We Don’t Need Free Money But Access To Single Digit Loan – Prof Okonkwo

Prof. Obiora Okonkwo is the Chairman and Chief Executive Officer(CEO) of United Nigeria Airlines and Publicity Secretary of Airline Operators of Nigeria(AON). In this interview, explains why flights are delayed or cancelled; why NCAA should take up the role of a regulator as statutorily stated abd how the aviation industry will grow given the right support. He spoke with Arise TV but monitored by MMS Plus. Excerpts:

 The minister of aviation and aerospace development has read the riot act to the agencies under his watch, NCAA, NAMA and the rest. The president said if you don’t perform, you would be sacked as a minister which was one of the major outcome of the ministerial retreat and he has taken that message down the line saying, he doesn’t want to be sacked and he wouldn’t allow anybody get him sacked so people down the line needs to perform but there’s a part that concerns airline and that is delay and cancelation of flights to the dismay of an average traveler along the domestic airline. What do you think of the minister’s charge and how does this charge affect owners of airline directly?

I was live in the stakeholders meeting in Lagos, indeed the Minister was very clear that he would rather sack his head of agencies than losing his job. That gladdened my heart because for the very first time in a very long time, we are seeing a situation where government wants to hold  somebody responsible for his actions or inaction because there must be consequences for failure and also corresponding reward for success. So, as for the announcement that NCAA should publish the list and details of flight delays, it is actually to the best interest of the operators because the whole intention is to let the travelling public know why there are delays and who is responsible because it’s part of the agreement we reached at the stakeholders meeting. Let these delays be published weekly, let the reasons for the delay be made known because we are aware 95% of the reason for delay is outside our capacity or not from the operators.

We listed all those things at the stakeholders meeting, so we are happy that these information will be made available to the public about the delay. The public should also be educated or enlightened about their own rights because as much as there are rights to the travelling public there are also rules that they must obey because we do see a whole lot of unruly passengers who goes beyond mark when they find themselves in flight delays because no matter what you do flight delays in aviation is there even in America and other parts of the world and the only thing we can do is to work on areas that we need, to ensure we minimise it.

We emphasize particularly as  we are going to the yuletide season, very soon you will be hearing about flight delay due to bad weather in Asaba, harmattan weather in Lagos and so on and so forth. So these are things the minister has taken note of and we are aware that he is going into action to make sure that changes are made but we are happy as operators about this development and also that we have a minister who is conscious about all these problems and ready to work with the stakeholders to make sure they are solved, more importantly holding the agencies responsible to do what they have to do.

 I would like to ask you what constitutes this delay, what role does the airline play in them and let’s talk about reporting time for those delays. What do you say about all these?

You know in our list there are over 90 reasons that could lead to flight delay and out of all these, probably about five could be attributed to operators and the only reason it could be is that if you have an AOG. AOG is that, you have an indicator of any fault in the aircraft, for safety you have to clear this before you can take off. It may not be that there’s a problem, but this is a big business and nobody wants to take a chance because it involves life.

 Apart from that the rest of the problems are from weather, lack of infrastructure and all that. You might find out that 90% of the delayed time, when you look out across the window you might see an aircraft packed. It’s there because it is trying to check the weather in the next destination and by the rules you check on hourly basis. Two, three hours may be gone the aircraft and crew are packed there and you can’t take off. It could be a VIP movement, they don’t announce and they don’t give you notice in advance because of security reasons.

 You are hovering over and above just to get clear and soon as that is done, you are already having serious traffic and even if the delay is just 30 to 40 minutes because of the accrued traffic that happened that period, it might take the next two hours. We have talked about weather, in most part of the world, aircraft lands on zero visibility but here in Nigeria, you have to count on about 2000 visibility to land because the facilities are not working, we raised the issue. There what is called the IRS, it gives you a clear indication on the tarmac but you see, most of the airports have IRS but they are not calibrated and they have been paid for. So when you hear the minister talk about mundane equipment, this is one of them.

 You should know that some of these airports do not have light so most of the time you have to use your eyes to land, these are simple things but they are causing a whole lot of operational issues.

On rudely passengers, you may board a flight, door closed and someone refuses to put his bag in the right place and because of the rule you can’t leave until the bag is put where it has to be, there’s a disagreement, there’s a fight and 2 to 3 hours you are dealing with the situation because if you have to disembark the passenger, the crew has to go back to the security post and give a report,  so you can go on and on and on and then you are taking off in the morning, you are loaded, then there’s a round check which is done by NCAA, that round check is an uninformed check and you know how things goes it might take two to three hours.

