The President of Sabre Network West Africa and the current President of Aviation Round Table (ART) a think-tank body in the industry, Gbenga Olowo has acknowledged that the fortunes of air transport sector is declining with reduction in fleet and poor service of some domestic routes.
Olowo attributed Nigeria’s airlines problem to government’s lack of policy focus and hostile operating environment, which include high charges indiscriminately leveled on the airlines.
“Airline user charges for example are as high as 15 per cent. User charges are revenue collected for other organisations factored into the fare (without commission ) whereas airlines are not revenue collectors. Hence the International Air Transport Association (IATA) Director-General, Tony Tyler described airlines as cash cows.
“High cost of fuel, high cost of funds, exorbitant airport rent, airspace movement charges at home require government serious attention. On the other hand, poor management decisions and corporate governance by the airlines owners have resulted to high mortality rate in the industry,” Olowo said.
He recalled that in 2010, Nigerian airlines had 54 commercial operating aircraft but by 2013 the fleet had reduced to 39, noting that with declining fleet size, route expansion would be limited and robust schedule very difficult and down time for maintenance would impact negatively on schedule.
On charges, THISDAY learnt that the Federal Airports Authority of Nigeria (FAAN) has charges that include landing and parking, passenger service charge, Common User Terminal Equipment (CUTE) charge, avio-bridge charge, rent and service recovery charge. There are also on duty card charge, toll access payments, airside operator vehicle permit and electricity charge.
These are major charges directly paid by airlines to FAAN, which also gets N2.50 from every litre of Jet A1 uplift at the airports. Industry observers say these charges are too much but FAAN, which relied heavily on aeronautical charges has to diversify and explore non-aeronautical source of revenue, which has become the vogue for airport operators in modern times.
However, Olowo observed that airline mortality rate in Africa especially Nigeria is relatively high usually 10-15 years but often less for so many reasons and attributed it to very difficult operating environment resulting from government policy inconsistency and lack of direction or focus to absolute lack of support “from what the Bible describe as dull hearing.”
“The airlines are faced with so many operational issues without government attention. That is not all. There is no corporate governance in most of the airlines. One-man owner calls all the shots and takes a lot of unwholesome decisions. The airlines are relatively small, weak and vulnerable to competition.”
The ART President said Nigerian airlines cannot cope with the charges, the harsh operational environment and still thrive unless government takes actions to reposition the domestic carriers, which are critical to the economic development of the country.
This unfavourable situation, he noted, has put airlines in huge debts and they have become insolvent.
“Insolvency simply put is when an individual or organisation can no longer meet its financial obligations. Do an x-ray of our airlines today; this is precariously what you find. All the airlines owe huge debts to fuellers, workers, government and trade partners. Government should set up revenue collection agent either individual firms or banks to collect user charges being collected on tickets and eroding airline revenue with several debt burden and conflict with government agencies.”
He said President Muhammadu Buhari should task Transport / Aviation Ministry to deliver at least 1 percent of the GDP by 2020. It is presently 0.4 percent, “a grossly underperforming sector, by implication the sector will be required to grow annually at 25/30 percent and this is achievable. If we apply 5:20 rule to our airlines requesting them to grow fleet by 20 aircrafts every five years, it means three airlines by 2020 will parade a minimum of 60 operational aircrafts each, provide job for 15,000 workers and 30,000 workers with 120 aircrafts by 2025 at the rate of 250 workers per aircraft.”
In the same vein, he noted that airports, airspace and catalytic activities would also grow simultaneously.
“This is the only way to rescue market share from foreign airlines that must repatriate up to 95 per cent of their income back to their home countries in dollars and continue the weakening of the Naira. Truth be told, 5-10 aircraft airlines as we have it today cannot be described as strong schedule players. All the existing seven operators should pool their resources together, operate under one AOC (Air Operator Certificate), harmonise their schedule and stop the stupid ongoing competition among themselves. Then we will be having two near strong players,” Olowo urged.
