A look at Nigeria’s Aviation In 2019…The Domestic Airline-Carrier Challenge

Factual Pursuit of Truth for Progress

By Chris Paul Otaigbe

As you walked into the large expanse of space in this well decorated center, you are
ushered into your seat with that kind of juju music that gives you a sense of a usual
‘Owambe’ party synonymous with get togethers organized by the Yoruba.

However, this evening’s occasion is not really an Owambe party but a celebration of
Nigeria’s Aviation industry’s performance in the last one year. It was an award
ceremony organized by the industry’s quarterly journal, Air Transport Quarterly. Tagged
Air Transport Industry Awards, the event was attended by largely mid-level players in
the industry flavored with some very major industry operators and regulators led by the
Managing Director of Nigeria Airspace Management Agency (NAMA), Capt. Fola
Akinkuotu.
Predictably, on an evening such as this everyone would have something nice to say,perhaps, justifiably to a large extent.

Comrade Yahaya Gusau is the President, Association of Aviation Professionals. He
said the Nigerian Aviation industry in the last one year has been good but needing some
adjustments and amendments. “Especially, when we are talking about navigational aids,
particularly as Harmattan is coming,” said Yahaya. His association collaborates with
government agencies in the sector to ensure everything that has to be done to make
safer skies work for air operators and travelers in the country. With over three years in
existence, the body has tried its best, working with relevant stakeholders in the industry
to make processes, principles and practices work for the industry and practitioners. He
lamented the deficit in human capacity development in the industry because according
to him, training is key to the safety of operations in the industry.

Sola Tela works for the Federal Airports Authority of Nigeria (FAAN) and he believes the
industry has not fared badly in the last one year, coming from years of airspace
incidents and tragedies in the country.  “We have had it a bit rough in years past. But
now the industry is being flown to the pedestal it properly belongs.” He said.
For Captain Akinkuotu of NAMA, the nation’s aviation industry has consistently been
raising the bar. According to him, there is no doubt that there has been an improvement
this year. “When you look around you, there has been an improvement in all the agencies.

The Nigerian College of Aviation Technology (NCAT) in Zaria is winning awards
globally. Nigerian Meteorological (NIMET) Services is winning awards.  Federal Airports
Authority of Nigeria (FAAN) is doing very well. They have improved infrastructure.
Recently, from what we read in the papers, they have brought in the first in Africa,
Liquid explosive detecting machinery. The Nigeria Civil Aviation Authority (NCAA) is
steadfast in their regulations. Nigeria Airspace Management Agency (NAMA) is making
new inroads and taking steps to ensure we provide new instrumentations by meeting
the mandate for which NAMA was created which is Communications, Navigations and
Surveillance (CNS),” said the NAMA boss.

He further said issues that have been unresolved for many years are being tackled and
coming to fruitful resolutions: “We have just installed an Instrument Landing System

(ILS) category 3 in Lagos and the Abuja one is nearing completion. Over all, I would say
we are making giant steps.”

In July 2019, he had said while phase one and two of the instrumentations for the
upgrade of NAMA’s operations were already completed, the third phase was the one
that was yet to be perfected. “Yes, I did say that at the time. But I would illustrate with
simple things. A year ago, there was I Phone ten and it looked like that was the ultimate.

This year we have I Phone eleven and I Phone eleven pro. So, what I am trying to say
is that we cannot wait and we cannot stop improving. Perfection is not something you
reach. It is what you continue to aim for. In NAMA, we would continue to aim for
perfection.”

Considering the pace at which works are ongoing and the commitment of the various
agencies, including his, to ensuring all that is needed to boost the integrity of structure,
systems and strategies for the industry,  he said he is convinced Nigeria would be the
hub of Africa’s Aviation industry in the next three years.

It was obviously time to merry and jubilate over an industry year that witnessed no
incident of any aircraft falling off the skies. However, that does not diminish the serious
implications of issues whose continuous existence have formed the undercurrent of the
many challenges the sector confronts from the point of view of operations, regulations
and infrastructure.

Supo Atobatele, Publisher of the Air Transport Journal and organizer of the Awards is
more concerned about the Airlines. According to him, some domestic airlines that flew
between 2000 and 2018 have all disappeared from the airspace in 2019. “Only few are
flying and that is why you have pressure on those that are flying now which ultimately
results in hike in air fares due to high demand,” said Atobatele. For instance, Abuja to
Lagos now costs N50,000 as opposed to N18,000.

