Funmi Ogundare
President, Aircraft Owners and Pilots Association of Nigeria , Alex Nwuba, yesterday, called for the strengthening of Nigerian airlines through access to sovereign credit to support their growth.
He also said the Nigerian airlines in their structure should be modified to trade more as public utility/ public companies so that the issue of governance as to how airlines are run as entities, can be solved.
Nwuba, who was a guest on The Morning Show on ARISE News Channel, spoke on the backdrop of travel ban and restriction of airlines from the UK, Canada and Saudi Arabia, which will take effect today December 14. He said if the issues of capital and governance are addressed, Nigerian airlines will be strengthened and become competitive globally.
He expressed concern that the biggest challenge facing Nigerian airlines is capital, saying that if the airlines borrow money from banks to support their operations, they will be able to take on the likes of Ethiopia airlines, Kenya airlines and Egypt Air.
According to him, “ we are borrowing at double digits, 18 to 20 per cent, whereas Nigerian airlines are borrowing at one or two per cent. On a competitive basis, if you look at the airlines , they are running a profit level of three to five per cent. So if you are borrowing at 22 per cent, it will be a disadvantage for
us.
“ We have called on the minister to say Nigeria should be able to access its sovereign credit, it is to raise low interest fund that will buy equipment to equip Nigerian airlines and support their growth. Even Nigerian airlines in their structure should be modified to trade more as public utility/ public companies in that sense, so that we can solve the governance issue which is how airlines are run as entities. So if we address the issues of capital and governance, Nigerian airlines will be strengthened and become competitive globally. And we will be able to take on the likes of Ethiopia airlines, Kenya airlines and Egypt Air. So basically, capital is the challenge.”
Asked why this has not been achieved, Nwuba who is also the former Chief Executive Officer of Associated Airlines, said in Nigeria, solutions have been proffered for a number of things, but they are not getting done, because “they are not addressing issues from that table, we are addressing it from a complete different point of view.”
Asked if the ban takes effect today, what should be the end game, the president noted that as long as Nigeria presents the issue to all parties as being fair to all parties,
, noting that in every negotiation, there has to be a win-win.
“Clearly, it is not fair in the case of the UAE, they have 21 flights coming into Nigeria, we have three and we are still struggling to get even those three. So it forms a basis on the same principles of friendlines and brotherliness. All of those diplomatic language used, is that we need to balance this game because it is only fair as committe of nations to do what is right for everybody. We are against travel ban because the restrictive opportunities is even against the issue of visas.
“We can take that approach to revisit everything on the table to say it is not fair. We need to be fair to each other, being fair to each other requires us to do things in a different way. In every negotiation, it has to be a win-win, it can’t be a you win, I lose, that war. So the idea should be a win-win,” he said.
Nwuba however said the travel bans should force Nigeria to look inwards and accelerate the African free trade area so that we can do business among ourselves more effectively.
“Regional trade is running 15 per cent or less. So, if we expand that, would we be worried whether we are banned from going to Europe? How many Europeans actually come to Africa? What percentage of Americans come to Africa? We are the nerve centre of economic activity around the world. So that movement is not necessary into those regions.
“Maybe these bans are a call for us to focus on developing the region as a trading block and by positioning the airline industry early on and looking forward into the future, we will be able to take advantage . But at the rate we are moving, we are just going to be spectators in the continent free trade area.”
He also emphasised on the issue of concession of the airport, saying that the problem is how we negotiate these deals and that it would face legal hurdles along the way because of the prior agreement, some in the national interest and some contrary to the national interest with a change in government.
