increased the fleet to three. It also obtained the IATA Operational Safety Audit (IOSA) within its first two years as evidence that its operations align with global best practices and standards.
There is no doubting the fact that even the biggest opponent of a vibrant flag carrier, had cause to reconsider their stance, knowing what fate could have befallen those stranded Nigerians in South Africa without Air Peace acquiring these wide-bodied Boeing 777, and making it available when it was most needed.
Taking stock after 5years
The Air Peace rescue mission in South Africa, undoubtedly, counts as one of its feats, says travel agent, Agatha Ekosi.
“It redeemed the image of Nigeria abroad, restored dignity to thousands of citizens, particularly those resident in South Africa, and showed what local airlines can achieve if given the necessary regulatory and government support,” said Ekosi.
The journey to that feat, however, started on October 24, 2014 when the airline launched its operations with seven aircraft on five routes.
“It is my belief that I can use this airline not only to contribute to the economic development of Nigeria, but also for its peace and stability,” said Air Peace Chairman/CEO, Allen Onyema at a speeh delivered in Lagos to launch the airline’s operation.
Onyema, at the event promised Nigerians a safe and reliable airline that would be professionally managed with the best hands hired, irrespective of tribe or religion.
As the airline marked its fifth anniversary on October 24, 2019, it became necessary to take stock of performance, even though to many the challenges ahead certainly make the successes of the last five years appear like a drop of water in the ocean.
Challenge of aircraft fleet
One of the major challenges facing the aviation sector after the liquidation of Nigeria Airways in 2003 is the significant shortfall in the fleet of local airlines.
Aviation thrives on availability of aircraft; in fact, it is because of aircraft that governments invest in airports and allied facilities.
Sadly, with a population of over 200million people, the combined fleet of Nigeria’s nine commercial airlines (Air Peace, Aero, Arik Air, Dana, Medview, Max, Azman, Overland, and Ibom Air) is not up to 60. Ethiopian Airlines current fleet size is estimated at 120, and this enables it to operate the most thriving airline hub in Africa. How do Nigerian airlines hope to compete in the same market with Ethiopian Airlines, or the likes of Emirates, Qatar, British Airways, when the total fleet of all its airlines is not up to a quarter of what Ethiopia has.
The crisis of inadequate fleet by Nigerian airlines becomes so glaring during yuletides, especially Christmas and New Year, when hundreds of passengers are left stranded and frustrated at airports due to flight cancelations and delays.
“It could have been worse without Air Peace,” said Ekosi. “You only need to imagine taking out the 27 aircraft that Air Peace brought into the industry in the last five years from the airports, and the chaos that will create for passengers,” she added.
From seven aircraft in 2014, Air Peace has expanded its fleet size to 27 aircraft and is flying to Dubai, Sharjah, Monrovia, Freetown, Accra, Banjul, and Dakar. It became the first airline in Nigeria to buy B777 and also the first Nigerian operator to make firm orders for 10 Boeing Max and10 Embraer E195-E2s aircraft.
The deployment of the Embraer jets has gone a long way in achieving its no-city-left-behind initiative to integrate cities with abandoned airports with major airports in the country.
Also the launch of flight to Sharjah and Dubai has gone a long way in alleviating the suffering of Nigerians by offering cheaper options to Emirates and Etihad on the Middle East routes. Air Peace has also lined up Johannesburg, London, and Mumbai, for its next phase of its international routes. It is good that the airline has an interlining agreement with a Sharjah airline to traffic passengers beyond the UAE to other Asian countries.
The airline should, however, work towards an interline agreement with other airlines on its London, Johannesburg, Houston, and Mumbai flights. Sticking to on-time arrival and departure schedules would also be vital in sustaining the patronage of international passengers. Air Peace should also consider the immediate use of the Akanu Ibiam Airport in Enugu for some of its international operations, once the runways repairs is completed in 2019. This will save a lot of South East and South South passengers the stress and extra cost of having to first journey to Lagos or Abuja before travelling overseas.
On the domestic route, the airline has grown from the Lagos-Abuja-Port Harcourt triangle, to Uyo, Owerri, Benin, Asaba, Enugu, Kano, Kaduna, Warri, Akure, and Yola. Some of the domestic routes are serviced with the low passenger capacity Embraer E195-E2s aircraft under the no-city-left-behind project. Today, more Nigerians are flying than ever, given the options provided by the airline.
According to Onyema, the airline has created jobs for over 3, 000 Nigerians in the last five years, including pilots, cabin crew, ticketing and reservation officers, and engineers who had no hope of employment, thanks to the size of its fleet. Travel agents, cleaning and catering businesses have also benefited immensely from the growth in size of Air Peace aircraft.
Experts have said that one functional Boeing 737 aircraft on air can keep about 80 direct and indirect workers active.
But with over 300 pilots fresh from aviation colleges and roaming the airports in search of jobs, the feat achieved by Air Peace is enough proof of what local airlines can do if government partners them to secure funds to grow their fleet. Certainly, more jobs would be created for citizens and more local airlines would fly internationally, thus reducing the over $3billion lost to foreign airlines in capital flight according the the Airlines Operators of Nigeria(AON).
Government assistance
With the planned national carrier, Nigeria Air, no longer appearing a feasible project given complaints of funding constraints by government, the best response to halt the exploitation of Nigerians by foreign airlines lies in creating the right infrastructure, fiscal policies and diplomatic mediation for the emergence of a vibrant flag carrier, which is what most European and American countries are doing.
The International Air Transport Association (IATA), in its forecast for 2019 said most African airlines, like Nigeria’s Air Peace, Medview, Dana, Overland, Max, might not declare dividends to shareholders owing to unfriendly fiscal policies. According to IATA, it has become so costly to operate in Nigeria with exorbitant and multiple taxes eroding the profits of local airlines.
Chairman of the AON, Capt. Nogie Meggison, said there was the need for the Federal Government to take steps to boost the capacity of local airlines to stay profitable. A functional Maintenance, Repair, and Overhaul (MRO) hanger anywhere in Nigeria is most critical to having local vibrant airlines.
A situation where local airlines generate income in naira, but undertake mandatory C and D-checks for aircraft in foreign hangers in dollars sourced at exorbitant rate, would never make them profitable.
“Government support, low interest rates, fewer levies, abolishing multiple taxes, better airport infrastructure, runways and landing aids that are of international standard remains the best route to supporting a viable flag carrier,” said Meggison.
