Chinelo Obogo, [email protected]
The International Air Transport Association (IATA) has predicted that the global airline industry would produce a net profit of $29.3 billion this year but that African carriers would continue to suffer structural problems of high costs— owing largely to government’s taxes and fees–and low load factors.
Economic growth in the region has been relatively good and is expected to rise in 2020, but markets are extremely fragmented and inefficiently served in the absence of a Single African Air Transport Market. As a result, they are projected to show a loss of $200 million, similar to 2019. The world aviation body said in 2018 that African carriers will report a net loss of $300 million in 2019.
To address the severe structural deficit, Nigerian aviation professionals have given themselves the onerous task of projecting the nation’s aviation sector expectations into 2025 and mapping out appropriate implementation strategies to avoid according to them, “A total surrender of the nation’s tangible and intangible assets to foreigners.”
These concerns were raised by stakeholders at the 2019 4th Quarter Business Breakfast Meeting hosted by the Nigeria’s foremost aviation non-governmental organisation, Aviation Safety Round Table Initiative (ASRTI) with the theme, ‘Nigerian Aviation Beyond 2025’. The demise of numerous private airlines and the failure of government to effectively manage airlines in the past formed the basis of the roundtable meeting which held recently in Lagos. The body advocated less of government intervention and involvement in the business and a total relinquishment of control to a business oriented visionary private sector.
Industry stakeholders agreed that the government should provide an enabling environment for aviation businesses to grow in the interest of the future. The body said that aviation professionals should define where Nigeria’s aviation sector is expected to be by 2025 and plan for it. It said that if this is not done, the younger generation who lack the nationalistic and patriotic attitude that some existing professionals have, will do just anything, including surrendering the nation’s tangible and intangible assets to foreigners, provided they get desired air passenger comfort, experience and safety.
The ARTI President, Dr. Gabriel Olowo, expressed concern over government’s intervention in aviation and airlines when the country’s capital expenditure stands at 20 per cent. He said: “I am worried by intervention by government in the budget for 2020. Eighty per cent is for the recurrent, while 20 per cent is for capital expenditure, meaning that we have little or nothing for capital development. We have a deficit budget, meaning that we have element of debt; so, we are not able to provide what we need for road and security.
“Then, why bother on intervention when private sector investors are eager to help us out? Should government continue to borrow where private investors can help? We have government intervention in our airport. Also, we have government intervention in our airlines that are capital intensive, that is what worries me,” he said.
“The present is a product of the past and the future will come from the present,” stated the Chief Executive Officer of Belujane Konzult Limited, Mr. Chris Aligbe.
Former Managing Director of defunct Nigeria Airways Limited, Mr. Yomi Jones stressed the need to review the compensation package for civil servants. He said civil servants have control of huge funds but they receive peanuts as salaries and that it is this factor that has made them more committed to contracts inflation, unnecessary allowances-generating activities, and other personal interest endeavours, which amount to corruption and corrupt tendencies against national interest and the future.
Among other issues discussed, the body of professionals wants the Nigerian Civil Aviation Authority (NCAA) to encourage domestic airlines to restructure their business models towards a better passenger boarding experience and comfort to enhance business competitiveness beyond 2025. It said the regulatory agency should review the conditions of establishing airlines that will compete effectively by 2025 and advised existing domestic airlines to form alliances to develop commercial comparative advantage principles to enhance their survival beyond 2025.
The organisation also advised the Minister of Aviation, Hadi Sirika to update the nation’s aviation policies and implementation strategies to align with current global aviation realities by the decentralisation, digitalisation and devolution of the industry’s operations. It wants the government to continually ensure the provision of an enabling environment for the growth of aviation businesses to reduce incidences of the loss of Nigerian aviation professionals to other climes.
The body wants the nation’s airports to be upgraded and positioned to attract businesses that will take the airports beyond being mere ports to centres of tourism and commerce, and widen airports revenue sources beyond airport fees, charges and taxes. To achieve this, the meeting advocated the concession of the airports.
It also said that there is the need to give more attention to the downstream sector of the nation’s aviation industry for the sake of the future, while also advocating the review of the compensation package for civil servants.
Director-General, Consumer Protection Council (CPC), Mr. Babatunde Irukera called for change in the airlines business and airports experience in Nigeria beyond 2025. He said that the Federal Airports Authority (FAAN) management must make airport places where people want to go and be before passengers took their flights. He said with the record of delay in the airports across the country, Nigeria still record one of the highest numbers of no show of people arriving for their flights.
According to him, even, the premium class, which is the VIP sittings, is not comfortable enough to the general sitting experience in other country’s airports and now imagine the general passengers. Irukera said all the passenger want to do is to arrive at the airport and be able to get through the security checkpoints and then proceed to boarding.
He called for speedy transformation of the nation’s aviation to stimulate business, saying there is a huge challenge to grow domestic airlines in the country.
Irukera said: “For profitability, airline business modules must change; secondly, airports experience must change beyond 2025. This is because airports all over the world today have now become a comfort zone and not a travel port. There are far more commercial managers than commercial attenders in JFK DBX; then, we have security and customs put together. There are more shops at these airports than we have offices and the amount of retail businesses that are going on at these airports are in excess of what aviation gets.”