By Jeffrey Utapia
Nigerian aviation industry is in dire straits. A critical sector strategic to the nation’s economy has never been in such a protracted strain for this long. Like a ship on a voyage already struggling to survive internal challenges to avoid shipwreck, it got pummeled by the virulent storm of COVID-19 in 2020.
The aviation sector, globally, was the worst hit industry by the pandemic. While other countries gave out bailout funds in billions of dollars to their indigenous airlines, to cushion the adverse effects of the pandemic and to stage a comeback, Nigeria’s government managed to give a paltry of N4 billion to the entire aviation sector.
The unit cost of one aircraft engine is more than N4 billion. So, the meager sum was a drop of water in a desert yearning for rain. The Federal Government gave “paucity of funds” as an excuse for not providing much palliatives to the industry to recover from the COVID-19 crisis. The aftermath of the pandemic has left Nigerian aviation industry haemorrhaging and gasping for breath till date.
As I write, the situation has exacerbated. Local airlines have been struggling to remain afloat. Faced with skyrocketing price of aviation fuel, scarce forex, poor infrastructure at the airports, etcetera, the operating environment has been hellish and suffocating for local airlines. Fleet capacity has been reduced to 38 per cent. Two local airlines have shut down operations, with attendant job losses.
Nigerian flying public has been experiencing incessant flight delays, cancelations and astronomical increment in airfare. As a result of these ugly developments, a lot of Nigerians can no longer afford to fly neither will they risk traveling by road for fear of being kidnapped. An auspicious time like this calls for pragmatic actions from the Federal Government to provide leadership out of the doldrums.
Unfortunately and sadly, the Federal Government, via Ministry of Aviation, is on a wild goose chase of floating another airline, Nigeria Air, when local airlines are closing shop as a result of difficult operating environment. Thousands of jobs are being lost and many Nigerians are finding it hard to afford high airfare. Local airlines cannot access foreign exchange for critical spare parts, let alone acquiring new aircraft.
The entire aviation sector is enveloped in the misery of uncertainty and unpredictability. As a passenger booking your flight schedule, you are gripped by the fear that your flight could be delayed for hours, or even cancelled due to difficult operating environment, yet the regulator that should be saddled with enhancing ease of doing of business is preoccupied with a misplaced priority, trying to float another airline, Nigeria Air, in an already saturated industry with over 20 prospective airlines awaiting approval.
With most aviation transactions domiciled in dollars while income is in naira, local airlines are finding it difficult to service their aircraft in the midst of acute scarcity of forex. For example, to do a C-check on Boeing 737 costs close to $2 million. With exchange rate of N725/$1 parity, it is a herculean task to raise such humongous amount with the attendant cascading negative effects on the airlines that are bedeviled by rising cost of aviation fuel and poor infrastructure at the airports.
So, the big question is, why a national carrier now? Is it not ill-timed and wrongly advised? The Ministry of Aviation said that the Federal Government would only have 5 per cent equity interest in it, who are the remaining 95 per cent shareholders? Information from the grapevine insinuates that 49 per cent is reserved for a foreign interest, possibly an airline, while 46 per cent is reserved for Nigerian investors.
What is the name of this foreign airline? What are the names of Nigerians taking up the 46 per cent shares? Why the secrecy regarding the shareholders of a proposed “national carrier”? Isn’t government supposed to be occupied with helping a strategic sector like aviation survive the hard times, instead of creating another conduit to waste limited public resources on a project billed to fail from the outset? Is this not a misplaced priority? Time shall reveal.
Nigeria Air recently got its Air Transport License (ATL). It is billed to start operations, as Federal Government has approved a lease of three aircraft for its commencement. Between 2019 and 2022, this initiative has allegedly gulped appropriation provision of N14 billion. This is happening in a sector where only four out of 22 airports are viable. Even some of the functional airports do not have adequate runway lighting systems.
Infrastructural facilities in Nigerian airports are still poor compared to what is obtainable in other climes. Here, limited parking slots for aircraft makes airports resemble disorganized motor parks, orchestrating delays in flights. There is no Maintenance Repair and Overall (MRO) facility in the country that can do high level of aircraft servicing like C-checks and D-checks.
Local airlines spend millions of dollars annually to service planes abroad because of non-availability of MROs, thereby putting pressure on the nation’s limited foreign reserve and its downward spiral effects on the naira vis-a-vis the economy. Instead of misappropriating public funds in the guise of floating a national carrier that won’t withstand the already hostile operating environment, Federal Government should redirect these funds to reduce the burden on local airlines by upgrading facilities at the airports and investing in MRO facilities to enable airlines service aircraft locally and ensure that aviation fuel is refined locally, as well.
Today, the nation’s aviation industry needs government intervention to save it from impending collapse arising from high cost of aviation fuel, scarce forex and poor infrastructure at the airports. Floating another airline in the name of “national carrier” will only complicate the challenges in the industry. A nation, in which debt service has buoyed her revenue, with a fast-depreciating currency, can no longer afford such an expensive experiment whose outcome is already known to be in the negative.
What manner of unpatriotic persons sat in the Federal Executive Council (FEC) and allowed this illogical proposal to scale through at this point that the nation is technically broke? And ASUU is still on strike for close to six months because of Federal Government’s inability to meet the union’s financial demands?
The International Air Transport Association has even said that Nigeria did not need a national carrier at this juncture of nationhood. This ill-advised move to float “Nigeria Air” at this point of economic crisis is not only a misplaced priority but very unpatriotic. Those behind it should, for once, put national interest above selfish interests.