The Group Managing Director, Finchglow Group, a travel and aviation development company, Mr. Bankole Bernard, in this interview says concession of the airports will attract international funding to upgrade, modernise the facilities as well as remove political interference in the management process. Chinedu Eze brings the excerpts:
What is your view about concession of airports?
Simply explained, an airport concession involves the transfer of the responsibility of management and development of the airport to a private operator, while the ultimate ownership remains with the government. Where we are in Nigeria, according to the International Air Transport Association (IATA), there are predictions that developing countries, including Nigeria, will see a surge in air transport in the next 15 – 20 years. However, with this predicted growth in air transport, many of these countries including Nigeria do not have the facilities to manage the expected traffic. This situation perfectly describes Nigeria. With the country’s situation of having limited resources to expand its airports, the best option in view is the concession of our airports as rightly raised by the Minister of Aviation, Sen. Hadi Sirika.
According to the National Bureau of Statistics, in 2018, Nigeria’s air passenger traffic inched up by three per cent with a total number of 14.82million travellers, as against 14.26 million in 2017. In 2019, the passenger traffic in the first half of the year hit 8.48 million compared to 7.56 million in 2018. With passenger traffic growing at that pace, even though we have seen some setback due to the COVID-19, air transport will soon rebound and the expansion of our airports should be a focus area. In a material published by the International Air Transport Association on Balanced Concession for Airports in 2018, the global body pointed out what we must consider to make our airports work. Some of the areas that should be critically checked are as follows: selection of airport concessionaires, determinants of concession length, concession payments and charges, super-profit protection, consultation processes, capital planning and execution and continual improvement and airport service quality. Benefits of concession include the development of the airports to world-class standard, proper management and accountability, removal of government or political interference in the activities of the airport.
It would also give room for technology and advancement, customer satisfaction and economic growth at the airport and the government can focus on other areas with its limited resources. So, the truth is that the aviation industry is a very sensitive one and everywhere around the world we have seen aviation take some countries to their new haven economically. Aviation has helped them build a better economy and for a country like Nigeria, we cannot be left out in using aviation to develop our economy. This will enable us reduce the level of dependence on oil as it were. So based on this, the Hon. Minister of Aviation has injected some fresh hands into the aviation industry, which has changed the industry positively. So the idea of concessioning is a fantastic one. But people do not understand what concession is all about. Concessioning does not mean transfer of ownership. The ownership of our airports still remains in the coffers of the government. The only thing that is being transferred is the responsibility of management of those airports. So let us conveniently separate it, ownership remains with the government, but the responsibility of the management of those airports is now in the hands of reputable technocrats that understand the industry very well. So when the concessioning is given to reputable hands then they will deliver better service to the travellers, better service in the industry, and better service even to the regulators.
When we talk about concessioning, are we talking about giving the entirety of the airport out? No. We are talking about some of the things at the airport. For instance the airport terminal, which is what most travellers or users get to see, they do not get to see how the runway works. They do not get to see the management of the navigation aids. Those are sensitive things that should be in the hands of the regulator because that is back-end. So concessioning needs to be properly explained to the common man for him to appreciate what it is. It means that it becomes more profitable and more user friendly for everyone.
Are you not surprised that even the aviation workers and their various unions are very much against this and will you say that they don’t know of this perspective that you just raised now?
Now let me come from the perspective of the unions; even the unions too are stakeholders in the industry. The union is like a child, now when you tell a child to stop playing rough or not to play with certain gadgets, it might be harmful but the child might not know. So more than often the unions are not well informed on the position. All they are saying is that there is going to be layoff of workers, they stand not to benefit like they were and what have you.
But tell me today, MMA2 (built and being managed by Bi-Courtney Aviation Services Limited (BASL) are there still no workers there? Are they not getting their entitlement? Are they not better paid? Concessioning will guaranty win-win for everybody, including the investors that has dropped the money. Then government can use money available to develop less patronised airports around the country. So, our airports should be given to the technocrats that can manage them better and make them more profitable. And the government stands to benefit at the end of the day. I will give you an instance; you might not consider it as concessioning but look at it this way. The IGR (internal generated revenue), for each of these states in Nigeria. Those governors that have embraced PPE (Private Public Partnership), they have boosted their IGR. Like Lagos State now is generating between N50 billion and N70 billion monthly.
