Worried by the poor health of the local airline industry which makes Nigeria incapable of taking full advantage of the Africa Open Skies Agreement, the Aviation Round Table (ART) has stepped in to offer professional solutions which if implemented in 2018 would resolve the various challenges bedeviling the industry.
ART in a statement by its spokesman, Mr. Olumide Ohunayo, decried the high mortality rate among Nigerian airlines estimated to have been folding up after five years of inauguration.
The low capital base of most Nigerian airlines has remained a constant source of worry to most stakeholders. It had robbed operators of the financial capabilities of acquiring the right number of aircraft to operate local routes and also reciprocate existing Bilateral Air Service Agreements (BASA) between Nigeria and other countries. The ART is therefore calling on the Federal Government to recapitalise the industry in 2018.
“The Nigerian experience has witnessed early death of airlines within a lifespan of five years with attendant negative consequences,” Ohunayo said.
“Jointness and symbiotic relationship is a prominent feature globally acclaimed in the aviation industry. In order to arrest this unenviable cycle of failure, we believe that a recapitalisation of airlines through the instrumentality of mergers, alliances.
And participants in the industry would be required to be quoted on the Stock Exchange,” Ohunayo added. The ART said the recapitalisation and listing of local airlines on the Stock Exchange would widen the public shareholding base of the airlines and strenghten good corporate governance practices among operators.
The ART also said as incentives to the airline operators, the government should effect a downward review of the various taxes and charges in the industry.
The ART said it is a globally known fact that governments deliberately create favourable environment for their airlines to thrive. One of the reasons cited for the poor performance of local airlines is the high cost of foreign exchange required to purchase aircraft and also maintain them abroad.
“Considering the Nigerian environment, we advise the creation of a differential pricing regime for aviation related foreign exchange transactions,” the ART suggested.
“Consequent upon the inability of the Federal Government to successfully prosecute the National Hangar to fruition, the Federal Government should create an enabling environment for the bold initiative by Akwa Ibom State Government Maintenance Repair Overhaul (MRO) facility in Uyo to thrive and serve as a model for MRO development in Nigeria,” it added.
BASA/Open Skies Agreement.
The ART noted with dismay the inability of Nigerian airline operators to utilise maximally the various Bilateral Air Service Agreements (BASAs) and other multilateral agreements like the African Open Skies deal. “Nigerian airlines cannot reciprocate these agreements due to the prevailing inclement industrial environment and there is need to review and possibly re-negotiate the various international air service agreements with a view to obtaining terms favourable to Nigeria’s aviation industry,” it stated.
Recognising the fact that the Civil Aviation Authority in any modern state is the arrow head for the observance, enforcement and implementation of internationally agreed standard recommended practices, the ART said the Nigerian Civil Aviation Authority (NCAA) autonomy cannot be compromised in the interest of aviation security and safety.
“All extraneous interference inhibiting the NCAA effectiveness should be removed to facilitate its regulation and supervision of the industry in the areas of aviation security programme, airport periodic maintenance, airlines economic audit, and operational safety issues. The NCAA should be strengthened to continuously enforce the national aviation security programme,” the ART concluded.