Besides the fact that some of the defunct domestic Airlines closed down due to one
tragic accident or the other, many of them were said to have closed shop because of
over regulation among others.
Roland Iyayi, a former NAMA MD, in his interview with Thisday Newspaper expressed
his frustration with the Nigerian Civil Aviation Authority (NCAA) over the manner in
which it regulates the airlines, noting that the two key point agenda of NCAA is to
regulate and to create conducive atmosphere for the growth of the industry.

Unfortunately, the agency, he said, concentrates on regulation and has allegedly
regulated some airlines out of existence.
According to Iyayi, NCAA officials see themselves as lords. The mandate given the
NCAA empowers the agency to regulate and initiate growth for the industry. The only
thing they do is regulation and that is why there is no much progress going on in the
sector.

For instance, sometimes, the NCAA would insist on directives that tend to contradict the
instruction of the manufacturer of the aircraft.  He cited the Top Brass Bombardier
aircraft, as a case in point.
The aircraft was acquired when it was about four years and because the aircraft was not
being used for daily flight operations, the manufacturer had recommended for c-check
maintenance after 60 months. Despite the directive by the aircraft manufacturer, the
NCAA insisted that c-check must be conducted on the aircraft after 18 months, but later
conceded that the maintenance should take place after 30 months.

Another example was with Air Peace Embraer 145 aircraft. According to him, the airline
acquired six of them and the manufacturer said that there was no need for c-check on
them but NCAA insisted that the aircraft should be taken out of the country and C-check
conducted on them. This led to an impasse that made the aircraft park for almost a year
while the airline was losing money.

There is also the issue of Operating window in the country which is less than what is
obtained in advanced countries. Nigeria’s is six hours a day as against 12 hours
obtainable elsewhere. This has already cut down profitability by 50 per cent and
operating lifespan of the aircraft by 75 per cent.

In the morning, there are12 flights out of Lagos and at the General Aviation Terminal
(GAT), there is only one screening machine, which ought to facilitate about 1000
passengers for two hours. This causes delay. About 30 minutes delay will initially build
up which soon snowballs into hours of delay with its attendant ripple effect. Passengers
will obviously blame the airlines for the delay but they won’t know that the root cause of
the delay is the delay in passenger facilitation by airport facilities. So, the airline is left in
the line of passengers fire without the agency coming to own up.

These are some of the instances that make industry players insist that Nigeria does not
have policies that support the growth of domestic airlines.
Another important area is the number and quality of routes the Nigerian Airlines have
access to.

There is no policy that supports code-share partnership between foreign airlines that
operate into the country and Nigeria’s domestic airlines. But in other countries in Africa
and elsewhere, such policies exist with domestic airlines given the opportunity to benefit
from the operations of international flights to those countries.
Stakeholders in the sector argue that while every country protects its own indigenous
airlines, providing them incentives and protecting their interests, Nigerian government
give foreign airlines unlimited opportunity to airlift Nigerian passengers without any kind
of partnership with local carriers.

There is also the absence of a policy that would encourage foreign airlines to invest in
the country, help train Nigerian personnel or even give Nigerians, job opportunities in
their international operations.
Clearly, current state of the sector is not helping the operators. The issues of fees and
charges they pay to different agencies are too high.

In Nigeria, sundry charges and levies at airports nationwide, account for at least 65 per
cent of airlines’ earnings. Besides the five per cent charge on every ticket bought by
passengers, which goes to NCAA and other agencies, domestic airlines are also meant
to pay other charges.

They include the five per cent Cargo Sales Charge, five per cent Value Added Tax
(VAT, which government was supposed to have withdrawn), Passenger Service Charge
of N1000 per ticket on local route, Charter Sales Charge, Aircraft Inspection Fees,
Simulator Inspection Fees, Landing Charges, Parking Charges and Terminal
Navigational Charge.

Others are En-route Charge, Fuel Surcharge, Airport Space Rent, Electricity charges,
Apron Pass, ODC (on duty card) registration fee, Service Recovery Charge, Processing
Fee, Avio Bridge, Aircraft Registration and Processing Fee.

