Towards a new national carrier, airport concession for efficiency

The Federal Government’s road map to revive the air travel sector got off to a sluggish start, but in a manner that leaves none of the stakeholders in doubt of its delivery before the end of this administration. WOLE OYEBADE reports.
President Muhammadu Buhari last Tuesday reeled off achievements of his administration in a Democracy Day address to Nigerians. The occasion marked the third anniversary of his four-year administration with feats that were recorded on the way.In the area of aviation, the president cited Nigeria’s retention of United States Category-one Status and the Maintenance Repair and Overhaul (MRO) facility, on the stable of Aero Contractors, as part of the scorecard.

Contentious as the achievements are, observers were unanimous that the “achievements” fall below the aviation-specific promises made prior to the 2015 election campaign.Specifically, the president had pledged to revive the national carrier, as a former Head of State that had seen the defunct Nigerian Airways in its heydays in the 80s.

The Minister of State for Aviation, Hadi Sirika, had in 2016 launched the aviation road map, to reiterate the Federal Government’s commitment to turnaround one of the most critical non-oil sector of the economy. On the agenda were plans to set up a new national carrier, concession the airports for efficiency, set up Maintenance Repair and Overhaul (MRO) facility and aircraft leasing company to avail capacity.

It was quite an ambitious plan by the assessment of all, but two years down the line, what has happened to the road map? The Buhari-led administration is not known for haste. Hence, many were not surprised that components of the road map are yet to mature just a year to go. However, major stakeholders in the aviation community are, at least for once, unperturbed at the lack of momentum. They have remained unusually optimistic that the promises will soon be fulfilled.

They pinpointed the level of transparency demonstrated in the ground-work and far-reaching consultations already made in the last one year, coupled with the new wave of confidence the local aviation industry has lately attracted.

Perception is everything
Spearheading the campaign is Sirika – a captain and technocrat that knows the sector and how to get along with the stakeholders. After much persuasion at several fora in Lagos and Abuja, the minister earned the support of majority, including the workers’ unions.

Speaking at the recent stakeholders’ forum in Abuja, Sirika said that government intends to build a national carrier that would stand the test of time. According to him, “We don’t want what happened to Air Nigeria to repeat itself because someone who just woke up from the left side of the bed decided to liquidate Nigerian Airways, and set up Air Nigeria which didn’t last. We want to build an airline that can challenge Ethiopian Airlines.

“We don’t want to rush into establishing a national carrier, because if we fail, it would be disastrous and nobody will believe us again. So, we need to tread cautiously. We will fast-track, and be quick so that we can produce something that would stand the test of time,” he said.President of the National Association Of Nigerian Travel Agencies (NANTA), the downstream sector and the pressure group of the industry, Bernard Bankole, said it was not difficult for the stakeholders to believe him, given that “certain things had changed in the aviation industry to boost confidence in the leadership and its ability to deliver on promises.”

He noted that quite significant was the manner of handling and on-time delivery of the Nnamdi Azikiwe International Airport’s runway rehabilitation. The administration was also able to clear the backlog of foreign airlines’ stuck funds in excess of $600 million.

Bankole added: “Our airspace has also become a lot safer. We have not had any air disaster in the last three years. Airlines that have issues with safety records were intervened in by the government. This has improved the status and confidence of the industry.

“There is a lot still to be done. We are now seeing a lot of projects come to completion. The new terminals in Abuja and Lagos are examples. The International terminal car park in Lagos is already in use. All of these have added value to the aviation industry in one way or the other. During this administration we have seen International Civil Aviation Organisation (ICAO) and Airport Committee International (ACI) Africa, hosted their delegates in Nigeria as an expression of business confidence.”

The task could not have been easy given the erstwhile economic recession at the beginning of the current administration.“None of the critical infrastructure has been delivered but they are still in the pipeline. The national carrier, for instance, cannot be established without first clearing the backlog of all the ex-staff of the defunct Nigeria Airways. This is an important issue and you know how long they have been on it.

