| Airports’ concession
without master-plan is a failure – Chris Aligbe,
CEO, Belujane Konzult
By UCHE USIM
Thursday, November
26, 2009
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•Chris
Aligbe
Photo : Sun News Publishing |
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Chris Aligbe, the Chief Executive Officer of Belujane Konzult
is one of those who support the idea of airports’ concession
as a way of resuscitating and planting the nation’s
ailing airports on success track.
While embracing concession, Chris proposes that a detailed
master plan must be in place for each airport even before
a concessionaire is chosen.
He said the master plan is what guards and guides the concession
package such that the milestones that need to be tracked while
the concession lasts are not boycotted.
He said part of the problem of the newly-built Murtala Muhammed
Airport Terminal 2 (MMA 2) is lack of a detailed master plan
such that no one knows what the terminal should look like
be the expiration of the concession tenure.
He also assessed the nation’s airports generally and
said that the level of decay in them remains a national shame.
In this interview, he bares his mind on several issues including
the airlines.
Excerpts.
How to buoy domestic operators
Government has a lot of ways it can assist domestic operators,
but that should be for those with genuine business plans.
They must demand the plan for the airlines. And then in addition
in demanding their plans, government should have their time
policy. What do you want this airline to do? The fact of the
matter is that in this country, you saw the lectures giving
by the Ethiopian, Nigeria need at least one if not two major
flag carriers. And so the government should not just wait
for them, if the government waits for them they will not emerge.
So government must take an affirmative action to get the local
airlines to emerge. So government must look at all the airlines
we have now, apart from the question of setting up a new one,
which is possible, but I don’t think we need it at this
point in time. What we need at this point in time is that
the government looks at the airlines in place and know the
one that can be used. And like I said, today there is only
one airline that has the infrastructure, the operational base
to operate very well.
And that is Nigerian Eagle Airlines, because it was the Virgin
Group that built it. They built that infrastructure, operational
base with commercial structure. And everything that an airline
needs, they put them in place. Although they put them in place
for their own purpose, but now when that is in place we can
use it to build up a major flag carrier. Arik is there, Arik
has the equipment but Arik is sitting on a void. It has no
airline structure on ground.
No operational structure, no commercial structure, no administrative
structure. Its approach to the airline business is not it.
And it is again, we can say look we have the equipment, lets
see how we can help you do this. You need to build this, that
and that. When you build this and that, and that, whatever
is your problem, then the government can come in to address
it. Again like I said, most of this airlines time has come,
other managers are in problem. Those who own the airlines
and are involved in the management are not being able to do
it.
They have caused the collapse of their airlines. Look at Okada,
Kabo, you can check the history. Like I said look at Bellview.
It is sad because Kayode Odukoya, the Managing Director gave
his life to aviation. He gave his life to the aviation industry.
And for an airline for such a man to go down, the heart of
every Nigeria who knows should bleed. And so he has to be
assisted and rescued. But the first thing to do is to tell
this people who own the airlines, who are managing it to please
quit the management of the airlines.
And then put a programme in place that those who know how
to manage airlines, manage it without the interference of
the ownership and will manage it has a business. That is a
major thing and that is why I said this problem does not exist
with Nigeria Eagle Airlines. But it exists with some other
airlines. Now, that is what we should look at apart from the
other things they recommended. But the government should take
a position on this issue. We want major flag carriers.
We must make major flag carriers emerge in the next two years
maximum. We should start building up now, even if government
has to input funds. They don’t have to put in money
directly, they can give a bank guarantee. They can give guarantee
for these airlines to get loans where loans are cheap oversees.
With government putting in a sovereign guarantee and say,
for four years, five years, this one airline is on, they sell
the shares off and then put the money back in government kitty.
That is what should be done. But before this happens, government
should set up a committee of those who knows not just the
owners of the airlines.
