Nigerian carriers in intensive care unit, need help-Experts
- 90% traffic carried by foreign airlines
Experts took a holistic look at Nigeria’s aviation and came to a conclusion that the country’s airlines need urgent rescue to stem the tide of collapse associated with many of them.
They admitted that virtually all the airlines are in proverbial Intensive Care Unit (ICU), maintaining that the Federal Government’s unfavourable policy of frittering away Bilateral Air Services Agreement (BASA) and designating foreign carriers on multiple designations in Nigeria have stunted the growth of the airlines.
The experts spoke at an aviation event with theme, “Boosting Aviation Investment Through Policy”, held in Lagos.
Setting the ball rolling, Chairman, African Business Aviation (AfBA), Mr. Nick Fadugba described as damaging to the country, a situation which over 90 per cent of international air traffic to and from Nigeria is carried by non-Nigerian airlines.
The former Secretary-General of African Airlines Association (AFRAA) hinted that the situation could lead to capital flight and the continued deterioration of the Nigerian aviation industry and the loss of skilled aviation employment opportunities.
He however threw his weight the Federal Government’s plan to launch a new national carrier with minority government shareholding – if it is done transparently and skilfully, stressing that there are many potential risks and success will take time.
To succeed, Fadugba stated that the proposed new national airline needs a sound business plan, strategic industry partners, adequate funding, an experienced management team, well-trained staff, a fleet of modern aircraft, a comprehensive route network, on-time performance and good customer service.
His words, “For many years I have firmly believed – and still do – that aviation can be a vital catalyst for Africa’s economic growth and social advancement. Africa needs a safe, reliable, efficient and profitable air transport industry that facilitates business, trade and tourism across the continent, and between Africa and the world”.
“Much has been achieved, but many challenges still remain. Aviation safety, security, training, regulatory oversight, infrastructure, liberalisation, modernisation, funding, efficiency, affordability and profitability all need to be improved significantly”, he added.
African Governments and regulators, he further stated need to provide an enabling environment that will attract investment, while African airlines, should work together through inter-lining, code-sharing, joint ventures and mergers and acquisitions so as to form stronger carriers that can compete effectively and can grow and prosper.
Similarly, Fadugba urged African states, including Nigeria to provide more support to the growth of the increasingly important African business and general aviation industry, which are tools for economic development.
He further disclosed that by 2030, the Federal Government of Nigeria would have adopted the business models of Singapore and Dubai, UAE, by seriously embracing aviation as a strategic tool for economic and social development.
“There will be zero import duties on aircraft, engines and spare parts. Value Added Tax (VAT), as promised, will have been removed. Bilateral Air Service Agreements (BASA) with non-African states will have been reviewed on the basis of reciprocity, as access to the Nigerian market has an economic value”.
Airlines:
He also stated that by 2030, Nigeria will have two airlines operating regular scheduled services on intercontinental, regional and domestic routes, noting that one will have a minority government stake and the other will be totally private sector-driven.
He equally predicted that each airline will have a fleet of 25 to 40 modern aircraft. One will be a member of a global airlines alliance.
“Four or five smaller carriers, each with five to 10 aircraft, will provide niche services, such as domestic routes, regional routes or cargo operations. One will become Africa’s established leading Hajj operator. The Government and AMCON will have, at last, taken the necessary tough steps to resolve the receivership impasse at Arik Air and Aerocontractors, so they are no longer in limbo”.
The sizeable combined fleets of Nigerian airlines, he said will have provided a ready market for the establishment of a viable aircraft maintenance, repair and overhaul (MRO) facility in Nigeria, a joint venture with an experienced foreign MRO.
President, Aviation Round Table (ART), Dr. Gabriel Olowo disclosed that in 2015, the aviation industry supported 254,500 jobs and contributed $940 million (N184.7 billion) to national GDP.
Olowo said of this sum, 49 per cent ($462 million or N90.8 billion) was a direct output of the aviation sector via airports, airlines and ground services) while 51 per cent constitutes indirect jobs through the supply chain).
Additional $464 million (N91.2 billion) he reiterated was derived from tourism, which raises the overall contribution to $1.4 billion (N275.9 billion), noting that In 2010, total Passengers traffic was 8.3m (4.2m domestic passengers and contributed 0.4 per cent to GDP.
