Special Forex window I’lll save airlines from collapse-United Nigeria Airline chairman

His foray into the aviation business did not happen by chance. Several years ago, he tested the murky waters of aviation when the Nigeria Air Force engaged him in international peace operations. The process to acquire B737 aircraft had been completed. Suddenly the process was truncated just before the deal was coming to fruition. Chief Obiora Okonkwo is the man behind start-up United Nigeria Airlines. In this interview with WOLE SHADARE, speaks on how the country’s aviation industry and indeed the airlines can survive the multiplicity of challenges that threaten their existence among other issues. Excerpts

What propelled you into setting up United Nigeria Airlines at a time the sector is grappling with a lot of challenges?

We had applied for certifications from the Nigerian Civil Aviation Authority (NCAA) to be an airline. We scaled all the stringent rules. We came with great vision. We pay tribute to those that have come before us. I am not a person that would celebrate the failure of others. We are in this industry to play our role as operator to offer air transport services.

You must be congratulated for the bold initiative to set up an airline in COVID-19 era. What strategies are you applying to ensure you remain long in this business?

For the choice of aircraft, we had a thorough, due diligence before we embarked on Embraer, a fuel saving capacity is an advantage. We are actually thinking that as a new airline, it might take us a whole while to fill up the aircraft and able to manage and take full advantage. To our surprise and it would surprise you to know that we got our Air Operator Certificate (AOC) and all the certified true copies of a Thursday and we fixed immediately our inaugural flight the next day at 6.45 am. Within 12 hours of opening our portal, we had full passenger load and I can tell you that it had been so good. The opportunity is huge, the market is large. I think we are probably more blessed than others .There stories might be a little different. It took a while for some people in the industry to get along. A friend of mine of blessed memory that I have to appreciate specially, Chief Victor Ikwuemesi,  Chairman of Sosoliso. He was a great inspirator to me even when I was not sure of where to go volunteered himself, supported us and the man is late. He told me his experience that his first flight, he had four passengers and on return he had two passengers. He told me to be prepared for the worst. We had full load on the inaugural flight. I wish he was alive to be on our inaugural flight. Opportunities are already being created. For us to fly today, it means we have employed a whole lot of people. Some of them 40 to 60 per cent are having their first experience in aviation and you in aviation, there must be training, there are standards they have to meet. These numbers are those that have benefitted in the opportunities we have created. More people are in the pipeline as we are expanding our routes from our operational base and that will go on and on. The more aircraft we have, the more people that will be employed

Is this your first foray into aviation business?

Some years ago, Nigeria Air Force approached me during peace keeping era. We did our negotiation, secured a B737 aircraft. We were going through the process when the Head of Nigeria Air Force was removed from office. Inconsistency in policy is a big issue in Nigeria. His removal led to the death of that dream. We did everything, secured an aircraft but the dream never materialized.

Scarcity of foreign exchange is a huge issue in aviation. Airlines are complaining about the threat to their operations. Are you equally worried?

Foreign exchange is a big problem. If you look at the rules and regulations of Central Bank of Nigeria (CBN) today is that they go to official open bidding market a bi-weekly thing. That means that if you have to approach your Bank, if they did bid for you this week, if you don’t get it, you have to wait for the next two weeks . As at last two weeks, our Banks according to them they have not gotten even $1 allocation from that bidding process since February this year. You can imagine if you rely on that to make things happen, you will just not fly. It is a big stress in the industry. I advocate a special window for the aviation industry and this window will keep the airlines and industry alive. I also think that the support system beyond that window is required. Having COVID-19 in this era has never been an easy thing to every industry. Similar businesses overseas have been duly supported by their countries with different policies. I know there were good intentions and policies for this. I think it might never be late to actualize these things. A lot of operators would need it to be stronger on their feet. This is a service industry and in service, you obviously think of your clients before you think of revenue. A little support from government will help the operators to provide services to the citizens. Air transport helps economic growth. It is one of the critical factors and a matter of national security. It is not something that should be left in the hands of the operators.

You airline was few weeks ago allegedly involved in the practice flight delay that seems to be taking the joy out of air travel. Are you not bothered about the phenomenon of delay to passengers considering that you are a start-up? Most time flight officials that should explain this to passengers run away.

On the issue of delay, you are right. That is why I solicit with the media team in the aviation industry. You can help the sector by educating the passengers. One expects that when there is weather problem in Owerri or Asaba, if that weather is announced, we expect that there should be an information officially not only from NIMET but also from journalists that there would be delayed flight schedule so that any passenger going to the airport should know that this is for the reason of the effect of bad weather. This enlightenment is very important. The reason why airline officials run away is because they don’t know how to tell the passengers that delays are caused by bad weather and they can’t land. You will be shocked that the passenger will be asking why can’t we land. He tells you other aircraft are landing. When that person doesn’t understand it, the industry needs to come together to know how to address the matter by enlightening and educating passengers. It would help to reduce the tension that is being experienced. If you are about to take-off and you have safety as your watchword and there is a snag in the aircraft, you must have to wait to find out what the reason is. Some people don’t understand. They just want you to fly. What about their safety? The truth of the matter is having being close to the industry, there is no operator that wants to knowingly be part of a problem and allows his aircraft to be on ground. He is not happy that his aircraft are out of schedule. Most of these things are usually beyond the control of the operators but obviously, some reasons might be as a result of poor management. You people would have to find a way to come together to educate passengers especially when they come up with those damaging faults of airlines. The passengers are not enlightened on the challenges of many of the airlines that are not caused by them. At times, you want to fly but you are ramped by NCAA inspectors. They have to do their jobs and they must have to wait. That is a delay for the man who is taking off and the passenger who has to travel. Again, the crew may not envisage it would be delayed. Flight delays are caused by so many factors. It could even be caused by non availability of fuel. Aviation fuel is now becoming more expensive. Sometimes, they are not even available in some airports and you know there are weight issues because you have minimum take-off weight and minimum landing weight. So, if you are going from Lagos to Asaba and all of a sudden, they don’t have fuel the next day and you have scheduled your flight, you will be forced to calculate you’re the weight of the luggage. You have to start negotiating.

