Aviation Agencies Should Explore Alternative Sources Of Income – Adurogboye

By Ayoola Olaitan

Mr. Samuel Adurogboye is the Head, Public Relations department at the Nigerian Civil Aviation Authority (NCAA). In this interview with MMS Plus, he reviews the impact of COVID-19 on the aviation sector, taking a look at airline operators fiscal challenges and proposes some solutions to the pending air tickets. He also makes case for aviation agencies to explore novel strategies to generate revenue, while encouraging airliners to weather the storm.

 

Following the ban on flights across most nations as a result of the COVID-19 pandemic, can passengers request for refund on their canceled flights?

Yes, passengers can request for refunds on their cancel flights, basically they are different kinds of tickets. There are promotional tickets that cannot be refunded and is always stated, when you buy such tickets. You need to know which kind of tickets you bought because if it is promotional tickets which most times they tie it to certain periods, they always have time limit which will be indicated. So, the promotional tickets is cheaper than the regular and they will indicate when it needs to be used and when you don’t use it between that period you won’t get refund because it was earlier indicated. Sometimes people can buy tickets for others and they might not know these details. Or in some cases, somebody bought such ticket for you and you are not aware. However, ignorance is not an excuse.

This COVID-19 situation is peculiar, it is neither the fault of the airlines or the passanger who had booked the flight prior to outbreak of the pandemic.

The period we are is an emergency. It is an emergency around the world and some airlines have agreed to refund and some will not. I would not want to mention names but some even agreed to refund but you know the current situation is an emergency and a major catastrophy like a war. So, people are cut up here and there. For whatsoever reasons some have not refunded but at NCAA, we are currently working on the modality. If it gets to that point airlines would have to refund, however, this is still in the making and I can’t be categorical on that.

When you buy an air ticket and the airline don’t carry you they are meant to refund but in the case we are now it is not something nobody could imagine because it was unexpected. It is also important to note that as a result of the ban on air travel across the world for over the month, these airline operators have recorded enormous fiscal losses. It is an experience that everybody will learn from in the aviation sector. How we handle this numerous conflicts that would ensue after the pandemic would require sacrifice on the part of the passengers and the airlines.

However, monies have been collected for service that wasn’t rendered and the norm is to have such money refunded because that is what the rule says. People have recorded losses here and there and maybe they don’t have money to refund now and that’s understandable. Maybe the airlines will be pleading for more time while others would encourage the customers to use the tickets for their next flight. These are the discussions that will be taking place between the airlines and passengers. But apart from that the ideal practice is that passengers ought to be refunded.

 

What are the steps taken by the NCAA to prevent staff retrenchment at the agency and across the nation’s aviation industry?

I may not be able to speak for the entire industry, but let me speak for my organization for now. At NCAA, we are not thinking in that direction yet, in terms of staff retrenchment. It is a serious issue but all efforts at the moment is to be alive first and get out of this crisis.

All efforts from the government side is channeled towards getting out of this as quickly as possible so that the pandemic is not prolonged. After the pandemic, we will now seat down again to discuss on what have we lost, where do we start to make amends, what can we do to shore up revenue? At that time, these  discussions could begin. You can now take a figure that quantifies your loss and see where to look for help and see whether to go to the government. It is also pertinent to remember that even the government is faced with its own fiscal challenges. We are all today witnessing how Nigeria has to beg people to buy its crude oil which is the main source of income for the nation.

So, if we all run to the government for revenue, where will they get the funds when the sale of crude has also been affected. Everybody is calling for help, yet the only income of the government of Nigeria is crude sales. This means everybody is actually affected either as a family, religious organization or whatever we are all affected and we all have to make sacrifices.

People have been sending bank account numbers to one another as if the recipients of have funds in millions. Even if you have money stocked up somewhere and nothing is coming in, it will go down and there is need to have a plan to replenish it. Everybody has to start working to get out of this pandemic quickly in terms of finance and otherwise.

It is after this pandemic, we can look at our losses to be discussing measures to prevent staff retrenchment via staff salaries cut or forgoing the months already owed, that is writing it off. The bottom line is that sacrifices will have to be made but I think government isn’t pondering retrenchment at this time. How can people come out this pandemic and you think of retrenching them? After enduring the hardship, it will be like asking them to commit suicide.

If you are discussing retrenchment or salary cut, on what basis would that be? We really don’t know when this pandemic would come to an end, so at what state are you arriving at that?

You know therebare people who asked you for money second day of the lockdown; what about now that we have spent over a month? What will they be asking for when it is extended? You should also note that the aviation sector is one that wouldn’t pick up immediately after the pandemic because people wouldn’t be in a hurry to travel about as before. Only very essential trips would be made. So, it’s important to explore alternative sources of funding.

At NCAA, we already started holding serious talks on how else can we generate income.

The Authority is saddled with the collection of 5 percent sales charge on all tickets originating from Nigeria, cargo operations and charter/contract flights. This 5 percent sales charge after collection is shared with other aviation agencies such as Nigerian Airspace Management Authority (NAMA), Nigerian Meteorological Agency (NIMET), Nigerian College of Aviation Technology (NCAT) and Accidents Investigation Bureau (AIB) as approved by the Civil Aviation Act 2006. It is this 5 percent revenue collected from airline operations that we run our agency. We don’t get anything from the government, but we are already thinking of what else we could do we are already working out documents and exploring options to see how we can generate income so that in an emergency like this so we will not be hit so hard.

I think that how everybody needs to start thinking and this applies to other aviation sector agencies and beyond the industry. There is need to have this approach for the sustainability of the nation’s economy.

 

The Central Bank of Nigeria (CBN) came up with N50billion loan with airline operators listed as potential beneficiaries. Have airlines started benefitting from this and what is your take on the airlines accessing the loan?

I wouldn’t know if airlines applied for the CBN loan. Don’t forget we don’t run it for them we only provide atmosphere for their operations. The airlines also need to start working out means of surviving and overcoming this crisis. Of course airlines too will not be wrong to seek help from their government. If you look at some airlines in Europe like Air France and Lufthansa have already been assisted by their government with billions to cushion the effect of the pandemic. So, you can’t be wrong by supporting your own when the help is affordable. It is just that some of the airlines are more affected than others. Some have bigger fleets why some have smaller fleet and the bigger your fleet, the bigger your overhead cost. As a result of this, it would be unfair to subject them to the same amount as loan or palliatives. Definitely, the airliners have been seriously hit and they need help. They can’t be wrong by seeking this help from the federal government through the Central Bank.

 

If we are to cost the economic impact of the COVID-19 pandemic on the sector what measure or percentage would it have been?

When we get out of this pandemic, we will have to figure out the impact on the respective airline operators to know what has been lost. There is still a ban on flights but on NCAA website you can find the air travel statistics of last year showing the movement from January 2019 to  December 2019. After studying this, you would have an idea of aircraft movements that didn’t occur and you can calculate the financial losses. Nevertheless, the situation hasn’t come to an end.