Chairman of Air Peace, Chief Allen Onyeama, spoke to Chinedu Eze on the policy measures to be introduced by government to refinance airlines and ensure safe operations. Excerpts:
What is your reaction to the new reforms rolled out by the Minister of Aviation, including the directive that every commercial airline must have a Nigerian pilot in the cockpit of its aircraft?
I want to use this occasion to command the government’s effort to create employment for our teaming unemployed people, pilots inclusive. The minister for aviation yesterday (February 3, 2015) announced that henceforth from the next two or three months every aircraft must have a Nigerian pilot in the cockpit. It is something very, very commendable. Why are we here? For us in Air Pace we want to create jobs, this is why we are here. We don’t even need anybody to tell us that, so the Minister having come out with this government policy of making sure that Nigerians are employed is something everybody should support. We know that it may be difficult in the beginning but if the will is there that will be surmounted. This is because if you looked at it this way, we have hundreds of Nigerian pilots that are unemployed. Some young Nigerians have not even been to the cockpit to fly for one day after leaving school. How do you get these Nigerians to fly if we continue going outside to employ? Employing expatriates encourages capital flight. If we continue going outside to employ, you are enriching other nations and we keep on impoverishing our environment. So, I support the government for being very mindful of the consequences of not taking this kind of action.
I think this action is even belated, so I support the government for coming up with it and it is something that will help employment. If you employ one Nigerian pilot, you are feeding over 10 Nigerians in the least. We are Africans we know how to help each other. He feeds his immediate family; friends might come to him and ask for help. The incidents of rise in insecurity could also be traced to unemployment. So, in other to address issues of insecurity in the country you have to also begin to address the issues of unemployment. When people are gainfully engaged there may be little or no time for vices to take over their lives. To that end, I support the government.
With us in Air Peace here we have over 95 per cent of our pilots are Nigerians. And let me tell you something, Nigerian pilots are s some of the best in the world. Nigeria pilots do not take risk, average Nigerian likes life. So, they are some of the best. If you give them the right equipment and they work in a stable place or a place that does not tolerate unsafe practices, you will have the best of them. Some of these expatriate pilots are not really qualified; if they are very, very qualified they will stay in their country. Most qualified expatriate pilots will never want anything to do with Nigeria. I am not saying all of them but majority of them are not qualified. If they are that very good they will never ever want to come to Nigeria when they will come and people will be telling them about Boko Haram, telling them about Niger Delta militants, telling them about armed robbery and all sorts of things. But we neglect our Nigerian pilots to our detriment. If you motivate the Nigerian pilot very well he will give you the best. That is why in Air Peace our pilots will tell you that they are highly motivated here and they are very happy working with Air Peace. We have the best pilots in the land and we want any airline to challenge us on that. We have the best pilots in this country flying for Air Peace.
The Minister also raised the issue of multiplication of charges by aviation agencies. Because of these multiple charges and other policies, many operators in the past had described the Nigerian air transport environment as very harsh. Do you agree to that?
There is no doubt about that; that the environment is extremely, overwhelmingly harsh in Nigeria. There are a lot of things you have to take into consideration, the airline operators are reeling under a very, very non conducive atmosphere, non-conducive business environment. Take for instance, you cannot compare this country with America or Europe, in America if anything goes bad in the plane you can go to the next aircraft parts market and get that and fix it. In Nigeria if you don’t have it in your warehouse, that plane is grounded. You are losing time, you are losing money. So the cost of operating commercial airline in Nigeria is high. So government should be mindful of the fact that ab-initio these airline are already disadvantaged right from the day they got their AOC (Air Operator Certificate). Nigerian airlines are already disadvantaged right from the day they are licensed to fly. So government should also be thinking about how to alleviate their problems.
