Onyema: Operational Challenges May Force Many Airlines out of Business

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Chairman of Air Peace, Chief Allen Onyema has urged the government and its agencies to create the enabling environment for domestic airline operations, pointing out that the enormous challenges may prompt many of them to close shop. Chinedu Eze brings the excerpts:

How did fuel scarcity and the Harmattan haze affect your flight operations during the Christmas holiday and what do you suggest should be the solution to these intractable problems?

Well, last year has come and gone, the truth is that I don’t want to overemphasise the challenges airlines are going through in this country. Everybody has been talking about them over the years. I have added my voice since I came on stream but nothing seems to be happening. However, one can’t fold one’s hands and watch things deteriorate. The problem is not with the present government; these problems have always been there. The Minister of State, Aviation, Senator Hadi Sirika is doing his best.

There are so many unfavoruable policies that need to be upturned to remove the present hindrances in airline operation in Nigeria, but some of these policies are backed by law and he alone cannot change them. So he has to go back to the lawmakers to undo what they did before, that is the only way he can get around them. So, some of these challenges are there but we need everybody, we need concerted efforts of both the executive arm of government and the legislative arm of government to do something about them.

The Minister has been trying to listen to everyone and trying to carry the airline operators and the other stakeholders along in his decisions. So the challenges are there and if these challenges are not addressed, and quickly too, so many airlines will go out of operations, so many of us of may go down, I don’t mean accident but I mean closing business. And when they close business they close the employment of so many Nigerians who are dependent on these airlines for their livelihood.

So, everybody should be bordered about the level of unemployment situation in this country. Airline business provides massive employment opportunities for people, so the government should look at it that way. We contribute so much to the GDP of the country, we contribute so much to the wellbeing of the country and we make the movement of goods and services very, very seamless. So it is a very critical sector that one has to take serious look at to make sure things are done the proper way.

Then coming to your question about last year fuel scarcity, it is only in this country that prices of fuel have gone up astronomically. The prices of crude oil all over the world have gone down but in Nigeria I keep on saying the cost of acquiring the product has quadrupled, that is, times four. What happened in December, if it continues happening most airlines will go down, they would be out of business. A situation where you buy aviation fuel at N210 this morning in the afternoon the vendors will tell you it is N265; in between your flights. What will you do? A lot of Nigerians say Nigerian airlines waste time, they delay, they cancel flights, that if you go to Atlanta or London, it is not like this.

These people are showing their ignorance because they don’t know what we are going through. I have said it times without number that the biggest airlines of this world: Delta Air Lines, British Airways, Ethiopian Airlines, KLM, Air France, Lufthansa and the rest, bring them to Nigerian to operate within this country the way we are operating, they will not last more than 72 hours. I have said these two years ago but nobody took me seriously. When the issue of dollar scarcity started they started running away, just dollar problem alone.

The dollar problem alone was just maybe 10 percent of our problems, yet they ran away. So if you bring them into this country to operate they will run away. They will close shop within 72 hours. So the challenges are very enormous. All over the world they will tell you that aviation fuel takes about 40 percent of your operational cost but in Nigeria it takes about 85 percent. So what is left for you? Whatever is left for you is taken by government as taxes. So what is left for the operator? Nothing.

Is there no way to overcome the tax challenge?

When you complain about this the aviation agencies will tell the money you are collecting is not for you it is for the government. The moment the government is putting so much money on your ticket you become a tax collector for the government, it is been passed on to the passenger. It is also affecting our tax load. In order for us to break even we will now have to put so much money on the ticket and these passengers will not be able to pay. This is because we want to take care of the one going to taxation. It is the same passenger that will pay it, so it becomes too expensive and they won’t buy the ticket. I advise the government to look at the issue of double taxation. All over the world airlines are not taxed this way. The annoying thing is that the agencies don’t even provide the services for which they are being paid. Can you say the airports are okay? Why did the Harmattan haze affect us so badly the way it did?

