The President of the National Association of Nigeria Travel Agencies, Bankole Bernard, in this interview says poor policies have retarded growth of the aviation in Nigeria, stressing the need for government to take urgent action steps to save the industry and domestic airlines. Chinedu Eze provides the excerpts:
What is your overview of the industry last year and your expectations for 2019?
It was a good feeling when we realised that we came out of recession in 2018. We were expecting better gain based on the fact that we had pulled out of recession so that we can count the gains in the aviation industry. But to our dismay, I can say that there is really no tangible gain as it were. I can say categorically that the aviation world has left Nigeria behind. When you look at the gains that have been made in other countries around the world and Africa in particular. The world is not going to wait for Nigeria, and this should be a wakeup call for us to start seeing how we can develop the most sensitive industry in the Nigerian economy. You will all agree with me that aviation is not an industry that should be neglected in anyway or any manner; and I think to a very large extent that was why the federal government gave it a special portfolio under the Ministry of transportation, that aviation requires some level of attention and that was why a Minister was attached to it. But be that as it may, we haven’t seen that much growth as expected in the industry to the point that even the downstream sector is feeling the impact. In terms of policies, we haven’t seen any policy that enhances the growth of the industry. In terms of infrastructure, it is just of recent that new terminals at Port Harcourt and Abuja airports have been opened. But when we talk about infrastructure it goes beyond the terminals. As we speak, the runway in Enugu is so bad that it is a disaster waiting to happen. Flights cannot go to Owerri conveniently; otherwise the airport would have been shut before they get there because once it is past 5:00 pm the airport is shut down. What is happening to the biggest black race in the world where we have a population of over 200 million people? Air transportation is one thing I would have expected the government to lay a lot of emphasis on and make sure that, that aspect is developed to enhance the movement of people. Year in year out we keep having local airlines die, a new one will come on-board; the old one will die. We have not had a sit down talk to really understand why constantly the domestic carriers are dying. We need to look into the policies and into the tax regime. Do they have comparative advantage as local operators? What benefit are they getting from the government to keep them in business?
We have to understand very well that the industry is a sensitive one and the profit margin is very tiny; recognising also that every aspect of the business is dollarised or in foreign exchange. And here we are using a weaker currency, naira, to fund the dollar. What manner of concession is given? We can’t just sit back and assume that things will fix itself, except we take it upon ourselves to say we have to fix this industry.
Are you saying that the government has not really paid attention to the industry?
I think the government has paid more of lip service than giving it the attention that it deserves. I would have thought that with the kind of funds available to government we could have done a lot more than we are doing.
The president while commissioning the Abuja terminal said he was quite optimistic that very soon Nigeria would be the aviation hub for West Africa. Are you optimistic that with the way we are going this will happen?
This can never happen. It is not possible. It is going to continue to be a dream. You don’t just become a hub overnight. Tell me the plans that are in place, even to transit from our international airport to our domestic airports? There is no proper transit system; there is not connectivity between our international airport and our local airport. What sort of hub do you want to become? Is hub made by the word of the mouth? It is not made by just mouthing it; it is by conscious planning to ensure that the necessary facilities are put in place for you to become a hub. I can say to you that today a lot of airlines still prefer to go to Ghana to fuel up or to make repairs.
Why? Because they have made the processes of fuelling easy, they have provided infrastructure that will enable any airline that is coming to the country to do so. I can say to you categorically that it is not possible for Airbus A380 aircraft to land in Nigeria; even if they want to we don’t have the infrastructure. That is one of the biggest aircraft in the world. But this same aircraft landed in Ghana. What makes Ghana better off than us? This is not about politics; this is about doing the right thing. We have the capacity to do the right thing; we just choose not to do the right thing. The resources are there; we have a fantastic relationship with the International Civil Aviation Organisation (ICAO). There are a lot of things we can tap into. If the plan is to have Nigeria Air as our national carrier and it is not working out now are we saying, there are not alternative plan? In what way have we supported the local airlines? Because the same thing that happened to the local airlines is going to happen to the Nigeria Air and it will die within a short period. So it is just going to turn out to be another white elephant project. It is high time we wake up from our sleep and understand that the aviation industry is a sensitive one that requires the government full attention. Because it is the fastest and safest means of moving from point A to point B. and when foreigners are going to come to your industry that is the first entry point that showcase your worth as a nation.
The Calabar Carnival that just ended, when you look at the people that came from overseas to attend that event you will be telling yourself that inbound tourism has an opportunity in the country. How can this be enhanced with support from government and the travel agents?
