Q1 REVIEW: Cautious optimism towards robust growth

The aviation industry in the first quarter of 2024 can be described as mixed. The sector in Nigeria is grappling with so many challenges but there is hope that the managers of the sector are poised to tackle the myriad of issues confronting it, writes, WOLE SHADARE

Age long decay

Many of the country’s aviation woes have been there for decades with various governments that came after doing their best but how best had their best been, just as there may be a flicker of hope that if all the problems are not resolved, let it been seen that many of them are resolved.

The Minister of Aviation and Aerospace Development, Mr. Festus Keyamo may have hit the ground running albeit slowly. He was confronted with many challenges in the sector when he was appointed late last year. He began by highlighting the Ministry’s new vision to strengthen the aviation sector.

Key indicators

The five adopted five Key Performance Indicators (KPIs), include strict compliance with safety regulations within the sector; support for the growth and sustenance of local operators; improvement of infrastructure within the sector; human capital development and optimisation of revenue generation within the sector.

These are the five parameters Keyamo would be assessed when his time is up as a Minister. He seems to be passionate about achieving results by drumming it into the ears of the Chief Executive Officers of the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA), the Nigerian Civil Aviation Authority (NCAA), the Nigerian Meteorological Agency (NIMET) and others at their induction ceremony in January.

FAAN relocation uproar

The decision to relocate FAAN to Lagos did not go without protest from some groups. But Keyamo and the Managing Director of FAAN, Mrs. Olubunmi Kuku robustly defended the position on operational efficiency and to cut waste of public funds.

Nigeria is greatly behind in the area of aviation and airspace infrastructure. Before the appointment of the Minister, airspace communication equipment was grossly lacking and still lacking, airport infrastructure is also very inadequate to which the airlines have complained bitterly.

Infrastructure upgrade

The Managing Director of NAMA, Umar Ahmed Farouk had vowed with the help of the government tackle communication hiccups, train workers and reposition the agency to meet global standards.

To tackle the problem, the Federal Government, proposed to spend the sum of N23,085,000,000 on rehabilitation and repairs of airport/aerodromes and air navigational equipment in the 2024 fiscal year.

Specifically, N20,985,000,000 was budgeted for just the rehabilitation and repairs of airport/aerodromes, while 2,100,000,000 is for the rehabilitation of air navigational equipment.

Profitability

The rehabilitation of these facilities would in no small measures enhance air safety and improve profitability and efficiency for the carriers that have lamented the dire situation they are exposed to including the difficulty in accessing Forex and the depreciation of the Naira that led to the high cost of operations with the carriers passing the costs to travellers.

However, things are said to be improving as the carriers no longer complain of the difficulty in accessing Forex from the official market as they can source their Forex needs at the parallel market which gap with the official is almost nonexistent with the Importer $ Exporter Window.

The stability of Naira and its appreciation against the US dollar is heartwarming for the operators despite other challenges they face.

The I$E Forex window and the release of foreign airlines’ trapped fund backlog by the Central Bank of Nigeria (CBN) has restored the country’s image.

CBN releases carriers’ money

The action by the CBN Governor, Yemi Cardoso and his team almost instantly forced the carriers to open their lower ticket inventories which invariably forced down fares after so much pressure from the NCAA Acting DG, Capt. Chris Najomo and the National Association of Nigeria Travel Agents (NANTA).

At the embarrassing height of airlines trapped funds in Nigeria, fares went to as high as N3 million for economic class tickets from Lagos-London for instance. Many who could not afford such an amount crossed the borders to Accra, Lome, and Cotonou to fly as low as N800,000 and N1 million.

Nigerian travellers are excited by the new development as they can now travel to Europe at just $600 and to the United States for about $800. This was unthinkable a few months ago.

Air Peace amid London battle

The fierce competition on the London route with the entry of Air Peace has further brought exciting times to Nigerian travellers as carriers are daily crashing fares on the routes and passengers enjoying it while it lasts as one of the three carriers now operating direct flights to London may be squeezed out with time going by brutal completion on that route.

Air Peace, Nigeria’s flag carrier airline last week forayed into London amid so much excitement. The Chairman of the airline, Mr. Allen Onyema has been in the news promoting his airline, promising to give Nigerians value for their money while also urging his countrymen to patronize and adopt it as their own.

Experts’ views

Reactions have been mixed but Air Peace has all it takes to succeed on the route despite noticeable hiccups and aeropolitics that may come to play from the London end.

Aviation lawyer, Mr. Pekun Sowole said in terms of policy, ‘Nothing has changed. It has been a flip-flop from FAAN aside the NCAA is looking into some regulatory review. Nothing has happened at the airport in terms of facilities for the physically challenged. The one they did the other day was because of the personality involved”.

“As for Air Peace to London, it won’t make an impact until we have another carrier or more carriers from Nigeria. I learnt Omni-Blu is coming on that route too which is going to be a plus for the industry.”

An airline operator who pleaded anonymity admitted that things are moving in the right direction but described the progressive as slow. He however lauded some positive steps in the sector.

 

 

Last line

Some policy direction and statements have elicited hopes that the sector could move in the right direction if the government puts a lot of commitment to some of the things it planned to achieve

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