The airlines also pay Toll Gate Fee, VIP Lounge, Trolley Service, Clearance Fee,
Check-In Counter Charge, Courier/Tarmac/Pre-Release charges, Import Charge
(domestic), Export Charge (domestic), Import Royalty, Export Royalty, Ports Charge,
Exports Charge, Transshipment and Concession Fee.
All these charges eat deeply into the earnings of the airlines. Chief Executive Officer of
Air Peace, Allen Onyema, recently said if the current regime of taxation were not
reviewed downwards, no airline would survive.

Onyema, said though the charges had been in the system for long and some of them as
fallouts of legislations, it was high time they were reviewed to ease the burden on
commercial airlines.
In many countries of the world, domestic airlines enjoy certain levels of tax holidays,
even when the airlines are fully privately owned. This is to encourage them because
they serve as catalyst to economic development of any nation.
So, in the face of these killing multiple taxes on the domestic airlines, it is the foreign
airlines that benefit.

For instance, as at August 2019, foreign airlines had sold tickets worth about $700
million in Nigeria and they anticipated that by December they would have sold $1 billion
tickets. Over 80 per cent of this sum is repatriated. For Nigeria to benefit from this huge
amount, Nigerian airlines should be empowered by government to provide international
services like their foreign counterparts.

It is not only the fact that foreign airlines dominate international destinations, they also
charge outrageous fares from Nigeria.
It costs more to travel from Lagos to Frankfurt with Lufthansa than it costs from
Frankfurt to Orlando, while Lagos-Frankfurt flight is six hours, Frankfurt Orlando flight is
about 11 hours.

Obviously, to check outrageous fares charged Nigerian travelers by foreign airlines and
also to help domestic airlines operate profitably, there is a need for government to
support its own airlines.
Besides lowering and streamlining the number of taxes paid, these supports could also
include stable aviation fuel supply at relatively lower prices, access to single digit
interest, long-term loans, a review of the multi-designation of foreign airlines to various
airports in the country and standing behind Nigerian carriers when they apply to operate
to other countries.

From all indications, it would appear, as alleged by many industry players that
government is really indifferent to the development of the aviation industry, but more
interested in getting foreign airlines to operate and airlift Nigerians to international
destinations.
This stance is buttressed by the fact that even though government knows that domestic
airlines will not grow if foreign airlines are encouraged to operate unhindered into the
country, government, itself has not taken any tangible step to show support to local
carriers, such as insisting that foreign airlines code-share with them if they want to
operate to more one airports in the country.

While Nigeria needs the foreign airlines, government needs to apply more efforts to
balance the trade by empowering local carriers to compete with the foreign airlines.

Industry experts believe, this is a decision the government can take because it is in its
place and right to insist that international airlines must code-share with domestic airlines
for designation into more airports in the country.
The next step is to build one or more Nigerian airlines to strong enough to compete
favorably with the foreign counterparts and then call the foreign airlines to the table. It is
as simple, for instance, as making the international airline know that while it has enjoyed
the number of routes it has, it is time it began to share with its local counterparts.
It is not difficult to renegotiate Bilateral Air Services Agreements (BASA) to make them
mutually beneficial to both the local and international carriers. It is a matter of political
will because it is a deal government can do that easily.
Granting multiple destinations to foreign carriers is not only an economically unwise
decision, it is a policy that would crash the domestic market. Nation’s commercial
agreements are anchored on the principle of reciprocity. Nigeria cannot be different.
Against this backdrop, one may align with Atobatele, for the building of a national carrier
for Nigeria. “We need the carrier for the creation of jobs, image making for the country,
transfer of technology and improvement of the GDP of the country through its activities.”
He said.
The lack of a national carrier, according to him, is the reason why foreign airlines come
into Nigeria, charge Nigerian passengers exorbitantly, make huge profit and fly away
the proceeds to their country.
The recent suggestion that the two airlines, AERO and ARIK under AMCON
receivership should be merged to form the national carrier may not work. According to
Atobatele, the uncertainty of the eventual ruling of the court makes it impossible for
such an idea to work as the court ruling may swing against the government. “You can’t
be struggling in court with former owners of the airlines in a case where they are still
contesting the veracity of the debt you claim they owe you. Look at it now, Kenya
Airways is owned by government. Namibia Air is owned by the government. Even
Ugandan Air that went underground for some years have refloated and is back in the
sky.  A country of over 200 million citizens cannot boast of a national carrier” Atobatele
lamented.
His passionate conviction about a national carrier for Nigeria is not misplaced as he was
a beneficiary of the Nigeria Airways. “I had international exposure and lots of training
from Nigeria Airways so I can’t forget (that) in a hurry.” He said.
The Ibom Air is a good example of what a flag carrier is and the potential inherent in it.
Within 100 days of operations, the airline has achieved over 50,000 passenger traffic.
While he supports setting up a national carrier, he said government should desist from
making profit-depleting or-deleting charity out of the operations of the airline through
giving free tickets to families, friends and top brass in government or management of
the airline, as was the case in the defunct Nigeria Airways.
“Ethiopian Airline celebrated its 70 years in the air this year. It has been run like a
private business concern by government.” He said.
One of the few times government interfered in the affairs of the airline was when the
(Ethiopian) president sent one of his friends, who was looking for job. He sat for the
interview and failed. That was it. He was not employed and heavens didn’t fall. The
President didn’t interfere. It is doubtful if that can happen in Nigeria.

