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Stories by Louis Ibah
The low points
Activities in Nigeria’s aviation industry for both operators and regulatory agencies in 2016 were marred heavily by the poor state of infrastructure at the airports, low revenue yields for airline investors, debt overhang to service providers and workers, as well as the scarcity and exorbitant cost of insurance premium, aviation fuel, and foreign exchange (forex). It took more than six months before the aviation sector got a substantive Minister and this factor had contributed immensely to the slow pace of development that characterised the industry in the remaining part of the year.
For the majority of Nigerians, 2016 would go down as the year in which they witnessed the scaling down of operations or total shutdown of three of the leading domestic airlines due to the above highlighted issues. Signs that things would be tough started emerging when Dana Air and Aero Contractors announced the suspension of their Lagos/Accra flights due to the scarcity and exorbitant cost of aviation fuel. More bad news followed thereafter within the year as Arik Air was shut down twice but later reopened for its inability to pay insurance premium and owing workers several months of salaries and allowances. First Nation, which operates just two aircraft was asked to shut down due to maintenance issues with its aircraft. Aero Contractors also shut down its operations for three months owing to several reasons bordering on aircraft maintenance, debt to creditors, and unpaid staff salaries. The good news, though, is that by the end of the year, all the three airlines had returned to the sky and assisting in airlifting Nigerians to various destinations within and outside to celebrate the yuletide with their families.
For the international airlines and Nigerian travellers on the international route, 2016 was one tough year they won’t forget in a hurry. A new Central Bank of Nigeria (CBN) policy restriction on forex repatriation had seen about $575 million earned from ticket sales trapped for almost nine months and hampering the operations of the foreign airlines. Most of the airlines had threatened to pull out due to the forex restriction policy and it was a threat that was indeed executed by Iberia and United Airlines.
Within the year also, forex scarcity forced airfares on international routes to go up by 100 per cent and Nigerian travellers were made to pay through their nose to keep overseas engagements.
For airport operators and regulators like Federal Airports Authority of Nigeria (FAAN), Nigerian Airspace Management Agency (NAMA) and the Nigerian Civil Aviation Authority (NCAA), in 2016, they recorded very low revenues. Most airlines were in financial distress and found it hard to remit the 5 per cent mandatory payments from ticket sales to fund their operations as well as to pay navigational, landing and parking charges at the airports which they operated into. An attempt by the government to privatise the airports in a bid to boost available infrastructure was resisted by labour unions in the industry forcing a reversal to a concession programme that also failed to see the light of the day by the close of the year.
Analyst, Capt. Dele Ore, noted that 2016 would go down as a year in which Nigeria’s civil aviation industry faced a shortage of skilled indigenous manpower, a trend that now sees the presence of more foreigners taking up piloting and aeronautical engineering jobs in the country.
“I am worried that it will be much more difficult to get Nigerian Commanders in the next 10 years if we continue in this way by allowing foreigners dominate our domestic flights because we now have a lot of young pilots roaming the streets looking for jobs and they are not finding the space in the country because of these foreigners,” Ore said in an interview granted Daily Sun in Lagos.
Highpoints
However, amid these challenges, 2016 ended on a high in terms of safety operations as no air crash was recorded anywhere in the Nigerian air space. According to aviation experts, safety, especially of airlines and passengers on board, remains the top consideration and the major drive of all aviation policies all over the world. And in this regard, Nigeria discharged itself creditably.
Some other successes were recorded in 2016. The first was the implementation of the waivers for Customs duties on imported parts, which brought a lot of relief financially for operators. The second was the Federal Government mandating the CBN to grant a special sectoral allocation of foreign exchange to airline operators in the Secondary Market Intervention Sales, which ensured that airlines had access to forex to import parts and carry out routine aircraft maintenances abroad. Local airlines like Dana Air, Medview and Air Peace also expanded their routes locally and regionally, a development that eased movement and trade and brought smiles to numerous air travellers within and outside the country. The ground handling companies in the country also did very well by investing the requisite infrastructure that grew exports from the aviation sector and created employment for Nigerians.
Way forward
The cost of taking aircraft abroad by airlines always for maintenance has taken a heavy toll on the airlines. They do business in Nigeria and charge passengers in naira. But whenever they have to go for maintenance, it is usually in foreign currencies and we all know the cost of forex these days. It is estimated that Nigerian airlines spent about N35 billion in 2016 to maintain aircraft abroad. Without a functional Maintenance Repair and Overhaul (MRO) facility in Nigeria, the industry cannot develop effectively. An MRO is very necessary in Nigeria because the local airlines cannot survive without them. The country therefore has to do everything within its reach to float an MRO in 2017.
