Bankole: Nigerian Insurers Lack Capacity to Bear Airline Risk

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Managing Director of Medview Airline, Alhaji Muneer Bankole spoke on air safety in Nigeria and the challenges airlines face including high insurance premiums. Chinedu Eze brings the excerpts:

Obtaining IATA Operational Safety Audit (IOSA)

I had a visit to Abu Dhabi to meet with Etihad. The management of Etihad, my management and myself had one-to-one discussion and the airline said it wanted to do interline with Medview because they needed to have a Nigerian airline partner and Medview happened to be the favourite airline but the first question on the table was, are you IOSA compliant.

I said with confidence that we were in the process and today we have the IOSA. Like (Samson) Fatokun (IATA Regional Director) said, it was not a child’s play. It took us almost about two years to run the project. It was not only two years. We had external auditors that checked our books, our manuals, safety operation, engineering and other things. They run through quality, safety standard and everything. The team that came said in very rare cases they could do 40 to 50 findings; even sometimes more than 100. Those airlines don’t usually come back because for you to have 20 findings in this project, you would rather go back to school again to read.

I wan tot use this medium to thank my entire workforce that worked tirelessly for the actualisation of this project. I cannot tell you in secret, I was part of the team. I was here with the books. I read all the books.

What goes for Medview in secret is teamwork and I always emphasise that the right thing should be done and sometimes I go crazy to ensure that this is done. And I am proud to say openly here that among the airlines that operate in this country, we are in compliant with safety and standard regulation.

Challenges in the Industry

That is why it is necessary to tell people that in the industry today we have seen a lot of challenges, so this government that we have today must change its attitude to support the aviation industry, because it is only window through which the country can link with the external world. And it is the only window through which you can carry the name of the country through the airlines. This is because most of the corporate entities cannot fly your name outside Nigeria, as airlines would do.

In Saudi Arabia we did well in a very efficient Hajj operation. It was almost about 60 days in and out we never had delays and we had in our hands the responsibility to airlift 70, 000 Nigerians that went for the exercise and we ensured that they returned safely along with their luggage and cargo. And I returned home safely with my team. That is what Medview is all about.

We never changed that standard. We wanted to give the best and we want to promise IATA that what we received today we are going to maintain it; we are going to improve on it and I want to assure that we shall meet all the conditions to sustain this safety status. Thank you for the efforts that IATA put into this exercise and I wish to say it openly that this is a wonderful exercise, which has been introduced to the airline industry to measure the standard and safety, which gives customers the confidence to fly. This is the secret. Any corporate entity that wants to do business with you, even airlines will ask you, are you IOSA satisfied. They will understand that you have gone through the rigours of achieving high safety standards to join those that have met such standard in the world. With this certification we are competing with Lufthansa and other mega airlines. That is what IOSA is all about. Today you will be a member of IOSA and you can vote and be voted for.

Government’s support for airlines

Let me bring you to the current situation in the country. The Senate Committee on Aviation has invited some of the Nigerian airlines. Looking at the operating environment, the members want to know where and where the shoe pinches. The airlines attended the Senate seating and today again we received a letter from the Senate through the House of Representatives that there would be public hearing. The entire situation in entire country is not pleasant.

Airline is the backbone of aviation anywhere in the world. Air transport in Nigeria is dollar denominated and the non-availability of foreign exchange is not helping the situation. You are all aware of what is going on. We have cried out to the government to create an environment and window in Central Bank of Nigeria for airlines to have access to forex so that the airlines would have dollars to do their business. Everything we do in this industry has nothing to do with Naira. We carry out maintenance at the Maintenance, Repair and Overhaul (MRO) organisation overseas. In most cases we do D-check for a minimum of $2 million. In D-check we change a lot of components on the aircraft and bring the aircraft back home for the next 18 months.

You are also aware that some of the aircraft are on dry lease (leased aircraft operated by the airlines crew and maintained by the airline). The airlines need to pay lease rentals. It has to be fulfilled because it is a contract obligation. Such payments are done in dollars. We pay insurance in dollars; it is not paid in local currency because the Nigerian insurance companies do not have the capacity to carry the risk alone. That is why most of us go back to the foreign insurance brokers and underwriters.

High charges by government agencies

We have spoken to government on Jet A1 (aviation fuel). At the beginning of this administration we thought they were going to dedicate one of the refineries to produce Jet A1so that the product would no more be imported and that would reduce the pressure on dollars. Currently fuel supply is at the mercy of marketers. They are now selling N204 per litre. This product in January last year was N101 per litre; some was N98 per litre, but to day it is N204 per litre. Up to Maiduguri and Yola the price of Jet A1 can go as far as N240 per litre. The fuel marketers say they are looking for the same dollar to get the product for us. I wish those of us remaining in the industry that we continue to pray to God Almighty.

I wish to also say that the Minister of State, Aviation, Senator Hadi Sirika has been moving around with us. We went together to the Nigeria Customs Service and we succeeded in getting his support on the waiver on tariffs on the importation of aircraft and spares. We need to commend the federal government on this. So we want government to continue to support the industry. We have spoken about the charges on airlines by government agencies and we are of the view that these charges should be put together as one charge and let the Nigerian Civil Aviation Authority (NCAA) share it, because the rest are just service providers. In terms of these charges we are in very difficult situation. We pay the Federal Inland Revenue Service (FIRS), we pay the Lagos Inland Revenue, we pay everything. There is no money really. The cost of the ticket we sell cannot defray all these payments.

Fleet size

We have carried you along from the beginning when we started with few aircraft. Today I am proud to tell you that we are operating six airplanes and I am modest to tell you that currently Medview runs domestic operations on daily basis. We have Boeing 747 for our Lagos-London service and we have Boeing 777 on lease, which we used to support our hajj operation. As I am talking now the Boeing B737-800 is on the way and I will let you know immediately it is delivered. So as at now we have six fleet, five on ground in Nigeria and the sixth one in Europe. This is the fleet as at today. In terms of fleet expansion I will have to tell you that we have come to stay on our Lagos-London route. We have wonderful operation in 365 days and we never cancelled one flight. We have to commend Nigerians in Diaspora for sincerely believing in this organisation and we are very happy about it and they do the needful to show that this is our own.

Till the end of December, starting from the first week of December and with the Boeing B747 commencing in the next two weeks, we don’t have seats available if you are coming in from London. That is to show the commitment of Nigerians, and going back to London from first week of January to the end it is almost the same. So I encourage Nigerians to start buying their seats. We want to tell Nigerians in Diaspora that we value their support and we are ready to give them special fare so that they will be able to carry their family and bring the money back home to improve our economy. That is what Medview is all about. So we are helping them to come home with a very reasonable price.

On the fleet, we are in Jeddah. You are all aware we opened Jeddah. We run four frequencies to Jeddah and we operate to London and I am proud to tell you that in couple of months to come, once the Boeing B767 goes for maintenance we will take back to Dubai and all of us will be there to share the experience. For now Dubai is in the making and you are all aware that in West Africa we operate to Accra, Ghana. We got approval into four countries in West Africa. We are extending Accra to Liberia, Freetown and Dakar. Recently during the Hajj we had invitation from the government of Mali and also the Prime Minister of Guinea Bissau. He was pleased to see Medview supporting operation in their country.

Ethiopia Airlines has been giving support to this organisation in terms of maintenance and we are working with our local engineers. So we have partnership with Ethiopian Airlines and we are moving very well with them. We are also working very closely with Euro Atlantic to commence Lagos-Lisbon and Sao Tome together.