The owners of the airline will never tell the government the
truth about why they have their problems. They will talk about
the problem but not why they have the problems. They will
talk about debt, charges are high and everything but they
themselves are the problem, the management is the problem.
Virgin has repositioned itself in terms of management but
the albatross of virgin group is hanging heavily on their
neck. Even the problem they are having now were not created
by them, it was created by the Virgin group to sign a lease
agreement, paying exorbitant rate and sign it for five years,
that is a major problem.
This is a situation on this, they should be rescued but they
should not one prescription, it is not good for all of them.
And they must be based on government road map and the airlines’
road map. This government must have a road map on rescuing
the aviation industry on the airline sub sector. We must have
flag carriers in this country.
AFRAA’s call for airlines’ mergers
Well, it is what they have seen in Europe but we have talked
about it over and over, and it is not clicking. So what the
airlines will need to do is that, they have to be very firmly
operational before you can think of mergers; even interlining.
Many oversees airlines will run away from interlining with
our airlines because their operational standard is low. If
Virgin didn’t have all their problems, they will be
able to maintain that standard having been given a base.
At a time Aero maintained that standard and they were having
this kind of relationship even with BA. But once we start
declining in terms of our standards, we will not have this
interlining agreement, code share agreement because they don’t
want their passengers to be messed up. So the truth of it
is that mergers are not likely to come too soon. But if this
arrangement, interlining arrangement, code share arrangement,
gradually when confidence comes back the mergers can come,
that is the truth of it. Now because there is no strong airline
domestically, every weak airline believes he can make it.
But if there were two, three strong airlines domestically
that are almost threatening to wipe out the others, they will
find reason to say look we will merge. But because everybody
is weak, they think they can make it, they can out do the
other, and it is not possible. But until two, three, four
strong airlines emerge, then mergers will come and say look
the way we are, we need to do this or do that, then they will
merge by themselves.
Government buying into domestic airlines
No, I don’t believe that. What I believe is that the
only airline that government can buy into today is Nigerian
Eagle Airlines. Government should sit down with the Virgin
Group, with Richard Branson, evaluate what he brought in.
Richard Branson didn’t bring money into this country.
So the 49 per cent equity he is holding, how did he pay for
it?
What has he taken out of that airline since he came into it?
And if it is clear that he didn’t bring in anything,
government should move in to acquire that 49 per cent for
the purposes of using it to create one major flag carrier.
But that acquisition, it doesn’t need to put in money,
it puts a sovereign guarantee for four months. And when it
does that, it is to say today we want this, in the next four
or five years, these equities will be sold to Nigerians publicly
and government can hold only 10 per cent of such equity.
There is nothing wrong in government holding about 10 per
cent equity. That is what is being advised in many places
now globally. It has happened in Australia, it has happened
some other places. Hold 10 per cent equity as such that you
can begin to muscle the airline but because at one point in
time, the national strength can be brought to bear on challenges
the airline may face.
Infrastructure at the airports, what will you say about that?
It is quite sad that the shape our airports are in the today
is the way they were when they were built some 30 years ago
and some 20 years, 15, 25 years ago. It doesn’t happen
in other countries. Go to all other countries, you will find
out that they are all re-building, expanding. Some have built
new airports and left the old ones. That has not happened
in Nigeria, no expansion, nothing, really adding things and
choking the airport and making them look silly.
It is a national shame. So what should be done is that the
airports should be concessioned. I agree in concesssioning
in a way but before you concession there are so many things
to be done. You must have plan for each airport. There must
be master plans for each airport giving what you want it to
be in concessioning. You want to concession MMA for 20 years
or 30 years, you must have a master plan that by the 10th
year of this concession, this is what this airport should
be. By 20 years of this concession this is what we expect,
by 30 years this is what we expect you to handover.
This airport, if it is handling two million today on capacity
or three million, by 30 years it should have a capacity for
25 million. And so that must be part of the master plan. These
are some of the wrong things we have done. The question of
36 years for MM2 should not be an issue. 36 years is possible.