Well, just like I have been saying, it takes a sound aviation industry to promote your tourism. Without a sound aviation industry, your effort in growing your tourism will just be a waste. Because when we are talking about inbound tourism, we are saying that we want the rest of the world to come and see what we have in our country. If their very first experience is a nasty one and there is no connectivity from your international airport to whatever local destination they have to be, how will you be able to grow your tourism? If you take a flight here today from Lagos it takes you straight to Atlanta, from Atlanta airport you can take the Delta Air Lines into any of the other states. If that is not possible there are connectivity with other airlines. Tell me what connectivity the foreign carriers have with the local airlines? In what way has government enabled that synergy? In what way has government formulated a policy that will help the local airlines as well as the local airports in those various states to develop? You and I know that as at today we have about 22 local airports, out of the 22 local airports only about three are profitable, not even to full capacity but you can say they are profitable to an extent. Why do we have those airports? What policies do we have in place to enhance development and increase activities in those airports? So why are we making ourselves a laughing stock to the rest of the world? I think it is high time that we got serious. If we are not serious as a nation the world will leave us behind.
The world is revolving and Nigeria cannot stay stagnant. So it is either we revolve with the world in terms of development or we will be left behind.
How critical is the downstream sector to the aviation industry and what can you tell us about the performance of your sector in 2018?
I can say to you that business in 2018 had a marginal growth based on the issues that we had in 2017 that spilled over to 2018. And even at that; we still had a marginal growth rather than experiencing a decline. Because by the second quarter all the airlines that had smaller aircraft had gone back into providing inventories for people to have. What I will say is that the travel agencies in Nigeria play a pivotal role in the aviation industry. The role of the travel agencies cannot be undermined; thanks to the advanced technology you see everywhere around the world; otherwise the travel agencies would have gone into extinction. But rather they are still growing by the day not only in Nigeria but also even outside the country. I can say to you categorically that most of the foreign airlines push their sales to us, the travel agencies to distribute on their behalf. And we have been doing that effectively and they have been getting their money. So their business is not threatened in any way and they are making their sales. So in a way they have been able to cut cost to a very large extent by pushing their businesses to travel agencies to handle. Even to the extent that some have even appointed our members as General Sales Agent (GSA) which reduces their cost of operation. So this critical sub sector of the aviation industry needs to be looked into. The government needs to understand what are the activities of these travel agencies? For example, our association has over 6,000 members with each of those members employing between five to 100 staff. Are we saying that such industry should be neglected? Shouldn’t there be rules governing such industry? Shouldn’t there be more intervention into the modus operandi of such industry?
In 2018 there was a bold move to sanitise the downstream sector of the aviation industry and this was done in partnership with the Nigerian Civil Aviation Authority (NCAA), how far have you gone with this effort to sanitise the system?
Well, we have been making frantic efforts on our part to bring some level of sanity to the industry. But just like I said, the neglect of the downstream sector from the government is quite obvious. Because they feel that they will make more money from the carriers than talking to the agents. And what they fail to understand is that the agents are employers of labour and 80 per cent of the airlines’ proceeds pass through these agents. If 80 per cent of the proceeds pass through these agents then there is need for us to give special attention to the sub-sector, so that we can make sure that they capture every amount that is being sold. In 2017, I mentioned that we sold $1.4 billion; in 2018 we sold $1.4 billion with some fractions. Are we saying that an industry generates about half a trillion naira should be neglected? Are we saying that, that is not an amount that is added to the GDP of this country?
So why is government not paying attention? Why should it be private sector involvement alone? It is so bad that we are beginning to even see some institutions that shouldn’t register as a travel agency registering themselves as travel agency. The last time I saw Nigerian Army travel agency wanting to be a member of NANTA. Is that how it should be? If there are proper rules should it be like that?
So the implementation of the law is not effective?
It is zero, it is not effective in anyway. Enforcement is zero.
Do you have the figure of the ticket sales?
We are still waiting, you know the trading is done on the International Air Transport Association (IATA) platform and it is at the end of the year that they would collate everything, because they have changed their system a little bit, so we believe that by the end of January, 2019 we should have the exact figure of trading for 2018. But I can only have an estimate, which is about $1.4 billion.
Over the years we always have an estimate of the amount of persons that travel domestically and internationally. The international is about four million, while domestic is about 10 million plus. Why is passenger movement static and not going up?
It is static because if you look at it year-in-year out, you will see that as one airline is coming up to the forefront another one is taking the back sit and going to its early grave. What will give consistent growth in our local market is for us to have proper policies in place that will allow local airlines to grow. For instance, when you look at the computation of an air ticket, if the air ticket is N60, 000 out of that N60, 000, 60 per cent of it is full of taxes. When you have 60 per cent that means the airline is probably left with 40 per cent, but 40 per cent cannot take care of the cost of the airline. By the time the maintenance checks are due the airline will not have money to fulfil such. So they will constantly go bankrupt. Has the government looked into the fair composition? We have units in NCAA that is responsible for all these. So if you have units that are responsible for all these then why do we constantly have a collapse of the domestic carriers?