Curbing Customs’ Excesses
One of the major challenges faced by the aviation sector is failure of the Nigerian society to recognise the sector’s special peculiarities. This often leads to crisis and disagreements between aviation personnel and members of the society, especially security operatives.
For example, while Nigeria has Consumer Protection Council (CPC), aviation has its equivalent, the Consumer Protection Directorate (CPD), an agency approved by the International Civil Aviation Organisation (ICAO) to serve as an umpire between airlines and passengers. So, there is always a conflict when the CPC wades into the affairs of aviation as in the case of Turkish Airlines that failed to fly in luggage along with the passengers and Egypt Air that allegedly maltreated a young Nigerian passenger.
This is because CPC ought to recongise the peculiar situation in aviation, which tends to replicate agencies to specially attend to aviation issues. And this is recognised worldwide.
In the same vein, the aviation sector has Aviation Security (AVSEC) with regulations by ICAO. In many countries AVSEC works with other security agencies but it is only AVSEC that is recognised by ICAO. Also, as a highly regulated industry, it is only AVSEC that has the right to access the airside of the airport. In Nigeria, it is only AVSEC that has the necessary aviation security training in accordance to ICAO Security Annexe that stipulates security regulations at airports.
What this means is that when it comes to airport security, other security agencies should subsume themselves to AVSEC command and control. Aviation security observers said the prohibited areas of the airports are only accessed by AVSEC personnel, but on special arrangement, other security agencies can have access to the airside of the airport. This is where there has been a lot of conflict. There have been reports of disagreements between AVSEC and Customs officers over the refusal of the later by AVSEC to access the airside.
Industry security experts are of the view that this fact has not been driven home to other security operators at the airport, from the Nigerian police, to Customs, Immigration and the Nigeria Air Force; so over the years there has been a growing conflict among the security operatives at the airports and sometimes there are obvious muscle flexing about who should be in charge and why some security operatives are relegated.
This has caused a lot of conflicts in recent times and some of such documented conflicts involved officials of Nigerian Customs Service and staff of the Federal Airports Authority of Nigeria (FAAN). Such conflicts have also manifested between the Nigerian Air Force personnel and FAAN staff and these resulted in exchanges that ended in violence.
Recently, an official of Nigerian Customs Service seconded to the Murtala Muhammed International Airport (MMIA), Lagos sprayed teargas into the eyes of a staff of the Federal Airports Authority of Nigeria (FAAN) following the latter’s refusal to allow him follow exit gate to the cargo terminal.
THISDAY learnt that the Customs staff simply identified as H. Daboh who was in mufti and without On-duty Card (ODC), was aggrieved that the FAAN official attempted to stop him from accessing the Monument Gate that leads to the Cargo and Hajj Terminal through the exit gate, instead of the entrance gate.
Also, last year two Nigerian Customs officers who illegally attempted to get on the tarmac of the Murtala Muhammed International Airport without proper accreditation got angry and attacked a security official attached to the Federal Airports Authority of Nigeria (AVSEC), who wanted to stop them. This resulted in a chaos, as the Customs officials mobilised more of their colleagues to assault FAAN security officials. At least five security officials were severely injured.
Aviation security expert said NCAA and FAAN should carry out induction for any security operative from Immigration, Customs, police, and even the National Drug Law Enforcement Agency (NDLEA) transferred to the airports on the role played by AVSEC and expected roles each organisation should play at the airport and they should be made to understand that as far as airports are concerned, the other security operatives play complementary roles, but the security of the airport is fully the responsibility of AVSEC.
The CEO of Scope Centre, an aviation security company, Adebayo Babatunde said other security operatives like the police and the Nigerian Air Force are allowed to be at the airport and reinforce security because AVSEC officials are not allowed to carry arms, noting that in some countries AVSEC officials carry arms. He added that although ICAO rule does not stipulate that AVSEC officials should carry arms, but every country localises the regulation as it suits local realities. So it behooves on the government to decide if AVSEC officials should be carrying arms so that other security operatives may not be needed at the airport, and even if they are, they should not resort to fracas between AVSEC officials whenever their excesses are questioned.