What The Next Administration Should Do For Aviation Sector, By ASRTI President
The President of Aviation Safety Round Table Initiative (ASRTI), Dr. Gabriel Olowo says the priority of the incoming government should be first, to pay all the trapped funds to the foreign airlines to zero if they want that sector to flourish so that all the inventories will come back, to prove that Nigeria respects international trade.
“Also, you cannot be begging the airlines to die. Where do you want me to get fuel to bring down my aircraft down here when all the money is kept in Nigeria? Do you expect them to go and borrow to operate their aircraft into Nigeria? Maintenance is due every six months, where do you want me to get the money from? Do we have maintenance facilities here in the country, which can force the airlines to do their heavy check maintenance in here? What is the capacity of the maintenance? And if I am lifting fuel in Nigeria, what capacity will I lift at a time? So, the government should pay the debts instantly to zero and tell the world that we are ready to shore up investors’ confidence.
Sir Richard Branson of Virgin Atlanta is one of the successful airline operators in the globe. The airline succeeded in the United Kingdom with Virgin UK, Virgin US, Virgin Australia and Virgin Blue. Virgin came here with Virgin Atlantic, but it ran back. Why? It was because of sanctity of contract. Don’t sign what you cannot do. And why Branson was leaving, he issued a bad statement by saying ‘Nigeria is a business destroyer.’ We need to shore up investors’ confidence in Nigeria. This is key and it is a foundation to progress in every sector of the economy.
Number two, let’s deliver a modern gateway. The international terminal at the Lagos airport is overstretched, it has expired and we need to shut it down. Strip it 100 per cent and rebuild.
The plan for that airport is A,B,C,D, E fingers. We have been parading D and E since 1978, which is 45 years now. What happens to A, B, C fingers? Let’s go and build A, B, C and when that is ready, you can move in there and strip the D and E so that they can join later.
Then, we can add aerotropolis to it. Aerotopolis will extend to Ikeja. That is what you have in Turkey and Dubai with light rail that will take you to different gates, which is known as concusses. And in doing this, we are not looking for government money. Private investors will do it. We have to demonstrate consistency. Master plans must go beyond eight years. There must be continuity so that investors will see us as a country that is ready to do business.
Nigeria must honour contracts and this accumulation of foreign airlines’ funds is one of the major breaches that we have as at today in the country” said Olowo.
Assessing the eight-years performance of the outgoing administration led by President Muhammadu Buhari, Olowo said: “I don’t like talking about people, I like talking about institutions. What has aviation lacked in the last eight years? You know people running the sector. I have seen close to 20 aviation ministers in my aviation career. In the last eight years, the agenda set were very clear. What we did at Aviation Round Table (ART), is that we tried to measure their performance with indices of our breakfast meetings. We took topics on each of the six roadmaps, but we focused on about four of them. For instance, we did some things on the national carrier, we recommended options to national carrier.
We focused on airport concession, hub creation and how to finance airport. We focused on maintenance facilities, training and manpower development, corporate governance. We shouted on the appointment of Board members for agencies, which is at the prerogative of the Minister according to the Acts setting up the agencies.
By the time we appraised all the indices, we tried to tick any of our voices that were hearkened to, but regrettably, those voices went down into the drains. All the efforts of eight years, I think we scored the government about 40 per cent performance. We expected government to have done at least 60 per cent and leave the rest to politics. To us at ART, following our indices, we scored the administration below par. We didn’t see the national carrier. We started acquiring non-profitable airports from State governments and some State governments still want to develop their own. And we said no. How about the existing ones that are unprofitable? The Murtala Muhammed Airport (MMA), Lagos that is supposed to be our number one airport has been neglected. The one added by the Chinese, recently, some foreign airlines rejected it. How can we deliver a facility that operators don’t want? So, who is delivering facilities for who? No airline growth, no airport growth because I didn’t see a hub developed.
On Maintenance hangar of Aero Contractors, I don’t know how much savings we have been able to achieve from taking our aeroplanes there. NCAA should be able to tell us for instance that within a certain period, maintenance figure came down to a certain amount of money because of the facilities of Aero.
Foreign airlines non-remittance has reached all figure high of $718m. We are 44 per cent of the entire world’s debts on non-remittance of funds to foreign airlines as at the end of March, 2023. So, Nigeria is almost the half of the world.
What the airlines are now doing is that they started withdrawing their seats from Nigeria. They can sell the seats from Ghana, Lome, US and elsewhere and board here. When they board here, ticket sales charge that NCAA enjoys is not there anymore. That is what we call Point of Sales (PoS). And that runs to millions of dollars yearly. Our travel agents are losing business; they are firing staff. In this month of April, booking figure has collapsed by 50 per cent. Go and check the figure of Wakanow and other travel agencies. The seats are not available to sell.
The aviation industry in Nigeria is facing serious calamity. I don’t know if it is a government policy not to remit airlines’ funds. If it is not a policy, it is a breach of international trade. Bilateral Air Service Agreements (BASAs) that bring these airlines here stipulate that all airlines net earning must be moved to their head offices. Why are we not doing that here? So, we are breaching that aspect of the law. How about investors’ confidence in you in airlines and other industries? Don’t be sure that they will not do same to Air Peace in its operations in China when Air Peace has excess. Same thing may apply to our national carrier when it births.
In the late 1980s or early 1990s, Scandinavian Airlines, Iberia, Swiss Air and other Brazilian Airlines left Nigeria because of this issue of trapped funds. And unfortunately, same thing is happening again. Sanctity of business is very key if you want to grow the country. When they sign business with you, it will be respected as such.
Also, this problem of ‘you must buy in Nigeria,’ national pride is very good, but give a window. Let people elect to buy in dollars or any other currencies of their choice in addition to naira. Some African countries are already doing it. They are already accepting purchase of tickets in dollars. That dollars go to CBN. So, you have more dollars in your pouch because people want to travel. Why must I go to Ghana to buy air ticket with dollar when I can use the dollars here in Nigeria?”