The environment must be conducive for their operation. The multiplicity of charges is unacceptable and I am happy the Minister is addressing that too. He is talking about streamlining these charges and making them look real, like a little bit to the left and a little bit to the right kind of arrangement, whereby airlines are not unduly over charged. I think that is what the present government is trying to do and which is laudable. We will encourage them to implement it fast. We do not want the unfavourable but prevailing situation where you pay five per cent here, five per cent there and 10 per cent there, what is then left for the maintenance of these planes and yet we want to run safe operations.
How do you run safe operations when you cannot afford to buy your spare parts? The little money you are getting from passengers, who are not also willing to pay so much, you are giving some to all manner of agencies. I am not saying that people should not pay taxes; people must pay taxes because that is what government can use to run this place better. Airlines must be given tax holidays, especially new airlines coming up, because you are not yet there, you cannot attract the kind of clientele you are supposed to attract for the first one year or two years. But in Nigeria, immediately you start operation, you have already started paying. And the airline business is so capital-intensive, you talk about staff, you don’t have to go down on the issues of staff because you must be adequately staffed to run these operations.
You must also motivate your staff because if you owe staff salaries then you are causing problems. At the same time you have to face the cost of maintenance. We don’t have any facility in West Africa where you can do your C-check. If you want to do your C-check you have to ferry these plans abroad. The cost of even bringing my planes from Texas, it cost me almost $200,000 per plane to ferry the plane from San Antonio to Nigeria. The same way, if you take them to Texas to do your C-check , on coming back, the cost of fuelling that aircraft and other charges, it will cost you almost 200,000 dollars. So where do you make the money? You talk about insurance; also in Nigeria the insurance is so high. The kind of insurance we pay on our aircraft are not the same as the ones people from the UK or United States pay, we pay very high insurance premium.
The insurance companies do not want to insure your aircraft because they say you are operating in Nigeria that Nigeria is unsafe so the premium becomes very high. So these are some of the things that militate against safe operations here which makes it a non-conducive business environment. Again, you think of issues relating to aviation fuel, almost 40 per cent of what you make goes to aviation fuel. I started operation in October and between then and now I have spent close to N700 million in aviation fuel. A lot of people are talking that the fares are high; I don’t agree the fares are all that high even though in Air Peace we brought down our fares. Because we know a lot of people’s purchasing power is very low and we want them to fly.
We want to give them that joy of flying to their chosen destinations. But at the same time these fares cannot really be sustained for a long time. The exchange rate now is over N210 per a dollar; assuming we are offering tickets for N10,000 in October when we started, N10,000 at the exchange rate then was about N163 or N165, if you divide that you will be getting about $61or $65. At this moment what we should actually do was to divide it with the former exchange rate, you get $65 and you multiply it with the exchange rate and give it to Nigerians as our base fare for now, but we are not doing that, if you do that it will get up to N13, 000 as your cheapest fare and everybody will cry. The purchasing power is not rising as the devaluation is setting in, so we are operating under a very, very harsh environment in this country. On the issue of importation and clearing of goods, this is the only government that has afforded this country zero import duty on aircraft acquisition or purchase of spare parts. However, is this being implemented? That is another thing. The President means good for the country but is it being implemented? Because there are other hidden charges that the Customs will give you. They ask you to pay this, pay that at the end of the day the whole thing is defeated. But at the same time that has really helped because it is not as it would have been if there was no waiver at all.
So, the business environment is very, very harsh. Then another thing is the issue of space for maintenance hangar. You maintain your plane in the hanger on the open, which is very untidy. The flying public don’t want to see that kind of thing, it is scares them when you open your engine upside down and you expect them to come back the next day. Anybody who wants to have a hanger should be given the opportunity to have one by the Federal Airports Authority of Nigeria (FAAN) providing land space for people who want to build hanger. Everybody must not build hanger, those who want to build can build and allow others to use the hangers. That is how it should be.
What do you think about government helping to train for the airlines, including type-rating in order to help the airlines?
