The recent road show by the Ministry of Aviation could attract the needed investments that would turn the aviation industry around, Ndubuisi Francis writes
The bitter memories of the June 3, 2012 Dana Airline’s McDonnel Douglas (MD-82) air crash, which claimed the lives of everyone on board, and other casualties on the ground in a Lagos suburb, Iju, Agege, are still fresh.
The commentaries that trailed the crash in both electronic and print media rubbished all the high ratings on our Civil Aviation Authority by the International Civil Aviation Organisation (ICAO) , the International Air Transport Association (IATA), an umbrella body of global airline operators and of course the highly rated United States’ Federal Aviation Administration (FAA).
In recent years, these international agencies carried out painstaking audit assessments on the oversight capabilities of the Nigerian Civil Aviation Authority (NCAA) and gave it a clean bill. However, the disaster provided a linchpin for self- professed Nigerian experts, for reasons that defy every rational conjecture, to pummel and write off the regulatory agency.
Caution against Public Hearing
As expected, the National Assembly, specifically, the Senate, latched on to the overwhelming barrage of negative public opinions and went ahead to organise a public hearing on the crash, ignoring the appeal from the Aviation Minister, Princess Stella Odua, that such was premature since the actual cause of the accident was yet to be determined. Her appeals could not assuage the parliamentarians as they went ahead with the scheduled public hearing.
The Airline Operators of Nigeria, (AON) also warned against the planned public hearing, describing it as setting the cart before the horse even as the body stressed that it would not shield any of its members that compromised safety in any form. It further urged the National Assembly to observe the global standard which was to first of all wait for the result of the accident investigation before any public inquiry. Ironically, Oduah, on the orders of President Goodluck Jonathan set up an administrative panel of inquiry to carry out technical and administrative audit on all the airlines and the entire industry and recommend appropriately on how to avert a reoccurrence of such devastating crash in future.
That had also elicited criticisms from within and outside the country as it was equally described as premature. So the minister’s appeal to the National Assembly to suspend its proposed public hearing on the crash must have been informed by the need to minimise the damage and reputation of the industry before the international community but all that did not yield any result.
A Can of Worms
As expected, the public hearing opened up yet another floodgate for more attacks on the sector by those who were bent on causing more injuries to the country’s aero economy. They were the same individuals who had severally criticised the on-going transformation across airports in the country as a misplaced priority. Some even went ahead to petition the National Assembly, alleging that the Ministry of Aviation did not get approval for the remodeling projects meant to provide the right facilities that will not only improve passenger comfort but also enhance safety of air travels in Nigeria, when completed. Part of the allegation was also that the minister had squandered the sum of $70 million, being the royalty accruals from the Bilateral Air Services Agreement (BASA).
The minister was however, to put a lie to this recently while receiving the leadership of the National Association of Aircraft Pilots and Engineers (NAAPE) on courtesy visit to her office. Odua had told the NAAPE leadership that the BASA money was intact at the Central Bank of Nigeria (CBN) where it is domiciled, stressing that there was no way anybody could withdraw any dime from the account without authorisation from the Presidency and the National Assembly, adding that even the Central Bank would not permit such withdrawals without due process followed.
The minister had also been accused of planning to sell the Nigerian College of Aviation Technology (NCAT), Zaria and she equally clear the air before her visitors, saying that the ministry and indeed the Federal Government had no such plans. She stressed that government was all interested in reviving the institution to serve as a regional training centre for aviation and to equally make sure that it is run professionally and profitably too. The minister further added that the government would as well encourage NCAT to partner and collaborate with other training institutions abroad to enhance its programmes.
Before the end of the public hearing, the ripple effect on the industry had started manifesting. The insurance premium paid on haul by our local operators went up astronomically and lease fees also went up by over 100 per cent as many aircraft leasing organisations began to shun the Nigerian market due to perceived unhealthy climate. Funding from international agencies equally became threatened and off course the resultant impact was over 60 per cent drop in local and regional capacity. The development also led to over 25 per cent increase in fares. An hour flight which hitherto cost between N22,000 and N28,000 now oscillates between N30,000 and N32,000 on economy class.
Airlines like First Nation, Chanchangi, and Air Nigeria went on voluntary grounding while Aero and IRS maintained just skeletal services.