“Again, what is important in the new national carrier is to ensure that it is private sector driven in such a way that the level of ownership of government will be extremely minimal, while the private sector and technocrats are put at the forefront to drive the national carrier. This has a lot of implication for the country as one that understands the business of aviation.

“For me, four years is too short to get some high-capital intensive projects done. Nigeria is not a country that sets money aside for projects but often starts the project and begins to look for funds to complete it. More so, these are projects that are not cheap. I will say the government is even over ambitious taking on the four projects at once. I would have advised that we take it one step at a time. It is better to address one or two than four that we cannot complete because the resources are very limited,” Bankole said.Aviation Consultant and Chief Executive Officer of Belujane Konsult, Chris Aligbe, also cut the government some slack, given the level of progress already made in setting up a national carrier, MRO and aircraft leasing company, despite starting late.

Aligbe noted that the road map is a holistic strategy to transform the aviation sector. For instance, aircraft acquisition is a major challenge that the road map already has a solution in a leasing company coming to Nigeria.“I understand that the African Development Bank (AfDB) and African Export-Import Bank (Afreximbank) have committed to the funding of the aircraft leasing company and MRO facility. Their target is not just Nigeria, but the development of the West and Central African market, where there is no major airline yet. More so, there is the Single African Air Transport Market (SAATM) plan to implement.”

Given this potential, Aligbe said, “It is better late than never”. He added that approach adopted by the Minister and his team is also unusual to the Nigerian system.“We have had such promises from previous administration of Jonathan and even Obasanjo. Now they (current administration) have followed the path of transparency in their process. They started by telling us about it; they did not put it under the table. They appointed Transaction Advisers that have pedigree and shown them to the stakeholders to see. By the time their report is ready in June or July, it will still go back to the stakeholders to decide.

“However, all of these do not mean success. There is usually a T-junction where people get to and take a wrong route. I’m waiting for them to get there and see the direction they will take – either the right or the wrong one.“Even Obasanjo took the wrong route in liquidating the national carrier. The act that established Nigerian Airways has still not been repealed. Now this administration is doing all the right things. Never has such plan been taken to the Federal Executive Council (FEC) for approval. Look at the recent committee set up to fast track the new carrier, they are all professionals and way ahead of those we had in the past. So, we really have to give it to them,” Aligbe said.

Airlines operators also have great optimism to share, having been assured that the new carrier will not muscle them out of business.It will be recalled that the liquidation of Nigeria Airways paved the way for commercial operators to fully come into the fold. News of a new national carrier, with all the privileges of a government-owned business, unsettled the minds of several operators at the initial stage.

Managing Director/Chief Executive Officer of Afrijet Airlines, Mohammad Tukur, said the quietude was not unconnected with the assurance that the new carrier will operate within the confines of a flag carrier.”They have made it clear to us that they are not reviving the Nigerian Airways that will not be paying landing and packing charges among others, but a flag carrier with adequate capacity. So, operators have nothing to loose.”Aviation today is so huge that one person cannot do it alone. Nigeria needs a very strong carrier. If we are able to succeed with this, it will create a lot of new jobs and better the economy,” Tukur said.

Secretary General of the Aviation Safety Round-table Initiative, Group Capt. John Ojikutu (rtd), added that the meticulous nature of the programme was quite pleasing and designed in a way that it takes the responsibility of infrastructure maintenance off the government, while it faces the safety and security issues head on.

Ojikutu said: “It is clear that this government does not want to go the way of other people. Hence, the plan to concession the airports. National carrier is also to safeguard the market from other foreign carriers and some of us are in agreement with them. “Like I have said, let government not put it’s hand in it. Let them get technical partners from outside to invest a minimum of 40 per cent. That is why they are talking to Boeing and will soon talk to Airbus to come and invest, while Nigerians will take the remaining 60 per cent.

“If the aircraft manufacturers bring aircraft today and government goes to stock exchange, Nigerians will come out to invest in the 50 per cent. The remaining 10 per cent can then be between the Federal Government and the states. That is when we will have a national carrier.”