Well, I think the present government has done a lot towards aviation. The present government of President Goodluck Jonathan has been doing that already, I am sure the government has trained over 400 pilots, over 500 aircraft engineers and several other people in the aviation sector through the Amnesty Programme. So this government has already done that. The government of Rabiu Kwankwaso of Kano state also has sent about 100 people to Jordan to be trained as pilots. Some other state governments are training bit by bit because it is very expensive venture. However, the snag there is that you train and some others poach, it is a trend in the industry and you cannot kill that. There are other ways of curtailing it, by bonding them. We also in Air Peace we have been training people and we have bonded them so that they can spend some days with you before they start their nomadic journeys.
The Minister also said that the airlines must have training programme which must be reviewed before renewing their AOC by the Nigerian Civil Aviation Authority (NCAA). Do you think that goes down with the airlines?
On that issue the government means well. What they want to do is to create a home workforce in the aviation industry, which is good. However, is it practicable? It could be practicable if so many other things are put in place. For example I talked to you about the harsh business environment, if the airlines are weighed down with all these things I have told you and you add that one, there may be problem. But the government has given us waiver on importation of aircraft. If that is adhered to and at the same time these charges are removed, the airlines should be able to train their own staff. It is in the best interest of those airlines to even train people and put them under bond.
But some of the airlines are facing financial challenges and so they might find it little bit difficult at the beginning but it is something that should be done. So you recruit the staff and train them according to your own vision and so they start with you from the beginning. What the government suggested was something good but we need the government to support that too. The government has to support the airline to be able to do all that; not necessarily by training these pilots themselves but in making the business climate over here for aviation industry to be conducive.
First of all, the government should tell the Central Bank of Nigeria to allow airlines to access foreign exchange from Central Bank directly at Central Bank rate so that the exchange rate for the airlines will be brought down. If one spare part that you will take out is about a $150,000, instead of me buying it at N160 to a dollar, as it used to be before, I am now paying N210. We should also be helped by government to borrow money from the banks at single digit interest rate. Anything beyond single digit, forget it. Borrowing money at 25 per cent is killing; you are already dead on arrival. So, government must have to facilitate single digit interest rate like it is done abroad. Abroad you get financing for about one per cent, two per cent so why won’t you go out there and buy 20 planes and run a very healthy operation.
So if we are not paying lip service to safety the banks or the Central Bank of Nigeria (CBN) must also do something about single digit interest rate. No business functions without borrowing, you must borrow that is the only way you develop capacity. So we need the banks and those who are getting this money should also put then to good use in the industry. I mean one thing is to get the money another thing is apply the money for what it was meant for. The industry is replete with stories of people who collected money for this kind of thing and not using it properly. But government should not use that as an excuse not to look at others, you look at the integrity of people who own the airlines; that is the most important thing. You scrutinise the company to know the owners, does the owner or owners have that integrity to be given billions of Naira to do business. The banks should be able to know those who have integrity, so you give out money to a criminal you will reap what you sowed. So they should know.
How do you see the travel market from the passenger’s angle after operating scheduled flights for 100 days?
Well, if you are asking me about Air Peace and what happened to us in the last 100 days, I must give thanks and praise to God almighty. The thing is this at times even we in Air Peace we forget that we are 100 days old. When we were five weeks old we thought we were just five years old. A lot of people forget that Air Peace is just 100 days with the land mark achievement we have brought to bear in the aviation industry. As far as I am concerned, Air Peace has changed the face of aviation in this country. Whether we like to accept it or not, passengers will tell you that because of the arrival of Air Peace a lot of other older airlines are changing the way they do things. And that is very evident, everybody is trying to sit up because Air Peace came with a different brand entirely and Nigerians are happier for it. Nigerians never enjoyed the kind of Christmas they had last year, especially people from the South Eastern part of this country. The South Eastern part of this country had the best Christmas ever as it pertains to transportation through air in the last ten years. Last year was their best.
