Why Nigeria Airlines Cannot Be Viable – Iyayi
The President and Chief Executive Officer of Top Brass Aviation Limited, Roland Iyayi, was a guest on Nigeria Television Authority (NTA) recently. He highlighted key issues in Nigeria’s aviation industry in the last five years. Roland also gave detailed responses on pertinent issues in the industry and gave solutions to some of the industry challenges.
Has the Nigerian aviation sector gotten to the altitude, if not, what are the factors and turbulence you forsee ahead?
I think we have done well but there are lots of areas that needs to be addressed. Looking at the various projects done by this administration and that is been achieved, speaking to the Minister of Aviation in 2015 looking at the fact we had scarcity of funds it was a matter of prioritizing areas. There are quite lots of low hanging foot areas which ordinarily I think if the industry has taken adequate cautions of early enough would have helped.
The industry is somehow improving but unfortunately, the airlines are dying, I will elaborate further on that; all the agencies in the aviation sector all the six of them rely 100 percent on the airlines and I say this because as we see today as soon as the Covid-19 pandemic crisis began about 17 airports are declared unviable, I disagree with that position but that is where we are today and that simply because all the airlines by one way or the other are over taxed.
The taxes and charges are what funds aviation now that the airlines are not flying no income for those agencies, so all the agencies are near comotos the government had to come up with funds by which way they will need to invest in the agencies to keep them afloat. For instance, if the Federal Airport Authority of Nigeria (FAAN) would reappraise its priorities and look how it is it would focus on non aeronautical revenues around the airports.
Currently, aeronautical revenue is about 80 percent of their income, if they can do this to be 20 percent and 80 percent aeronautical revenues, the airport will be viable even when the airlines are not flying.
How can we have an appreciable progress in the industry with what has been achieved by this administration?
The thing is I believe that there can be appreciable progress with what has been achieved. We need to have regulatory reform and I am very happy that we have the civil aviation bill and other bills before the national assembly awaiting final reading and accent to the law. I disagree with some portions of the bills because those where not the bills that was discussed with the airlines.
For instance, a current bill of the Civil Aviation bill 2019 seems to criminalize airlines for certain reasons which I think will be avariance with the context of what the industry is all about, meanwhile airlines are already regulated and over tax, if they continue to bundle airlines with taxes airlines will not be viable in respective of the infrastructure you have on ground. So there is a need review substantially some of the regulatory issues, policy issues.
Are Nigeria airports viable, if not, what are the alternative strategies to attain efficient airports?
For example when we say airports are unviable when we are deregulated in 1985 we had several airlines come in operating the same type of aircraft that Nigeria Airways had, now if you deregulate a market you already fragment that market with such capacity airlines can not be the same .
Now, all we have in Nigeria are airlines competing on capacity rather than fairs, so you don’t have a situation where somebody will want to go to Abuja and ready to pay 10,000 naira and you find a flight no you can’t, airlines are charging the same 30,000 to 35,000 per seat. So what airlines are competing on is not fare but capacity.
Deregulation actually means that you should be able to compete on fairs so there is a distortion there and where does that distortion comes from, if we go back to the numbers in agencies there are overbloated numbers in the agencies there is a tendency that says we need to charge more fares and taxes.
On Nigeria’s quest to dominate West African aviation market with establishment of Maintenance Repair and Overhaul (MRO) centre in the country, is this the way go for the industry?
On setting up an MRO, an MRO is not like a car garage that you set up and any kind of car will come in there, there is a need to specialize on a particular type of aircraft so before an MRO is set up, there is need for market analysis well”
Looking at the African market what type of aircraft is popular in this market that If set up there will be good patronage and this must be structured out to work with the local market, so that the objective of addressing capital flights can be addressed
Indeed Uyo is a very good facility but it does not have the equipment and necessary tools to service any particular type of aircraft. So for Uyo to be made useful facility, it must be equipped to service particular type of aircraft that is the first step to address the MRO issue.