We lost several billions of Naira last December. No airline in this country broke even during December. There were crowds of passengers but nobody flew because of Harmattan haze. When we operated to Uyo during that time we paid N800, 000 for extension of time because the weather was not good and I had to be delayed. In Enugu every day I had to be paying over N500, 000 to fly into Enugu for our last flights. Is the airline supposed to pay that after you have paid 5 percent charge to the Nigerian Civil Aviation Authority (NCAA)? That 5 percent charge is supposed to be for all government agencies; yet, we pay other fees to the Nigerian Airspace Management Agency (NAMA), you are paying charges to the Federal Airports Authority of Nigeria (FAAN). They deduct us at source. And after making these payments you go into the airport there is no runway light, you are now limited to fly only between the hours 8:00 am in the morning to 6:00 pm.

Some of these airport workers don’t even come to work on time. Our departure from Lagos to Enugu or any other destination is 7:10 am, you need the destination airport to be awake to give you weather conditions there. You noticed that as at 7:10 take off, the workers at the destination airport have not come to work. Some airports don’t open on time until 7:30 am. You will be waiting for their workers to arrive to give you weather report. So what kind of country is this? Some of those airports do not go to work on time and by 6: 00 pm they close.

Enugu, for example, has runway light but they close on time so why can’t they operate 24 hours like an international airport? Why can’t that place be opened 24 hours? Why do you make me to pay extra for landing there after 6: 00 pm? everyday, during the Christmas period I was paying about N500, 000. How many passengers was Air Peace carrying? Just to provide service to the people we are being taxed heavily. So you pay for the services for you to be served, you are not even served; even when they now have to provide any service you have to now pay again.
And when you talk some will now try to witch-hunt you.

We lost a lot last December. Those airports were supposed to have good landing equipment. Over there in Europe, my aircraft was going to Estonia it was zero weather visibility but the pilot landed. This was because the facilities were there at the airport and in the aircraft. All they needed to do was to put it on auto and the aircraft would get itself down quietly. They have corresponding facilities at the airport that will aid the aircraft to land. But here if the weather changes a little bit you do air return. Do you know the number of air returns airlines did in December? Burning fuel to take off and later come back without reaching your destination. How about salaries, maintenance? One spindle in Boeing 737 costs about $217,000. So what are we going to do? Yet, you don’t see the dollars to buy. Today we are buying at N505 to a dollar.

So the airlines must be supported, the federal government should even declare emergency in the sector by removing every form of tax to make the industry survive or make the charges minimal. You can say, for every passenger that flies, N1000 to FAAN, N2000 to NCAA. These flat rates are better than the percentage they are talking about. It is better for computation and the rest. They should change the taxation; all the Nigerian airlines are losing their pilots to even neighbouring African countries. This is because the Nigerian airlines are wobbling not because they want to be wobbling but because there is no support.

For instance, we are not asking anybody to give us money, I am not asking for money but the enabling environment must be created for these airlines to thrive. I can manage what I have gotten, but give me the enabling environment to operate. If I want to land in Calabar by 10 pm let the airport be open for me to land. And this can even energize business environment in the country, when people know they can travel at any time. This is how to make the economy buoyant. The economy can be energised by making these airports vibrant.

I support whatever work they are going to do at the Kaduna airport to make it good. When you put facilities there it will enable us to fly easily. So, no matter where any airport is located make all of them vibrant, let them have top-notch facilities. Have you ever imagined you are going to Abuja and weather goes below minima and the weather in Lagos is below minima and Port Harcourt is below minimal where will you go to? So you need every airport in the country to be well equipped. Some people are saying they want to develop the Kaduna airport because it is in the north. That is rubbish to me, it is Nigeria, let them develop it. The day any crisis will happen and you want to land in that your southern airport, you can head towards the north, that northern airport might be your saviour. So let us develop everywhere. Let’s make all our airports flyable, top notch, I support that.

In December Airline Operators of Nigeria (AON) demanded that government provide Category 3 landing aids so that airline could land at low visibility at our airports. This is coupled with the debate over the closure of the Abuja airport and the building of second runway. What is your view?