Nobody had to bribe anybody, nobody had to pay through the nose to fly an economy ticket at N40,000, N45,000; nobody had to sit at the airport for 20 hours begging to be taken to his destination. Air Peace plugged the holes that used to be there before. So, we’ve brought some positives to the industry, on time departure and everything, we don’t insult people and when we delay, which is inevitable at times, we even serve them food. While waiting we will tell them why they are being delayed. I have had a cause where we overbooked by mistake because we moved a schedule up, may be, from 7 a.m. to 9 a.m. The person who did it forgot to move the passengers who had already booked the 7 a.m. flight to 9 a.m. And 9am flight now got fully booked, on that day the 7 a.m. passengers arrived; there was nothing to be done. Some other airlines might keep you there until it is conducive for them, I didn’t do that. I ordered that the private jet take extra people who couldn’t get accommodated at our own cost and flew them to Owerri and came back empty. This is because we hold the customers in high esteem, without the customers, all of us won’t be here and that is how business should be run. The customers are king and they should be treated nicely. They are giving you their money, so these are the things Air Peace has brought to bear that has marked us out.
With your coming in, do you think Nigerian airlines have the capacity to meet the demand of the number of passengers we have now?
The industry is highly underdeveloped in this country. Part of the reasons and chief among the reasons is the devilish competition amongst the airline operators. Those who have been in this business have done nothing to develop the industry. A situation where they de-market each other and at the process of de-marketing each other they are putting so much fears in the minds of the flying public or those who would have taken to flying. When you tell them that airline XY Z is unsafe, airline XYZ’s plane is 75 years old, airline this doesn’t have this. I have brand new aircraft, I have this and the other one doesn’t have that. The other airline will just crash. When you continue de-marketing other airlines many people will become afraid to fly any airline; that is why the industry is highly underdeveloped.
In Nigeria, less than one per cent of our populations is flying. When they tell you that 10 million people flew this year, forget it, some of us fly twenty times a week and it means twenty persons in your calculations. So, a lot of people don’t fly and this is a huge country with vast land, 170 million people, not up to one per cent is flying. If we can develop this industry for at least five per cent to fly, even one per cent to fly in this country all the airlines will be smiling. But they don’t do that; they keep on engaging themselves in things that are so sordid and unprintable acts and it is so unhealthy. The competition is not healthy in Nigeria and the airline operators also are not helpful. I heard somebody said that somebody was planted in somebody’s airplane to be shouting smoke, smoke. And the moment the flight is aborted people scrambled for safety destroying the man’s plane and at the end no smoke was discovered.
How do you rationalise that? A situation where an airline lost three airplanes, same type in one week to vandalism, how do you rationalise that? Where some airlines want to stifle others just to be alone, it does not augur well. So these are part of the things militating against having the kind of passenger load all airlines in Nigeria should be having. With our population the customers are supposed to be begging to fly. They will book their ticket may be one month ahead but that is not the case because a lot of them are not flying. A lot of people are scared of flying. If you say there are accidents in Nigeria, other climes have accidents too, these things at times happen. But the thing is that people catch on the unfortunate incident of others for their own gains but they don’t gain in the long run. They can only continue suffering and thinking they are gaining. But at the end of the day they should look at their account book and ask themselves have I done myself any good?
So, airline operators should come together as one, shelve their differences and develop the industry. The issue of code-sharing, in Nigeria you don’t have it. I will like to code-share, Air Peace would like to code-share with somebody. Because you cannot say, one day you might want to go to Kano and your plane develops a snag, instead of keeping the helpless passengers waiting you call the other airline you are code-sharing with and say please takeover these passengers straight away to Kano and they move the people to Kano. You are getting something and the other airline is getting something too. You are not losing entirely but in Nigeria once they have a snag they keep the plane there, fiddling with the plane to see if they can repair it. Three hours, four hours, five hours in the long run they might even cancel the flight without an apology.
How do you check de-marketing? Is there nothing the regulatory body can do to check such excesses?