There has been defeaning call for airlines in Nigeria to merge or form an alliance like it is done in advanced countries. Nigerian carriers are small, weak and fragmented to stand alone. Do you support the idea that could make the carriers stronger and healthier?

I am a strong advocate of cooperation in the industry. The market is huge. There should be a synergy between the operators. In a short time, there could even be a possibility of mergers; operators can merge to become stronger and bigger airline and use common facilities for themselves because the resultant effect is that if you have one or two aircraft and you have to provide yourself certain equipment for maintenance, it reduces cost. You are spending so much on maintenance but if you pool resources and equipment together, the industry has a room for Memorandum of Understanding. The MoU enables operators to exchange tools. I think it is a good way to reduce certain costs and even exchange of spare parts. You might have a spare part lying down in you store that you don’t need urgently and you co-operator needed it urgently to fly before his own arrives few days. Exchanging it, borrowing and returning it is good. We are encouraging it. We are open to it to maintain such relationship and we have signed such MoU with some operators. There is no need for anybody to be envious of each other. The market is huge;  co-operation will be mutually beneficial to all those who are involved in it.

There had been a back and forth argument about waiver that was granted to airlines by the Federal Government. Nigeria Customs are said to be in the way of implementation. Where do airlines go from here?

There is a waiver regime that exists. We have also benefitted from that waiver especially the waiver tariff. I know that it exists but cumbersome in nature to assess. We are still battling with Nigeria Customs for airlines to benefit in the spare part area because for every spare part you have to go back to get another clearance. On a general note, the waiver comes from the Ministry of Finance. You have it but there should be integration with the Customs. When there is a misinterpretation of what it should be and what it ought to be, it is very frustrating for the operators. The policy is very good. It is healthy for the industry because if anything to the contrary is done, it will ground this industry. Imagine you paying 10 to 20 per cent duty on aircraft imported; I would rather prefer to sell aircraft than operating an airline. Accessing it seamlessly will only justify the good intentions of the government to grant such waivers. All the relevant government agencies responsible for this should look into that, synchronise and synergise so that the implementing organ, in this case Customs to be very lenient  and have all the information they need to actualize this waiver for those who have merited it.

What are the other challenges faced by airlines?

If you look at the cost of operations in this industry, I might say that there might be no so many amount paid for any ticket that would be considered too much. Ticket pricing could be as a result of buying at peak time. When that happens, it surely could be as a result of demand. At off peak, if you go back to the airline you might find the ticket bought at a lower rate. Some seasons, when airlines have to fly full and then come back empty, you have to find a way to cover the cost of empty flights. So, people should really understand that operating airline takes a lot of things. Please, when this comes, you have to understand it is for the survival of the business. Aviation fuel price is of great concern to everyone. We started operations at N160 per liter and it is N270 per liter. We do know that the cost component of aviation is about 30 to 40 per cent and when you move from N160 to N270 in a space of two months, then, one ordinarily should expect that minimum ticket sale will increase by 50 per cent especially when the cost component is about 30 to 40 per cent. It is a great thing of concern. I don’t know what has led to that but we know that a whole lot of things are increasing in Nigeria. As a result, certain costs would have to be adjusted as well. The only way you take it back is to increase the price of tickets or cargo. You can’t sell your aircraft back to make money. You have to make the aircraft serviceable. The staff would not want to hear that you are cutting their salaries because of high cost of fuel and other component and that you are trying to reduce their salaries. People can book their tickets in advance. It is cheaper and time saving. If you go at peak time, you have to pay maximum cost not only in aviation but in the hospitality business. It is my wish that all the excessive costs, one way or the other, there are certain interventions or policies that will reduce them so that the service would be available to a whole lot of people who might need it because there are too much risks now travelling by road.

Okonkwo

Simulator training

I hope and I have appealed to the NCAA as we have discussed it in many fora. If it had been possible during this COVID-19 pandemic challenge to extend certain proficiencies on the cockpit crew, captains, I request and appeal to the agency to extend the validity of the proficiency of simulator to 12 months. Since COVID-19, because of the challenges, NCAA in reacting to the international aviation practice has been very considerate and reasonable to do certain minimal checks and extend the proficiency of the captains. Let it be permanent. 12 months of proficiency is still ok and it is also a practice in some parts of the world. By doing that, they will also help to reduce the stress of the captains that will be travelling out now and then because of operations. Sometimes, you don’t fly because they are out of proficiency.

Wole Shadare