However, industrial analysts believe that the ministry of aviation has been spurred by the negative impact of the Dana crash to do more positive things. The idea of the a three-nation investment drive by the Ministry of Aviation, according to some operators, is one of such positive moves.
As a minister –desirous to make a mark in her time- Odua had no choice but to assemble her chief executives to the drawing table to fashion a way out of the unpalatable state of the industry and the idea of an investment road show was mooted. The whole idea was to rebrand the industry in order to attract both local and foreign investors. The local leg of the road show was first held in June, in Abuja. The investment basket tagged ‘Aerotropolis’ is designed to attract investments into the airline industry, airport infrastructure, aircraft maintenance and other ancillary sectors like hotels and catering, among others.
After the Abuja meeting, the next agenda was taken to the international market and that informed the visit of the minister and her heads of parastatals to three nations—China, Canada and the United States of America. Although the trips have been widely criticised, the initiative may just turn out to be the needed tonic to transform the ailing aviation industry in a very short while.
Positive Response from Foreign Investors
Two global giants in aircraft manufacturing, The Boeing Corporation, which products account for over 80 per cent of the available passenger fleet in the country and Bombardier have all signified their interest in helping to overhaul the existing domestic fleet through a workable fleet renewal plan that would also seek to set up solid aircraft repair and maintenance organisations (AMOs) in the country.
Boeing which is an American based manufacturer of long range jumbo airplanes indicated eight key areas it would participate in the ministry’s novel project, ‘Aerotopolis’ such as maintenance centre, fleet renewal for local airline operators, and training.
The corporation’s Director of Sales, Lawrence Pollivier, who led the Boeing team also added that his organisation would also help to carry out technical assessment of all Boeing air planes operating in the country and equally assist in developing aviation data base for the country .
Pollivier, who described Nigeria as an important market for Boeing in Africa also declared that the American firm would be willing to propose a business partnership for the establishment of an integrated spare parts super market in the country under the ‘Aerotropolis’ project.
As for Bombardier, a medium range Canada-based aircraft builder, it will embark on aircraft maintenance and repair organisation (AMO) and aircraft acquisition programme that would help Nigerian airlines acquire brand new bombardier range of aeroplanes.
The Vice President, Corporate Affairs, Helene Gagonon, who gave this indication during the discussions with the Nigerian delegation stressed that the company was ready to come in and invest in the country as soon as all the necessary arrangements were put in place for the take off the project.
The minister and her team had equally had fruitful discussions with top American functionaries in the air transport sector during which high policy issues were x-rayed. The US team was led by the Assistant Secretary for International Affairs, Juile Ottenberg while the Permanent Secretary, Ms. Anne ENE-Ita led the Nigerian team.
Both teams agreed to strengthen the existing cooperation between the two countries in the area of capacity building in the aviation sector in addition to encouraging close cooperation among the carriers of both countries.
The Nigeria delegation equally met with the top management of one of the leading international banks in the US-Citibank. At the bank, the Nigerian delegation was able to secure the commitment of the bank in helping to provide funding for the companies that would be ready to participate in the Aerotopolis, in addition to providing financial advice for the project.
The bank’s head of global investments, Mr. Ray Mc Guire, said the bank would be involved at various phases of the aerotopolis project, stressing that ,”aerotropolis offers huge opportunities for major infrastructural development second to none in the sub-continent around the airport community”.
The Nigerian team while in China also had fruitful discussions with investors. Prominent among many organisations that are willing to come and invest in the project are the China State Construction Engineering Corporation (CSCEC) and Huawei Technologies .
The CSCEC ‘s Vice President, Yu Zhende, had noted that Nigeria, as a big country in Africa, needed to develop its aviation such that it would readily position it as a major hub in the continent. He stressed the readiness of his country to partner Nigeria in the aerotopolis project , adding that as soon as all necessary agreements that would guarantee the investments were formalised, his company would move in even.
According to him, funding would pose no inhibition to CSCEC’s involvement.
On its part, Huawei had presented a proposal for information technology (IT) infrastructure for airport terminals across the country. It was a joint proposal with its partners, SITA, a leader in IT solutions provider in the industry. Generally, the investment show was a huge success , and the results, according to industry watchers, would soon manifest.