The history of Nigeria’s moribund flag carrier dates back to the days before
Independence, when Nigeria along with some West African countries had one national
carrier, the West Africa Airways Corporation (WAAC) it started in 1946 and went under
in 1958, when the Nigeria Airways Limited was established.
The deregulation of the airline sub-sector by the federal government in 1988 gave vent
to privately owned commercial airlines, which competed with Nigeria Airways till 2004
when the latter was liquidated.
Since its liquidation, Nigeria has not been able to find her wings in the global airspace.
This has cost and still costing the nation dearly in lost revenues and opportunities.
One such lost opportunity is the failure of the country to be a hub in West Africa
because of its advantageous location, the high passenger traffic, which is the highest in
the sub-region and the skilled manpower available or could be deployed at short notice.

In brief…

Adeniran Ogunsanya College of Education to become University
Lagos State owned Adeniran Ogunsanya College of Education (AOCOED), Ijanikin, is
to be upgraded to a University of Education by the state government.
This was disclosed last week by the state governor, Mr Babajide Sanwo-Olu when the
newly elected Zonal Coordinators of the National Association of Nigerian Students
(NANS), Zone D, led by Comrade Kappo Olawale paid him a courtesy visit at the Lagos
House, Ikeja.
Sanwo-Olu said his administration was committed to the reform of the education sector,
hence the allocation of the ”lion share” of the year 2020 budget to education.
He also seized on the opportunity to inform the NANS representatives about the
ongoing training of all primary school teachers in the state and also the recruitment of
new ones.

LASG empowers 1750 farmers with farming inputs
No fewer than 1750 farmers in Lagos state have been given various farming inputs by
the state government to aid their work in their respective farms.
The empowerment programme which also includes advisory services would be a
continuous exercise, according to Governor Babajide Sanwo-Olu. He explained that the
programme is aimed at increasing food production in the State.
Sanwo-Olu gave the commitment in Lagos at the flag-off of the 2019 Agricultural
Value Chains Empowerment Programme where 1,750 value chains actors were
empowered with various agricultural productive assets and inputs.
The Governor said, “in spite of the global climate change which constitutes a major
challenge to food security, our Government would continue to provide necessary
assistance and advisory services to farmers to increase food production in the State”.
Represented by his Deputy, Dr. Obafemi Hamzat, the Governor explained that the
provision of adequate socio-economic infrastructure, on a sustainable basis, to meet the
needs of the growing population would continue to receive priority attention.

He called for adequate preparation in order to meet the challenges of a growing
population, reinforcing the need for a new and integrated approach to food production
and agro-allied business in order to enhance and sustain food security.

Developing the mining sector a must for Lagos- Sanwo-Olu
The development sector in Lagos is a task that must be done. This statement was made
by Lagos State Governor, Mr. Babajide Sanwo-Olu, while he called on leaders in the
public and private sectors to ensure development of the mining industry.
The Governor revealed that there will be a collaboration between the Federal and State
Governments to ensure a sustainable development in the mining sector.
Sanwo-Olu disclosed this on Thursday at the Lagos House, Marina during a courtesy
visit paid by the Minister of Mines and Steel Development, Architect Olamilekan
Adegbite and the Minister of State for Mines and Steel Development, Dr. Uchechukwu
Ogah.
The Governor said that the collaboration is targeted at ensuring growth and
diversification of the nation’s economy, stating that the outcome will be victory for the
people.
According to him, “as a nation, we need to continue to see how development can
happen in the mining sector, and it has to be an inclusive one.” He said.

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