BY LOUIS IBA

MANAGING Director/CEO of Arik Air, Mr. Chris Ndulue, has attributed the declining fortunes of domestic airlines to the prevailing downturn in the economy. “The economic situation is affecting traffic seriously,” says Ndulue.

He lamented that the 2016 budget was yet to be signed into law or implemented, stressing that a lot of businesses are also affected hence people are not flying as much as they should do if everything was right on the economy.

Ndulue also bemoaned the scarcity of foreign exchange and aviation fuel (Jet A1) in recent months, saying the ugly trend had taken a huge toll on the fortunes of domestic carriers.

The Arik Air boss in this interview with the Daily Sun in Lagos spoke on the crisis between the airline and the Federal Airports Authority of Nigeria (FAAN), which led to a recent shutdown of the airline’s operation at the Lagos domestic airport by FAAN workers. EXCERPTS:

Assessment of industry

We expect a lot of improve­ment from the government in the aviation sector. You know very well that the present Minis­ter of State for Aviation, Senator Hadi Siriki, is someone from the industry. He is an aircraft Captain and he has also been in govern­ment for while. I knew him as a federal legislator, a Senator, and he was a member of the Senate Committee on Aviation while he was there at the National Assembly. Everyone in the in­dustry, therefore, expects that as Minister of State for Aviation, he comes in with a lot of experience and that there would be a lot of improvement in the industry. And we have already met with him. Now, some of the areas he told us he would be focusing on will be on the provision of secu­rity at the airports we have in the country as well as the safety and security of airlines and pas­sengers. He told us he wants to make sure that the airports we have in Nigeria are fully secured and which I think all of us under­stand is the most important thing to do at the moment. So that is what he said would be his focus or priority for now.

And we have to support him and the government. But we also must note that the administra­tion is just settling down. So in the next four years, I believe we should see lots of improvement on all other aspects of the indus­try.

Security

We fully know that we now live in a world where security threats to airports and airlines are in­creasing daily. In Arik, we take issues of safety and security as key in our operations. In the past five years, we have won awards that have to do with us being the most security conscious airline in Africa.

But even as the government is also taking steps to improve on security, as an airline we are also doing the same thing. Just about one month ago, we brought some South African companies into Nigeria as part of our security efforts. And they came in with some trained detective dogs. We contracted them to provide addi­tional checks and security for us. And those dogs can detect both bombs and narcotics. There are about six South Africans who are handling this and they are work­ing for now in Lagos and Abuja airports. So that is one of the measures we have taken in the last few months to boost security on our airlines and operations.

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Economic downturn

People usually ask me to comment on the impact of the current economy on airlines. Well, what I can only say is that the economic situation has af­fected traffic seriously. When there is economic downturn as we are currently witnessing in the country, because the budget didn’t come out and even now it has not been signed into law or implemented, a lot of activities are stalled. That is obvious. There is a lull. A lot of businesses are also affected. And so, people are not flying as much as they would do if everything was right and the economy was doing well. So I think it has affected traffic.

Forex

That is a big problem and everybody doing business in the country right now is affected. What everyone that is affected is doing is to try to manage the problem. And I tell you that the impact on the aviation industry is so much as we depend on a lot of imports. We import the aircraft, we import the aircraft parts, we import the service providers and we import other services. Basi­cally, from time to time, we have to change the naira to dollars and in our own case we have to pay our own aircraft maintenance service providers. We have noth­ing less than 42 engineers from Lufthansa and that is a lot of outflow of money on a monthly basis even though I also have to acknowledge that we earn a little dollar here and there. Arik does international operations but that is not enough to meet our dollar requirements and that has really posed a lot of problems for us. But the problem of forex is a chal­lenge for the whole country, not just the aviation industry. But we know that with time something will be done about it. I believe that with time the dollar will be much easier to get and that gov­ernment is fine-tuning the pro­cess of foreign exchange supply. The government has given the assurance that there will be no further devaluation of the naira, at least for now, and I think that is something to be happy about.

Fuel crisis

The problem of getting avia­tion fuel for airlines has been going on for a very long time in the country. It has even been worse for us, especially in our operations out of the Abuja air­port because all the fuel supply we get comes from Lagos. And there is no incentive to truck it that far from Lagos to Abuja. And so, if there is a little bit of scarcity of supply, it really affects our operations outside Lagos. What happens is that some use Plat pricing and the price of crude oil has been going up recently and when it goes up it also forces prices to go up for airlines. The government has been discussing with us on what can be done to solve this problem. There is no responsible government that will fold its arms and watch the problem of fuel scarcity ruin the industry. I believe they are work­ing on it and that the problem will go away one day. What we have been doing is just managing to cope with the problem. But it is impacting on our operations heavily. Sometimes there are delays of scheduled flights, some­times the fuel supply crisis has led to the cancellation of flights to those airports that we cannot fly into and land at nights be­cause of the absence of the requi­site instrument landing systems.

BASA treaties

I think the Bilateral Air Service Agreement (BASA) between Nigeria and some other coun­tries is something that should be reviewed from time to time. In most of the BASA agreements, Nigeria is not getting the full ben­efits of those deals. We are not able to respond and do as many frequencies as the other party is doing on those BASA terms. So if at a stage we are getting stronger and are getting more aircraft that can fly into some of those countries, then there is the need to review the BASAs from time to time. But I will say that until that time when we begin to take the initiative to say we need a review because we want more frequen­cies for our airlines, we will con­tinue to be the loser.

But then, it should also be not­ed that Arik Air and some other Nigerian airlines are doing a lot of frequencies in the West and Central African sub-continents. And this is because we are strong in the West and Central Africa and we have the strongest air­lines to play in these markets. But the problem is that when we go to Europe and America, we find it hard to reciprocate because we are not strong enough. Today, we have 21 frequencies to fly into the United Kingdom (UK) but of these it is only Arik Air that was doing just seven. Our mar­ket share on the Lagos-London route is now about 25 per cent. That is what I think and it is not a bad figure considering the air­lines that are plying that route. Then recently, another Nigerian airline, Medview, has joined on the Nigeria-UK frequency. But even at that, we are not yet doing the 21 frequencies as a country under that BASA terms. And it is situations like this that I said we should call for a review. The problem we need to solve is that if the UK or British carriers like BA and Virgin are coming into Nigeria and they can fly from Lagos and also from Abuja air­ports to London, then Nigerian carriers should also be made to fly from Abuja airport to London alongside the Lagos airport that we are currently flying from.

Why I said this is because we have to see how we can get more frequencies out of the 21. And the issue of landing slots and BASA shouldn’t arise. I think that is a gimmick that should not be al­lowed.