Tough year for aviation, cautious optimism for 2024

The year 2023 was tough for the aviation industry in Nigeria. Despite this, the sector still recorded some positives while 2024 could determine whether the sector would get out of the doldrums is a matter for both the policymakers and the players to reposition a sector that urgently needs a rescue, writes, WOLE SHADARE

Troubled year

The year 2023 came with a lot of troubles for the airlines and they would likely encounter more turbulence in 2023 occasioned by acute foreign exchange except the policymakers design a very robust framework or window where the carriers can access Forex. The pain of the carriers won’t ease off if interest rates from commercial Banks still oscillate between 20 and 30 percent interest rate.

IATA’s Regional Vice President Africa & Middle East, Kamil Al-Awadhi at a media presentation with African journalists at the IATA Global Media Day in Geneva, Switzerland on December 6, 2023, said that 25% interest on loans which it tagged ‘ridiculous’, high airport taxes and insurance premiums which it said is six times more than anywhere in the world would do incalculable damage to aviation in Nigeria.

He bemoaned the ranking of two Nigerian airports emerging as the most expensive in the world including jet fuel which is considered costly and higher than elsewhere in the world, stressing that the country’s carriers are set up to fail because of the huge challenges they face from the outset because of the many challenges stacked again.

It does not look for the airlines in the New Year because many of the problems they encountered last year would remain until conscious efforts are made to tackle them. Two of the carriers are on the verge of collapse except it are seeking urgent financial assistance to wriggle out of the tough situation.

Nigeria Air saga

The Nigeria Air saga took a long time before it finally came to an end in May last year when the Senate described the entire project as a scam which the former Minister of Aviation and Aerospace Development, Hadi Sirika disputed citing the painstaking process of choosing Africa’s leading airline as a core investor in the entire project.

Some members of Airline Operators of Nigeria (AON) have sued the Federal Government and the promoters of the carriers because they feared that Nigeria Air’s success would put them in a very difficult situation because of the lack of will to compete with Ethiopian Airlines-backed airline because of its wide route network.

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The operators had accused Sirika of giving a tax holiday to the planned national carrier which the ex-Minister said was just an imagination in the head of whoever was peddling the rumour, saying the Outline Business Case (OBC) for the carrier does not have a tax holiday for the proposed carrier.

Keyamo had called for the suspension of the carrier, saying the next direction for the new airline would be made known after he met with President Bola Tinubu on the matter. There are indications that the country would float the carrier but there may be a total review of the entire project to meet the yearning of millions of Nigerians.

Weak aviation regulatory body

The aviation regulatory body has never been as weak as it is today. The Nigeria Civil Aviation Authority (NCAA) processes are becoming a huge albatross for the carriers. Not a few believe that the processes should be cut or reduced without compromising safety.

The Chief Executive Officer of Aero Contractors, Captain Ado Sanusi attributed the ineffective regulatory framework as a major setback for the country’s aviation industry in 2023.

According to him, the series of airplane incidents recorded in 2023 were caused by the inefficient regulatory framework of appropriate government agencies.

He also noted that the implementation of the Nigeria Civil Aviation Regulations 2023 (Nig. CARs 2023) without requisite infrastructure was a significant challenge to the country’s aviation sector in the period under review.

Sanusi, the former CEO of Nigerian Airspace Management Agency, NAMA, added that persistent foreign exchange scarcity and multiple taxation are broader challenges Nigeria’s aviation sector grapples with.

He urged the government to address these challenges to save the sector from collapsing in 2024.

“Looking at the year 2023, what comes to mind is the ineffectiveness of regulators in the aviation sector, which caused a lot of challenges in the year under review. The ineffectiveness and reactive nature of regulators have resulted in a series of incidents in the country’s industry because operators feel that regulators are ineffective.

“Also, the implementation of the Nig. CARs 2023 created a problem because I don’t think they have thought through the process, which says that operators must have at least six aeroplanes before kick-starting operations. Meanwhile, the infrastructure to support the regulation is not put in place.

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“In a bigger picture, the country’s economy negatively affects the sector. The dollar, the import of JetAI, and many other things affected the aviation sector. Some airlines were forced to cease operations, and many more may collapse because of the economic hardship, foreign exchange scarcity, and taxation that have not been addressed,” he said.

NCAA

Matters got to a head when passengers who attended the ongoing Calabar Carnival were currently stranded at Calabar as Air Peace cancelled a flight scheduled to depart Calabar to Lagos on  December 29th, 2023.

In a message by the airline to affected passengers, it stated, “Dear passengers your flight P47183 from Calabar to Lagos which was scheduled to depart at 17:40 on 29/12/2023 has now been re-accommodated to P47183 from Calabar to Lagos at 17:40 on 30/12/2023 due to unscheduled maintenance. We apologize for the inconvenience to your travel plan.”

In another message, the airline again announced that it has rescheduled the flight from Calabar to Lagos from 30th to 31st of December. Its message to passengers reads, “Dear passengers your flight P47183 from Calabar to Lagos which was scheduled to depart at 17:40 on 30/12/2023 has now been re-accommodated to P47183 from Calabar to Lagos at 17:40 on 31/12/2023 due to unscheduled maintenance. We apologize for the inconvenience to your travel plan.”

Not a few expressed concern over the behavior of the airline, alluding to the lack of capacity by many of the carriers, particularly Air Peace which is adjudged to be the country’s biggest airline.

Experts’ views

 Capt. Ado Sanusi

Chief Executive Officer of West Link Airlines, Capt. Ibrahim Msheilla said, “If I was the Director-General of NCAA, nobody would do this nonsense. Like Air Peace, you are going to send a plane that has finished its duty. All these delays that are not because of weather or VIP movement are nonsense. People should be patient. The airlines are also losing money and that is where the regulator comes in. Corruption in the aviation system is so much. When I was at Albarka, if we had a flight to Yola, for example, I always kept one plane with two flights a day. We have mediocre running everything from airlines to CAA; they don’t know what they are doing”.

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The Year 2023 was one people would like to forget in a hurry because of the way and manner airlines maltreated travelers leading to long hours of flight delays and cancellations which in the real sense took the joy out of air travel. Most times, these delays that eventually lead to flight cancellations stretch to more than six, seven hours or more without proper communication with their passengers.

It is a malaise that has become part of airline operations in Nigeria and one that the carriers are becoming comfortable with because of weak regulation to stem the tide.

The Minister of Aviation and Aerospace Development, Mr. Festus Keyamo has raised the alarm over the inhuman behavior of many of the airlines towards their passengers. Many of these delays and cancellations are not weather, VIP movement-related or induced. They are occasioned by a lack of capacity by some of the carriers and other in-house operational reasons.

The Minister vowed that through the NCAA, airlines found to be engaging in incessant flight delays and cancellations get their names published in the media starting from the second week in January 2024. It remains to be seen if Keyamo through the NCAA would mark his words with action and not be hoodwinked by the carriers.

Festus Keyamo (SAN)

Last line

The New Year looks interesting and very tricky for investors who are ready to take the risks to put their money where their mouth is. It is also a year that many people look up to the Federal Government and the Minister of Aviation to live up to their promise of delivering key projects that would leave indelible marks on the aviation sector. Overall, the sector looks like it is going to be the same as in 2023 with a Moses that will take the aviation industry to the ‘Promised Land’.

 

Wole Shadare