If you look at what the government did to the banking sector, it wasn’t only that the government was interested in them merging, it wasn’t the merger but the government came up with policies that enhanced the financial sector that gave them the possibility of trading globally. Because it was after the consolidation that we started seeing Nigerian banks having offices offshore in South Africa, London, New York. Why can’t it be done in the aviation sector? If it is done that way, once the regulation is good, the right policies are in place, investors will be attracted to the sector. Investors are attracted to a sector that they see favourable policies.
Such favorable policies are lacking in the aviation sector; that’s why everybody is being careful. And that is why you will see that the moneybags would rather patronise the chartered flights than scheduled operators. So we have graduated from saying that flying is luxury to making it look like the commercial “Molue” and it shouldn’t be. Flying should be the safest and the easiest means of moving from point one to point two. And you are able to achieve as much as you can within a short period. We are not giving up on the government that is why we are saying let us have a round table discussion on the existing policies. Some of these policies are archaic and they are not suitable for this kind of operation in the aviation industry. What can we do? What policies are we putting in place first of all to take care of our airport terminals in terms of infrastructures? What policies are we putting place to support the local carriers? What policies are we putting in places for the foreign carriers that are coming to our country? I can say to you categorically that Ethiopia Airlines went to Togo to establish a hub where they now use. Ethiopia airlines also established a national carrier for Togo, which is Asky. The same Asky comes to Nigeria. So in whichever way, the government of Togo is benefiting from it as well as Ethiopia Airlines.
What are we doing even with our airport in Jos that we consider as a cargo airport? Most of the fruits that are being imported from South Africa and neighbouring countries are there in Jos because of the temperate weather. Which means that if there is availability or if government is giving concession to an operator that brings those fruit down south he will do it. So it boils down to the policies that are on ground. How far have we gone with the Maintenance Repair and Overhaul (MROs)? Do we have MROs for maintenance of the aircraft or they are still flying out? So what development are we going to say that we have at this point in time? So these are the things that we need to look into. Let us get our MROs up and doing, let us increase the level of infrastructure that we have at our airports. Let us give the relevant support to the local carriers by giving them some form of concession; it doesn’t have to be bailout fund.
Government has to give the airlines concession that gives them comparative advantage for operating in our economy. Let us see how we can tie aviation and tourism together to be able to make returns from people visiting other states aside Lagos, Abuja and Port Harcourt.
How do you see the behaviour of the foreign airlines in 2018 for them to rake up this kind of revenue? Do you think they had more patronage compared to the previous years? And is it a smooth ride for foreign airlines to operate in Nigeria now?
The foreign operators can see the huge vacuum and they will constantly capitalise on it. I will not call it exploitation, they are not exploiting us, they are into business and they can see an avenue for them to make money and they are making money. If you are speaking with any of them they will tell you it is as a result of demand and supply. For instance, if an airline comes into Nigeria and there is no aviation fuel, the airline is going to fly to Ghana and quickly go and refuel. But guess what, that cost is going to be on Nigerian passengers. So if the cost is going to be on Nigerian passengers definitely the cost of ticket to Nigeria or out of Nigeria is going to be more expensive than other places. Why? Because we have not made available infrastructures that will support smooth operation. If an airline comes to Nigeria and it develops a fault, if the airline will have to fly back to its country to go and import the parts to fix the aircraft as a result of us not having it in our country, whatever duties that we are charging on that aircraft, they are going to pass it to the passengers.
So there are several reasons why the cost of tickets in Nigeria will be high. And movement is inevitable, Nigerians enjoy flying, they enjoy travelling from one point to the other. So they will continue to fly and that is why you even see the domestic carriers despite the fact that services have been poor, people don’t have a choice, they still keep patronising them. So a lot depends on the government, if the government can help in the area of policy implementation that brings relief to the aviation industry then the economy has the tendency of even growing faster. If four aircraft should land on any of our terminals you need to see how rowdy the airport will be, it is almost unbearable. Why should it be like that?
The NCAA recently made plan to relocate to Abuja. Do you think its stay in Abuja will have any effect on regulation and managing the airlines better?
The question is, is Lagos not part of Nigeria? Are we saying the government cannot operate from any of the states? Why must everything be centralised in Abuja? It doesn’t make economic sense. Most of the commercial airlines are operating from Lagos. So why must it be in Abuja? I really don’t understand the rationale. And I think it is high time we woke up and stop taking decisions based on sentiments. What it means now is that anybody that needs anything to do with NCAA will fly to Abuja. Is that not waste of resources? I think we need to make governance a lot cheaper than making it more expensive for people. It is a regulatory body and as a regulatory body it can be operating from anywhere. I do not see the sense in moving to Abuja. The Minister can stay in Abuja but the agencies can operate from wherever that has the largest traffic. So moving it to Abuja is just going to make things worse in Lagos. With them being in Lagos we have gotten little or no attention, now you are moving them to Abuja, it is just going to be a nightmare.