I have seen 50, 40 years in concessioning. But there is a
master plan for it so that you know where you are working
to. The 36 years, if it is true, the argument it was not giving
or not.
I don’t want to get into that argument because of lack
of transparency. But even if there was transparency, such
number of years can be given. But before it is given, you
must have a master plan. 36 years on MMA2, that MMA2 is built
for 10 years. It can cope with traffic up to 10 years from
now not more than that. By that time it will be bursting,
it doesn’t have capacity to handle more than that. And
there is no room for expansion. You can look at right, look
at left, so that airport is imperilled by the fact that there
was no master plan.
There was no conception about what you are looking for. So
if you have 36 years, ask yourself will this airport survive
more than 10 years in terms of providing the services to passengers?
So there are two things, it is not just the number of years,
it is whether the airport can cope with that. It was not done
with a master plan. So no concession should be done in this
country without an approved master plan that will say, by
the end of this concession, this is what it should look like.
If you have a master plan that can be monitored, by 10 years
of this, the true picture will be this. By 20 years of this,
the true picture will be this. By 30 years when this concession
end, this is what we will find in this airport. If no such
a thing exists, concessioning will be useless for us in this
country because after concessioning within the next four,
five years we will be facing the same problem. And the concessionaire
will be sorry and say that was not what we agreed.
So government must have a master plan, the concessionaire
should bring his master plan that will cope with the number
of years. And government will say, okay if you have this,
this is what it should be. So I believe in concessioning,
that is the only way we can change the faces of our airports
and become part of the global aviation industry. Today we
are not part of the global aviation industry in terms of airport
infrastructure and it is a national shame.
Recent near air miss
I don’t know about near air misses recently. It could
happen once or twice. It is not only in our country, so the
rate of such thing is not that high as to become something
that has become alarming. I think and I still say NCAA has
done extremely well. And I think NAMA is being quickly equipped
to be able to cope. If TRACON comes in place, we won’t
have such problems.
It will now become that money should be deployed for manpower
training and development. There should be enough money to
train not just that we have put all the equipment. In fact
the funds for training, major allocation should be made for
training of manpower so that we have the appropriate manpower
to man what will be put in place. Otherwise, if you put them
in place and they don’t have proper continuous training,
you will still have problems. So they should match the equipment
with enough funds, enough allocation for training. I think
that the leadership in NAMA today is a leadership that all
of us know.
We know the man, know his onus and nobody can say anything
about Auyo in terms of that. And that is why some of us who
know the industry are confident about the man managing NAMA
today. They should put the TRANCON in place as fast as possible.
They equip the staff through training and further manpower
development. One might ask over and over again, what is happening
about the airfield lighting on domestic runway? It is a major
problem. Again we should consider it as a national shame at
every level that the runway has been done, it is putting the
lighting there that is the problem.
In many of the airports you have no lighting. So airports
that are supposed to be operating 24 hours are not doing that.
And then for the international runway, Lagos domestic will
be shut at night. And what has happened is that it has been
so much cost for airlines. Sometimes an aircraft will hover
for about 40 minutes before getting a slot to land. Fuel burn
for 40 minutes is almost flying from Abuja to Lagos. And that
is part of the cost of the airline. One immediate thing that
will be done in Lagos to take out the shame is that the Presidency
can issue an instruction.
If it gives the Ministry of Aviation and all in charge, 30
days or two months maximum, those lighting on the runway will
be there. So we shouldn’t wait for a major accident
to happen. I hear Emirate waited for 40 minutes at the threshold
to takeoff. It waited 40 minutes, waiting for all these
times at night. Later, it called and said sorry I am coming
back to base because I am running out of hours. As the pilot
said he is running out of hours and he cannot fly as per regulation
that he was coming back to base after waiting for 40 minutes
before take off because the airspace was congested with international
and domestic flights since they are using a single runway.
It will not happen in other countries.
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