Exploring Nigeria Aviation Challenges And Opportunities
Despite the aviation industry been seen as catalyst for economic growth and development of any nation, bickering over the current economy challenges faced in the Nigerian aviation industry is necessary as the industry is faced with increasing challenges.
Nigeria with over 200 million population and 15 million air travel passengers movement which makes the industry an asset. In 2019, Nigerian aviation sector was the fastest growing sector in Nigeria in terms of Gross Domestic Product (GDP), moving up 13.2% yearly to N83.5billion from N73.8billion in 2018.
The industry was tipped to increase it current contribution to the nation’s GDP but the outbreak of the coronavirus pandemic halted repeat or surpass of such economic contribution in 2020, in fact, the industry is expected to suffer a decline in revenue.
There are numerous challenging factors that has retard the growth of the air transport in Nigeria. One is the high cost of maintaining aircrafts; two is that majority of their technical staff are expatriates so they pay hugely for their remuneration; three is that the airlines are over taxed.
Last week, the management of Arik Air relieved 300 members of staff of their appointments adding to the economic woes in the country as unemployment in the industry is increasingly uncontrollably.
Also, mid part of this year the management of Air Peace airline sacked 69 pilots over financial constrains posed by the coronavirus pandemic, while Bristow Helicopters also disengaged 100 pilots and engineers over welfare issues and alleged infractions.
Another setback is that the necessary infrastructure needed for smooth and seamless operation is inadequate and the scarcity and high cost of aviation fuel are also among the challenges hindering operations of local airlines.
Nigeria has enjoyed accident – free flights operations in the last five years having record just one accident or incident in flights operation, with proper efforts put in place by the industry key players.
MMS Plus brings you the views of key players in the aviation industry on various reoccurring issues in the Nigerian air transport.
Speaking with MMS Plus on the possibility of airlines cutting corners in terms of safety operations, the Public Relations Officer of Nigerian Civil Aviation Authority (NCAA), Sam Adurogboye, describe such move as impossible and insist on safety first.
In his words, “Airlines just like other sectors are all hit by the COVID-19 but would that be a reason to cut corners by airlines worldwide. Certainly No”
” NCAA would continue to do its job as it should whether in time of abundant or scarcity. This is our mandate. We have no other business other than ensuring everyone play the game according to rules”.
On indebitedness of Airlines to the agency, the NCAA spokesperson posits that the agency as always been in talk with airlines on how to pay back.
He opined that there are lots of opportunities in Nigeria aviation, noting the availability of market, the passengers and the the purchasing power which are the indices investors look out for.
Adurogboye argued further that the industry had fared well in term of safe flights operations and noted that the year has been challenging for the industry.
According to him, “On how Aviation fare in 2020, it’s still a safe year for us, except for the helicopter crash. The year has also been challenging for us all in view of COVID-19, no nation is immune from the effects”.
However, following the development of the globaland regional airnavigationplans, Nigeria had developedthe Civil Aviation Policy, the Civil Aviation Master Planas well as the Aviation Roadmap.
In addition to the above,Nigeriaal so developed the National Aviation System Block Upgrade ImplementationPlan to provide guidance in the development of the aviationinfrastructure in line withglobal strategy and timelines.
The Managing Director/CEO, Nigerian Airspace Management Agency (NAMA), Fola Akinkuotu, pointed out challenges in air navigation infrastructure development in a paper presentation where he noted that Inadequate funding, high cost of capital, lack of access to capital market, high cost of maintenance, operating cost and unstable foreign exchange rate ($/N) are parts of the numerous challenges in air navigation.
From the forgoing, it is obvious that the development in the air transport sector is guided by global, regional and national plans that are strategically linked to global objectives and priorities towards achieving a standardised, harmonised, interoperable and seamless air transport system.
Similarly, he posits that significant investmentshave been made by Government Agencies and privateagencies in thedevelopment of air transport infrastructures to enhance safety,security, capacity and efficiency.
It is also obvious that remarkable opportunities exist within the sector that can be harnessed by local and foreign investors if the challenges enumerated are urgently addressed.
According to him, “theAviation Roadmap and the Master Plan hascreatedtremendous opportunities in the Air Transport sector. The massiveinfrastructuralinvestments in the sector aimedat enhancing capacity and efficiency have also createda lot of opportunities in the sector”.
Also speaking with MMS Plus, Former Commandant of the Murtala Muhammed Airport, Lagos, and also the Secretary General of the Aviation Safety Round Table Initiative and Chief Executive Officer, Centurion Securities, Group Captain John Ojikutu (Rtd), speaks on a myriad of aviation sector challenges pointed out numerous flaws from airlines and other key players.
According to him, “let nobody in Nigeria aviation or precisely let no commercial airline use Covid-19 pandemic as reason of not to have made money, they had their problems before the pandemic. The debt they are owing is before the pandemic except both public and private operators in the industry are able to let us know their commercial earnings before the pandemic, before we are able to know the impact of the situation”
He argued that If their earnings are not known before the Covid-19, there might not be a way able to know what have been lost. Ojikutu queried the excesses of airlines and their over dependence on the promised bailout fund by the government.
In his words, “the only thing airlines talk about is palliatives but in the real sense which area would the palliative be spent on is it on operation that is not been carried out or on staffs that are not been paid. We need to know, because all this recklessness that is been said around is not good for the industry. What the airlines want does not making economical sense”
“The industry have been very careless about revenue earnings because they have been reckless in spending the little they get. Airlines are beginning to sack, the point is even those that where making money also sacked, not only did they sack they even go as far as parking their aircrafts”.
Ojikutu given optimistic solutions for the industry, argued that aircrafts that are not currently in use should be converted for cargo so as to help the airlines sustain operations.
“At the beginning of the pandemic I suggested to our airlines operators that for them to have back their pre-covid passengers number it going to take minimum of two years because the recession is in every part of the country. Looking at the passengers where will they get the money to fly”.
Speaking on the government palliative for the aviation industry that a bailout of N5 billion was in the offing for aviation. Operating airlines would get N4 billion, while aviation service providers would be entitled to N1 billion.
“I asked what was their rational for saying the 5 billion was too small for the aviation industry because the government was even kind hearted enough to have given out such fund despite the airlines indebtedness of 22 billion. This is a public fund for private business owners, how then do we say it too small”.
Recently, airlines operators had increased airfares about 100% as cost of operation increases. However, Ojikutu had accused airlines of recklessness and poor business plans. He blame NCAA for non enforcement on defaulting airlines as stipulated by the aviation regulations.
According to him, “I told the airline oprrators that they must be making money elsewhere aside the airfare because of the air charges of flying less than a $100, the point is they have bad business plans and they are reckless. Why are they now increasing their fares but again I blame the NCAA, since the airlines are not working and you have check list on them, what then is referred to economic regulations. If they are not financially healthy NCAA has the power to suspend their license that is what the regulation says it either it suspended or withdrawn”.