The second runway in Abuja is long overdue. Abuja should have a second runway. It is a shame that the airport at the nation’s capital, as busy as it, does not have a second runway. And those people in the legislature annulled it because of the supposed outrageous amount quoted for it before. That annulment is not supposed to be a sealing. I don’t think they put a seal on the importance of having a second runway. So all they should have done was to review it. You can call other airports all over the world and find out how much they used in establishing theirs; anybody can get that kind of information. They should review it and bring it downwards and do it. We need a second runway in Abuja.

About the closure, yes the airlines will lose a lot of revenues. There is no doubt about that but we have to look at the safety aspect too. The Abuja runway, honestly I had once complained to the Minister myself, that because of Abuja airport and Enugu airport I have been changing my nose wheel almost every week. There are potholes all over the place and that is a recipe for accident, it is an accident waiting to happen. But I don’t know if total closure will be the answer or partial closure, I am not an engineer. And because we are relocating to Kaduna it comes with its certain cost too. And some people might have this apathy towards travelling that period but we cannot place pecuniary reasons over safety.

Well, people will talk but I stand for safety. If the closure will afford us safety in the long run so let it be. If it could be done with partial closure and achieve the same result let the government look at it. So it is something that people should not go into argument about because I have been reading a lot about issue and people were making it political, some are making it ethnic.

How are you looking at 2017 in your operations?

Well, these challenges we have been enumerating every other time, the government should do something about them. Owning an airline is not for money making really, it doesn’t give you money. All over the world, it even brings you down. So what I think government should place premium on is, if this government can build one maintenance hangar that can take on Boeing B777, B737s, up to D-check, that will be a money spinner for this country. I support such project more than I support national carrier. National carrier will only deplete our resources. But the maintenance hangar will bring foreign exchange into this country. So many countries will come here to maintain their planes.

I have three of my aircraft outside. I took about eight of my planes outside within the last one year because we don’t joke with maintenance. They were coming back in trickles, why? Because all the MROs all over the world during winter in the Western world are fully booked. They push in their planes because they fly less during winter. So they push in all their aircraft into these maintenance hangars for checks. So you don’t have spaces, your plane will be lying there, manpower issues will set in. Even in Ethiopia maintenance facility, you write and they say we don’t have any slot for you until six months’ time.

I have never maintained any of our aircraft with less than $3.7 million. When some people say you could use $700, 000 to do C-check I disagree; it depends on what scope you submitted to the MRO (Maintenance Repair and Overhaul). But the kind of work scope we develop in Air Peace is total. One of our aircraft is down there at the airport because we don’t play with safety, the aircraft came back from C-check from Lufthansa maintenance facility and we discovered a snag and we grounded the aircraft.

I see 2017 is going to be good for us; this year by the special grace of God we will start our international operations this year. And we are launching into the West Coast massively this year and we need the support of government to give us all these routes into other countries so easily the same way the foreign countries are coming into ours. Let us go and bring foreign exchange for our country and we need the support of government to do that.

The problem we have noticed is the multiple entry points given by the Nigerian government to foreign airlines. No country in the whole wide world allows foreign carriers the kind of access they get in Nigeria. Nowhere under the sun can you imagine that some foreign airlines fly from Port Harcourt to Abuja then Abuja to their country. That is very, very bad. The country should not allow it. They are draining this country to stupor. This permit to operate multidesignation didn’t start with this government but it should put an end to it.

Air France cannot be flying from Port Harcourt to Abuja then Abuja to France. Lufthansa will fly from Lagos to Port Harcourt come back to Lagos and go. They even do Abuja to Malabo, so what are your local airlines doing? Nowhere in the world, once you take off from your country you land in the other country, you must take off from that country and go back to your country. And not only that they are not even going to other countries from Nigeria, even within our country they are hopping from one city in Nigeria to the other before going. The federal government should look into this and stop it immediately or some of us might go to court to save the country. It doesn’t matter whether we win or not but let the public see that it is wrong.