FAAN Managing Director, Mr. Salleh Dunomah, says the key to unlocking the potential in the industry lies in a Public Private Partnership (PPA) scheme. He said such a partnership, if properly coordinated, would inject about $5 billion into the industry. In fact, a PPP is the best concession programme the government should pursue in its quest to develop the airports.
“We have a huge infrastructure deficit for which we require foreign capital and expertise to supplement whatever resources we can marshal at home. In essence, we seek PPP in our quest for enhanced capital and expertise and we therefore invite investors to join the process for airport management,” he added.
Some other stakeholders are demanding that the Federal Government should show transparency, honesty, clarity of objectives and direction in the formulation and implementation of aviation policies if the sector has to be resuscitated,
There are also demands that the government should implement the law that exempts commercial transport operators and domestic airlines from paying Value Added Tax (VAT) as a way of reducing their operational costs.
Above all, If 2017 should be better than 2016, the undue political interference in the operations of aviation agencies, which violates transparency and integrity has to stop, while good corporate governance should be instituted to enable the sector grow.
NIMET partners UK agency to retrieve meteorological data
The Nigerian Meteorological Agency (NIMET) is partnering the Centre for Environmental Data Analysis in the United Kingdom to retrieve more Nigerian historical meteorological data from its archives to boost research and studies on the subject in Nigeria.
Director General/CEO of NIMET, Dr. Anthony Anuforom, stated this recently while delivering a lecture on the 17th Convocation Ceremony of the Enugu State University of Science and Technology (ESUT), Enugu.
NIMET is an agency in Nigeria’s aviation sector, which provides weather forcasts that assist pilots determine their effective navigation of aircraft into airports within and outside the country. NIMET also provides meteorological information to the military and agriculture, housing and environment industries.
Anuforom noted that in every part of Nigeria, there are indigenous methods of coping with weather and climate variability, mentioning the traditional ‘“rain makers” in the South East and other parts of Nigeria as an example of such practices based on indigenous knowledge. He therefore charged the academia to carry out further research into these indigenous practices and methods of climate “adaptation with a view to establishing and documenting any underpinning science, and possibly integrating them into conventional practices.”
He stated that contrary to the widely held belief that weather observation started in Nigeria in 1892 at the then Race Course, now Tafewa Balewa Square, Lagos, new research and records in a meteorological archive of the Centre for Environmental Data Analysis in UK indicate that it may actually have started as early as 1887 at Akassa in present day Bayelsa State.
That early weather observation, according to the findings, was recorded by a British Officer, Frank Russel. “Following these findings, NIMET has initiated steps to collaborate with the Centre for Environmental Data Analysis in UK to retrieve more historical meteorological data from its archives,” he added.
Air Peace takes steps to stem flight disruptions
Air Peace says it has taken extra steps to ensure that it is insulated from the ongoing scarcity of aviation fuel in the country and that its scheduled flight operations are not disrupted.
A statement issued by the Corporate Communications Manager of Air Peace, Mr. Chris Iwarah, said the airline had also expanded its flight operations to Uyo airport in response to the yearnings of Akwa Ibom people and other air travellers.
“We have also made arrangements with aviation fuel vendors to ensure availability of the product to enable us seamlessly take air travellers to our different destinations in the country and we have been able to secure the commitment of different aviation fuel vendors, besides our regular suppliers,” said Iwarah.
“They are ready to make the product available to us because they trust us. We don’t only promptly pay our vendors, we also provide them with funds well in advance to ensure there is no excuse for non-availability of the product. The operating environment may be challenging, but Air Peace irrevocably believes that air travellers deserve on-time, safe, comfortable and affordable flight experience,” he added.
Air Peace launched its maiden flight out of Lagos into Uyo on Sunday, December 18 and out of Uyo into Lagos on Monday, December 19.
The airline said the timing of its maiden flight to the state was to give air travellers on the Uyo route a dependable alternative and cater to the huge traffic to the state during the yuletide.
“On September 9, 2016, we launched our Lagos-Benin-Lagos and Abuja-Benin-Abuja flight operations to give air travellers a reliable option. The launch has not only been a huge success, but has also drastically reduced the difficulties faced by air travellers on the Benin route,” Iwarah said.
However, since the launch of Air Peace Benin operations, our numerous loyal customers and other air travellers have increased their calls on us to take our flight experience to Uyo, Akwa Ibom State.
“We are pleased to announce that we commenced of our flight operations out of Lagos into Uyo on Sunday, December 18 and out of Uyo into Lagos on Monday, December 19. Akwa Ibom is a burgeoning economic and tourist centre in the South-South region of Nigeria. This status has led to a huge leap in the demand for air travel to and out of the state. Unfortunately, that huge demand has so far been met with mostly disappointment,” Iwara added.
