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By Chinelo Obogo [email protected]
As President Muhammadu Buhari winds down his eight year regime on May 29, this year, aviation experts have began the setting agenda for the incoming administration ahead of their inauguration.
From the establishment of a Maintenance, Repair and Overhaul (MRO) facility, to the proposed concession of four international airports, the setting up of a national carrier and how Nigeria can benefit from the Single African Air Transport Market, the consensus for the new year is to see improvement in the sector with more airlines ushered into the market.
But some avaition experts are also hoping that the debilitating issues of forex and aviation fuel scarcity that plagued the industry last year would this year, become a thing of the past.
Expectations
With the industry fully recovered from the COVID-19 pandemic era and presently performing at 111 per cent, President of the National Association of Air Pilots and Engineers (NAAPE) Abednego Galadima, told Daily Sun that he is expects sustained growth in 2023.
“My expectation for the aviation industry is that of sustained growth, I would be happy that the passenger volume recovery continues. It is becoming a little scary with the resurgence of covid in China and I hope it doesn’t spread. I am happy that new businesses are coming up and I believe you are aware that Nigeria Civil Aviation Authority (NCAA) has given Seven Star their Air Operators Certificate (AOC) and it is expected that they would try to create their own niche in the aviation market. I expect that some of these airlines that are on the verge of commencing operations to commence.
“There is always room for improvement. I would want to see a situation where some of the sunset airports would have 24 hours operation and I also expect improvement of airport facilities. I would want to see a situation where the staff working conditions at some of the aviation agencies are improved.
“I always advocate for an increase in air travel volume because that is where the money is and it is good for the airlines themselves. But in a situation where the cost of tickets are high, it would reduce the number of those that would desire to fly by air. I expect an accident free year.
“The FGs aviation roadmap is a very good document for the industry and I do not expect that with the winding down of this administration, it would be jettisoned, particularly the MRO. I expect speedy implementation of some of the projects so that the industry can start reaping the benefits,” he said.
Former Rector of the Nigeria College of Aviation Technology (NCAT), Capt. Samuel Caulcrick, is of the view that establishing an MRO this year is far more important than establishing an airline. He said this means building the Nigerian economy instead of creating business for other economies and is advocating the need to situate an indigenous MRO which will remove the cost of ferrying aircraft in an out the country, expending forex and reducing the consumption of Jet A1 which is an additional cost to airlines.
“It’s a shame that those in charge have since been contented with flying aircraft to Europe or the U.S. for maintenance. Those with oversight of aviation ought to have shown interest in how and where maintenance is done and this is another major reason for losses. Flying aircraft out for maintenance keeps your profit graph on the floor.
“For me, rather than establishing an airline, the priority should have been a maintenance facility. At this stage in the history of aviation in Nigeria, we ought to have attained mastery in various aspects of maintenance with the different hangars laying claim to expertise in one or two aspects of aircraft maintenance,” he said.
On creating an enabling environment for MRO investors Caulcrick said, “This can be done through policy. For instance, the NCAA can say it would not renew an existing AOC or issue an AOC to an intending operator without a local MRO identified in the application form. The government can give them a timeline because this could take up to three years to accomplish. Once an investor knows that his business is being protected, then, they will be willing to invest in the industry. They can then approach a bank to seek a loan. A policy will naturally create a market.”
Nigeria Air
The establishment of a national carrier which was to be done through a Private Partnership is one of the major projects which the administration of President Buhari promised would have taken off before now.
Last year, Sirika announced Ethiopian Airlines Consortium as preferred bidder of the proposed Nigeria Air Limited with a combined score (Technical and Financial Bid) of 86.7 per cent in the final quarter of last year. He said that all preparations for the establishment of the national carrier have been concluded and the airline will kick off within six to eight weeks as it has commenced recruitment of workers and that the aircraft will soon be coming into the country.
But the Air Operators of Nigeria (AON) had on November 19, 2022, filed a suit against the establishment of Nigeria Air by the Federal Government after the liquidation of the former, Nigeria Airways. AON said that the Ministry of Aviation did not comply with the three stages of public procurement process as stipulated in the Act of the Infrastructure Concession Reg-ulatory Commission (ICRC), which include advertisement and review. At the time of filing this report, the Ministry of Aviation and the Federal Government were yet to file their defence.
Galadima is fully in support of a national carrier to be established this year, saying it is something that has enormous benefits and should be able to make Nigeria take advantage of SAATM. “In a situation where we don’t have a national carrier, we would only be shortchanging ourselves as a nation and as an industry. There is no doubt that you need healthy competition to be able to have a robust industry, so the more the merrier as long as the issues around it is resolved.
“Like I said, the operators should have invested in the project so that they would have a say and a seat at the table. But a situation where they come back to complain, makes it look like an afterthought. I believe that the carrier should be allowed to take off,” he said.
An aviation consultant, who appeared on the programme, Business Edge, Sean Mendis, said Nigeria Air has failed to take to the skies in 2022 and that we may see that happen in 2023.
Mendis said African governments bear the blame to the slower recovery of the sector in comparison to other countries and the reason for this is that they feel the need to want to protect the preferred airline of their country, rather than supporting the entire sector as a whole. I will use South Africa as an example, seeing how they have spent good money after bad to prop up South African Airways which was on the brink of failure before covid and the expensed that have been thrown into that has kept a bankrupt airline alive and has skewed the market in such a way that previously profitable airlines to fail.
“Nigeria Air makes my top three losers list of 2022 because we have been hearing about it for many years. All over Africa, there has been too much focus on this pet project of the Nigerian Minister for Aviation. It is not something that the market necessarily needs and that has been to the detriment of the aviation industry. You have seen lawsuits and protests and Nigerian aviation is poorer for it than it would have been if this project had not been pursued.
“In Nigeria, you see the government spending a lot of money to establish their new national airline and not as much money in terms of supporting the existing carriers, that is in terms of supplying jet fuel, providing foreign exchange for both Nigerian and international carriers operating in the country and all the basics in the country that needs government’s intervention and support have been ignored at the risk of supporting pet projects which often black holes where tax payer funds end up disappearing,” he said.
Another expert, Alex Nwuba, who was on Channels TV, said Nigerians want a national carrier but the problem has been that there is lack of information on the intent of the government. “The information that flows out is not consistent with the vision that Nigerians want to have. For instance, we don’t want a Nigerian Air owned by Ethiopian airlines, where is the pride in that? The challenge for everyone has been that we are pushing forward this national airline but the ownership structure doesn’t quite work.
“The idea is that it would be majorly owned by Nigerians and to the government, ‘majorly’ means 51 percent, where the Federal Government would own five percent and Nigerian investors would own 46 percent and Ethiopian will own 49. But if you look at it with the way businesses are conducted, 49 is the largest shareholder, so they would be in the position to shape the policies of the airline. In doing that, are the policies consistent with what Nigerians expect? ET is a government owned airline, so would they be pursuing the best interest of Nigeria or the best interest of Ethiopia.
“Africa is looking towards a single air transport market, where you can fly from Akure to Johannesburg, from Ibadan to Egypt. But when you have that and you don’t have control of our own industry, you lose many things including our national security interest. ET has proposed a 15-year tax exemption and it is not unsusal to do that. When you come into a market, one of the things you want is tax relief, so you can save a lot of money. What concerns me is the 46 percent share. ET has been successful because they were allowed to operate as a private enterprise which the government is envisioning but they are taking a wrong approach.”