Everybody is saying that the local airlines are not doing well how will they do well? We are being over taxed, we are paying so much for fuel, you are buying dollar at $1 at N505. And again let me tell you, the government gave us right to fly into West Coast, have we bothered to find out how many of those countries have even replied our letters. And this is how it should be. They will tell you they have not stopped you but they have not accepted you either. They don’t respond to your mails, their government protects them. They protect their own airlines. Look at Air Cote d’Ivoire, it is coming into Nigeria everyday more than how many times, but Cote d’Ivoire has not responded to our mails until recently because we now complained, we now decided that we might go to court to stop Cote d’Ivoire from coming into this country.

Other West African countries have not responded to us. They don’t want to give their airlines competition.

Some of these African countries set up their airlines because of Nigeria and they know that if any strong airline comes out of this country they are all finished. But it seems that we are supporting them to demean our own people. You don’t even need to stop them from coming in, just support your own airline to leverage on the Nigerian market, you will see they will have problem. It is a matter of time all these airlines will start having problems. The moment government allows Nigerian airlines to thrive; you don’t need any national carrier for Nigerian airlines to thrive. All you need is to create the enabling environment and some business people will even come in, but the way it is now only a foolish man like me that will come and invest, I only did this because I want to create jobs.

With these many challenges being faced by airlines, why is it difficult for the real airline operators to get together and mount pressure on government to remove these obstacles affecting your operations?

When I started, in my inaugural speech, which is still being circulated, I said that I have come to bring peace to the industry. A lot of animosities have been going on and I wanted it to be a thing of the past. To be honest with you, I wanted to corporate, but I ended up with most of them fighting me. I know so many of them, one in particular who has been giving press people information and falsehood to publish against me. I wish him well because one day they will do the one that will land all of us in court. So, I wanted to bring everybody together, the sky is too wide for everybody but these men are not seeing it that way.

Some airline owners are behaving like motor park touts. They involve themselves in all manner of intrigue, in all manner of things to demean the other; these are the things you find at motor parks. I thought it was a noble sector considering the amount of investment that they put in there. Some of us involve themselves in devilish animosity, devilish intrigue, under cutting and all sorts of things, trying to demean the other. I have come into the industry and my intension is to create jobs for people. And you can go and interview our staff they can’t understand some of the things I do for them. It is just that I am pro-staff, and pro-people, I just want to do God’s will that’s all. This is my promise to God, to create jobs, to turn around lives and that is exactly what I am doing. And God almighty is with Air Peace, so anybody fighting me or trying to demean us is only chasing shadows and you are going to demean yourself at the end of the day.

Let me give you a classic example. During the peak of Harmattan haze on December 27 we had to cancel all our flights to Owerri, Enugu and other destinations. We were waiting and hoping that the weather would improve so that we could even operate one flight to each destination. During that period we were operating six flights to Owerri. Hundreds of passengers were waiting, then at about 5:00 one of the domestic airlines started selling ticket for Lagos to Owerri.

Our passengers were shocked and angry with us because they said we could not go to Owerri because of bad weather but another airline was readying to go there. By 5:30 pm that airline had started boarding. We were wondering because the weather reports we were getting from Owerri indicated that weather was still below minima. That airline’s flight shut the aircraft door after boarding the passengers by about 6:00 pm. By that time you cannot go to Owerri but the airport does not have airfield lighting, but that was when that airline’s flight was about to take off from Lagos to Owerri.

After few minutes of closing the aircraft door and without any attempt to take off, the airline announced to the passengers that they could not take off because of bad weather in Owerri. The passengers were very angry. Our passengers who bought their tickets and mocked us when they were boarding their flight came back even more angry, but now angry with all of us. That airline knew even before selling ticket and boarding passengers that it could not go to Owerri, so why did it do that? They wanted the passengers to denigrate us, but in doing that they also denigrated themselves. That is the bitter rivalry and animosity I am talking about.

So if my colleagues want peace and harmony in the industry I am ready, I have already thrown the olive branch to everybody but they are not taking it instead they are fighting. At times, they will incite the media to publish that my airline is owned by all eastern state governors. But it doesn’t border me. But I know that if we work together we are going to achieve a lot for our benefits. I am willing to work together with the others.