There is something they can do, they can bring up a rule and call them to order. See, the Nigerian Civil Aviation Authority (NCAA) is a very powerful regulatory body; they can wake up this morning and say Air Peace for this and that you did we are suspending your AOC. Nobody is above the law; no airline in this country should be above the law. We all operate under one law; this is not a jungle where people will do things with impunity. The NCAA has a right to look into certain allegations and correct them. De-marketing is very high, I know one airline that had an unfortunate incident some time ago, they had a crash and they were de-marketing the airline, precisely Dana Air. Because Dana gave them a very stiff competition in this country, Dana brought good service and they were really doing well before the unfortunate accident.
They were saying Dana airplanes are 95 years old; that they will crash, it is a lie. Nigerians should fly Dana if they want to fly Dana, if they want to fly Air Peace let them fly Air Peace, if they want to fly Overland let them fly, if they want to fly Arik let them fly, if they want to fly Aero let them fly. It is annoying and it is ungodly for certain airlines to engage in de-marketing others. It does not help them in the long run. So when you create a monster, you definitely are going to reap from that monster, there is no two ways. It is the natural principles of life, you must reap from it. If you are in the business of de-marketing others, if you are in the business of not wishing others well at the end of the day you will be highly indebted to everybody. One thing I do in this country is that every morning I pray for Air Peace, I pray for every other airline because if anything affects any other airline in this country it will affect us. God forbid if any airline drops from the sky it will affect everybody.
Watch it any time there is an incident the figures deep for every airline. It will take throughout that year before people recover from it. So, this is not something we should be praying to happen, somebody even told me, do you know they throw stones into people’s engines. How could people be that devilish that they could throw stones into your engine? Or they go to your counter and sprinkle blood, what do you intend to achieve? Is it to scare you out of your place? Do they think you I am a small boy before I came into this business? So for us in Air Peace we don’t care about some of those things; we pray for everyone, we give them love in return. We ask God’s love to be on them, we are like Stephen: God forgive them because they don’t know what they are doing. That is my principle, and nobody under this sun can bring down Air Peace. I heard about somebody saying one big airline operator saying just give then three months they will fizzle out. The person is joking because Air Peace will outlive my generation and generation yet unborn. I have never floated anything that does not work. Air Peace will outlive this generation to the glory and honour of God almighty.
As you just started operation, what is the level of utilisation of your equipment?
We utilise our equipment optimally. You are aware that this is the only airline in the history of this country that did more than two flights on their inaugural day. Others will just go to Abuja, land in Abuja and wait till evening, and come back from Abuja, and they do that for one week. Then you do four flights after two weeks. You go to Abuja in the morning, come back and you wait till evening you go again come back and you park your plane. Air Peace started with 14 flights on our inaugural day, in one day. 14 flights, five destinations, others open destinations in three, five months apart from Abuja-Lagos they open another one three months, four months. We started with five destinations in one day and we have added Asaba, Kebbi.
So, we optimally utilise our equipment and don’t forget most times we have an aircraft on standby. This is because we don’t want to disappoint people. One aircraft might go somewhere and the weather is bad, instead of the other people waiting, we deploy the one that is on standby. So, whenever you go to the airport you will see an Air Peace airplane parked, covered and waiting because we don’t want to disappoint the passengers. However, we utilise our planes optimally and the other thing militating against the correct or adequate optimal utilisation is the lack of night flying airports. We don’t have night flying airports in Nigeria we would have been flying all round the clock. The aircraft parked is a lot of cost on the airline but the Minister has promised that this year all airports in Nigeria will be all night flying airports and he is committed to doing that. The government has done a lot for aviation and I really commend them. And they are still doing more, so once they start that it would favour the airlines too. At the same time if security improves, people will take to flying at night, finish whatever they are doing and go to wherever they want to go at night. That will really help the airlines. As per the plans this year, we intend to expand our route network to other places. We also intend to start going to the West coast. And I assure you that with God on our side, it won’t be long before we go international.
http://www.thisdaylive.com/articles/onyeama-government-must-help-airlines-run-safe-operations/201649/
