How Government officials Undermine Growth of Aviation Industry

Aviation experts have alleged a deliberate effort by officials of government to murtala-muhammed-airport-Lagospursue policies and actions that are injurious to the growth of domestic airlines, failure to build maintenance facility and poor policy on manpower development. Chinedu Eze writes. The development and growth of the aviation sector in any country is planned, organised and strategically executed by government, its officials or others assigned to carry out such responsibility. It is not a knee-jack procedure where actions beget reactions with attendant transient regulations and policies that are arbitrarily enunciated to solve a temporary problem.

In countries that have gained from the aviation industry there were laid out long-term plans that at completion manifested in invaluable benefits and a boost of the image of such countries. Heathrow Airport in London has been the busiest airport in the world for many years. Ethiopian citizens do not travel but the country has the most profitable airline in the African continent and Ghana has a fairly beautiful airport but international airlines still prefer it to Nigeria. The reason is that these countries have organised system that dovetail with the expectation of international operators and they also abide by world standards. That is the problem of Nigeria. There seem to be lack of commitment by Nigerian government and its officials to abide by these standards. But Nigeria remains an attraction in air travel because of its large population and the high and growing number of travelers. But it is a country that has airlines that are not doing well. It is a country that has dilapidated airport facilities. It is a country that is yet to meet international safety and security standards. It is a country that has recorded air crashes than many other countries that have higher air traffic in the continent and overseas.

The Problem of Nigeria’s Aviation Sector

What is the problem with the aviation industry in Nigeria? Former Commandant of the Murtala Muhammed International Airport, Lagos (MMIA) Group Captain John Ojikutu (retd), said the problem with the aviation industry has to do with the actions of government officials in the Ministry of Aviation. He accused them of undermining domestic airlines, giving foreign airlines multiple entry points to various airports in the country and also giving them multiple frequencies. “It is the ministry’s politically appointed officials that are exploiting the domestic airlines to benefit the foreign airlines and I have no apology for saying so. These officials have now cancelled the royalties on Bilateral Air Service Agreement (BASA) and commercial agreements given to foreign airlines for multiple entry points and multiple frequencies. These are not technical issues from the Nigerian Civil Aviation Authority (NCAA) but political issues that do not benefit domestic airlines,” Ojikutu said. He said that not having a national carrier is injuring the nation’s aviation sector, noting that government officials give out frequencies that if well harnessed would have earned Nigeria huge revenues.

“Moreover, we have no national or flag carrier. Most of the airlines are privately owned. On the government side we have the culture of exploitation of BASA and commercial agreements unilaterally by political and appointed Ministry officials. But if well developed, domestic carriers should generate huge foreign exchange for government in the absence of national airline to give a challenge to the foreign airlines on the international routes,” Ojikutu said. He observed that domestic airlines are not given any incentives because possible incentives that should have been given to them have been diverted to foreign airlines and these include multiple entry points and multiple designations, thus giving out the Nigerian routes to foreign carriers. Ojikutu also added that by giving the foreign carriers multiple entry points, the lucrative domestic routes have also been given to foreign airlines who can land in Kano, Abuja, Lagos, Enugu and Port Harcourt. But he also remarked that domestic airlines have not adequately utilised the opportunities given to them by government like the intervention funds and the tariff free importation of aircraft parts.

“On the other hand, private (domestic) airlines too should not complain. They have benefits of various intervention funds and debt relief, which they hardly pay back and there is zero tariff on spares,” Ojikutu said. He noted that for domestic airlines to survive, government should revert foreign airlines multiple landing to single entry point, as there are no profits left in the domestic route for domestic airlines outside Lagos-Abuja, Lagos-Port Harcourt, Abuja-Port Harcourt, Lagos-Kano, Lagos-Enugu etc, which have been given to British Airways, Lufthansa, Air France, Ethiopia airlines, Emirates etc from where these foreign carriers airlift passengers to various international destinations. “You can’t compare  number of passengers on Lagos-Ibadan, Akure-Benin, Minna-Kaduna, Sokoto-Jos and Maiduguri routes and it is these routes that you want Nigerian airlines to develop after giving out the lucrative routes to foreign airlines,” the former Airport Commandant said. He urged the Minister of Aviation, Osita Chidoka, to put searchlight on the unilateral exploitation of BASA and commercial agreement by elected and appointed officials of the Ministry. “These are major sources of foreign exchange revenue of about $200 million annually for Nigeria. This is because our Nigerian airlines have no capacity to compete with foreign airlines resulting in the imbalance in the utilisation of BASA,” he explained.