When Bola Tinubu was there as the first governor, they were getting about N5 billion monthly and they thought they had done well. Babatunde Fashola made it N25 billion and Akinwunmi Ambode took it up. So it will continue to go up because of the efficiency that has been brought into it. That is what the union needs to understand. They are in a better position when the airports are concessioned.
There is another argument that for the federal government to provide jobs in the aviation industry, the airports have to be modernised and that the current union leaders and those who have put up 25 years in service should be retired so that more jobs would be created for the younger ones. What do you think?
The truth is the same way we are bringing rejuvenation into the industry and make it technology savvy and friendly, it is the same way the unions need to rejuvenate. You will find out that in the union we have those that are old and their thinking remains archaic. So, employing technology into how things are done is like a challenge to their existence. Whereas they have got it all twisted and they have got it all wrong. If they understand better, trust me, and the only way they can understand better is to allow the younger ones even take up the unions of those bodies.
Do you see self-interest in all of this?
Definitely, and there is no doubt about it. We must understand that when you have done your tenure let other people come in, but they continue to rotate older hands in that circle and you see that the circle is just within themselves. They need to allow younger people come into it, just the way I took over the position of NANTA (the National Association of Nigeria Travel Agencies). I brought a lot of vitality into it, fresh energy, fresh ideas and things changed and them everybody got to know value and the worth of NANTA. So the unions need to take that same step for things to get better.
Looking at the concession and the entire roadmap that the Minister initiated in 2016, it is taking long for any of it to be actualised, what do you say about this?
We must understand that when the Minister came up with the roadmap, remember that the Minister too will have to go through the federal executive council to be able to put it across to the President as well as the council members to buy into that idea. So if he is not getting the relevant support from the industry, do you think it is going be an easy sell at the council? It is not going to be an easy sell at the council. We in the aviation industry need to rally round the Minister, give him the relevant support; the council members will just give it a nod without further delay. But when we have selfish people within the system that pollute the minds of some of the members at the federal executive council, it will be a difficult to sell. That is making them to see the negative part than the positive part. I have heard a lot of criticism about the concessioning that was given to Dr. Wale Babalakin’s company, BASL, but guess what; nobody appreciates the benefit and the good management of that particular concessioning. Like you and I said, it is still far better off than most of our airports that are managed by government. Why? Because it has been given to a technocrat to manage, someone that understands what airport management is all about.
Some industry stakeholders are apprehensive about the concession programme because they feel it would not be transparently done. Some of them insists that it should be given to local investors. What is your reaction to that?
Yes, I might say that concessioning, one of the key benefits of it is the fact that we must identify those that have capacity to do it. We are glad that Wale Babalakin was tried out; it wasn’t easy because there was no pre-knowledge of it. So he struggled at the initial stage until he was able to bring in experts who are foreigners to manage it for him before he could get it right. And if we are talking about indigenous hand, do we have anyone that has been able to manage it well? Why are we concessioning in the first place? What are we trying to achieve with concessioning? The whole idea is to make the airport profitable, and viable for use. So if that is it, then we must look for the best of hands that can manage it for us. I want to correct this at this point, the world is a global village and Nigeria will not be exempted. Tim Clarke is not an Emirati but he is managing the biggest airline in the world, which is Emirates. Why didn’t they say that they must give it to an Emirati to manage? I think we need to get that mentality out of our heads.
Now, even if it is concessioned to a foreigner, there are conditions or labour laws, which means that indigenous workers must work with the foreigner that has brought huge investment into your country. Because at the end of the day it is that huge investment that we are interested in, so that such funds can be diverted into other airports that are lying fallow and are not productive. So we can now use those funds to develop them better and then start to use it. So that is what is necessary.
For probity and proper accountability or even to re-assure the new set of investors that will come in, don’t you think the concession process should have started with the resolution of BASL, Federal Airports Authority of Nigeria (FAAN) imbroglio over the terms of concession of MMA2?
Let me say at this point that those technicalities will definitely be addressed. The Minister is enlightened, exposed and he is a respecter of law as well. He will not violate all those agreements; he will ensure that those agreements are well natured and respected. I will give you an instance, when the idea of a national carrier was pushed forward; the ex-staff of Nigerian Airways were they not settled? They were settled. But initially they were making so much noise but when they were settled none of them came out to say they have been settled.