Leadership Failure

Discussing Nigeria’s aviation industry in an international African conference recently in Addis Ababa, Ethiopia, a Partner with Ernst & Young, Ethiopia, Mr. Zemedeneh Negatu, said that Nigeria has one of the largest markets in Africa with the most favourable geographical location and should have the most viable airlines in the continent but its leadership is a failure in terms of providing policies that would help the growth of air transport in the country. He lamented that while the aviation market in Nigeria is worth $80 billion annually, Nigerian airlines have only three per cent of this market because foreign airlines have been given the opportunity to take over the market from indigenous carriers through multiple designation of frequencies, whereby a foreign airline is allowed to operate to four or more destinations without partnering with local airlines. “Nigeria has all the elements to become a hub but investors are afraid to invest their money in the country and unless you fix the up (government) because the top does not guide the sector well; it lacks vision and efficient regulation to build a viable aviation industry. Nigeria has no reason not to be the best in Africa,” Negatu said.

Poor Treatment of Indigenous Employees

Industry analyst, Olu Fidel Ohunayo, said foreign airlines operating into Nigeria need to brace up and correct glaring anomalies noticed in the treatment of Nigerians working with them and the sanctity of their operational guidelines regarding the Nigerian content as stated in documents submitted to the Nigerian Civil Aviation Authority and the BASA signed by the respective countries. “Workers of Air France/KLM in Nigeria recently embarked on a warning strike to drive home their agitation for better working conditions and improvement of salaries, under the leadership of the National Union of Air Transport Employees (NUATE). The Air France/KLM management response was simply distasteful. Rather than dialogue and negotiate with the workers since it was a warning strike, they tried to break the strike by hiring temporary charlatans to run the system at a considerable security risk to the system, airport and nation at large while also using all intimidating tactics to subdue the staff.

“Their pilots have given notice of a warning strike, while other staff domiciled in their base have done so in the past without getting the same response from management. Rather, they negotiated and prepared their customers for the strike by cancelling flights, offering refund or allowing change of travel plans without penalty,” Ohunayo said. He noted that these carriers lodge their expatriate staff in Ikoyi, Victoria Island etc in Lagos, and also provide police escort and protection right from the airport to any point that catches their fancy; all at a huge cost to and detriment of the local staff take home pay. So Nigeria loses in the aviation sector for the failure of government to protect indigenous carriers and local manpower from exploitation, an attitude which would never be allowed to be meted to the citizens where these airlines are coming from.

Code-share with Domestic Airlines

Foreign airlines argue that they do not code-share with local airlines because the later do not meet given safety standards and expected financial profile, which are standard to the international carriers. President of the Association of Foreign Airlines and Representatives in Nigeria (AFARN), Kinglsey Nwokoma, said: “It is about local airlines meeting the same safety standards like their foreign counterparts and also having operational system that is transparent. Otherwise, there should have been some kind of partnership between some of these airlines and that of international carriers. We have situations where different companies are merging together. Those days we just have Air France as a single airline but these days we have Air France partnering with KLM, Air Italia so the more that we have together the stronger the brand. I am an advocate of code-sharing. So, this is how it should be, but our local airlines should also code-share among themselves. They have been unable to do this and that is a problem.”

If top government officials involved in the aviation industry agree to develop the sector in accordance with given standard, they will execute government policies with the aim of developing the industry to compete effectively with others in the world. A successful aviation industry must have viable and profitable airlines, standardized maintenance facility and manpower development system that will engage high number of indigenous workforce every year.

http://www.thisdaylive.com/articles/how-government-officials-undermine-growth-of-aviation-industry/190592/

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