 Most importantly you are coming into an airport like in Lagos, there could be traffic, the packing space could be low and the rest. I tell you a story that will shock you, sometime last year we had landed in Asaba airport, United Nigeria, Airbus 320, in that Asaba airport that time, I think the situation might have changed now, the next in queue was Airpeace, then Aero, United Nigeria landing with Airbus 320, they had only one step to take in passengers, they had to take us, the process of taking United Airline’s passengers  at the airport and boarding them will take like one hour, so the passengers in Airpeace were in the aircraft for one hour waiting and the passenger in Aero where queued on ground waiting for two hours for theirs because they can’t get that.

 These are simple things you can never imagine and when this thing happen in one station, it affecting your entire schedule and sometimes you are faced with issues of flight cancellation. One of the things we made a very strong request about with the minister was why should we have an airport and we can’t fly into this airport as long as we want, from 6:30pm to midnight or even 24 hours because aircraft are manufactured to fly, we are underutilizing the equipment we have paid huge money to bring into the country.

 As a matter of fact, a typical aircraft should fly 18 hours out of 24 hours in a day but here we only fly 8 hours and you know why? Because we have sunset and sunrise in the airport. That means you can’t start operation before 6:30 and 80% of the airports apart from Abuja, Lagos, Kano, Port Harcourt to an extent, you can close by 6:30pm except for special arrangement that will cost you huge amount of money to fly beyond 6:30pm. In that case the airport squeezes their operations to get a minimum of eight circles in a day, at least to break even in that flight. With that eight circles we are forced to be doing a turnaround within 30 minutes. Because we have a turn around of 30 minutes, the slightest delay , you are already overshooting  the 6:30 time and then what happens, you don’t have to go to that airport, you have aircraft, you have crew but you cannot land, then you cancel.

In all these things, the only thing the passengers know is to heap the blame on the operators. So when the minister said they have to announce this delay, it is in the best interest of the operators, we are happy with it, we demanded for it, we are going to show the cooperation that is needed. So these are the little things and there are a lot more but I can tell you that we, the minister and his initiatives are working together and are going to partner for the best of services to the travelling public and the growth of our national economy.

 The minister has given his own charge, as a stakeholder, what would be a specific charge first to the head of those agencies, just in case you have observed that some ministries are lagging behind and then what the minister has to do from the ministry end to make the work of the agencies easier?

As the minister there is need for him to intervene less in the activities of the agencies because the agencies by the law establishing them are not Nigerian law but international laws under the auspices of ICAO, they have to operate without interference from the government or from the ministry. Obviously, minimum oversight is also very important, we made that agreement with the minister that they must have to be allowed to operate and we also informed them and agreed that NCAA has to be the master agencies among all other agencies; FAAN, NAMA and others.

Before now they were being taken at the same level. So if the agencies will be able to report to NCAA, NCAA will oversight the other agencies and then the minister should now get his information from the NCAA, that’s the way it is done in other part of the world but it hasn’t been so in Nigeria and it has been affecting certain ability of NCAA to oversight them. We agreed in the stakeholders meeting that it will be so and I have no doubts that in further retreat, the minister has announced they would be having this week, they will come out with a strong statement about that and then the implementation we hope will be smooth. When that is done, we are going to see a whole lot of improvement because NCAA by the act establishing them has oversight functions over the rest of the agencies.

 On the side of NCAA, our charge to them is that we are acknowledging in the past that they have had some problems in having the right team to work, if you had followed the report from that stakeholders meeting, the DG told us he’s 62 and  he’s the youngest person at the highest rank of the agency’s decision making team. At 62, what that tells you is that the rest of the people are already around 70 and above in their retirement age. It is not the best age to face the challenges of the agencies and the reason is that the agency has been kept within a salary scale and that scale cannot measure up to those in that private arm, therefore they cannot attract the best hands in the industry, something has to be done about this otherwise there will be a very big problem.

 On the side of FAAN, we had also agreed that they are overburdened with so much responsibilities and there should be a process of unbundling FAAN and there were suggestions that in the unbundling there may be various companies coming out of FAAN. That’s on the table, I will not reveal it until the minister himself takes a decision on that. So these are part of the things that are expected to happen very soon, the minister is serious about them and when this happens it will be a big revolution in the sector and we have no doubt that it will be of mutual benefit to both the operators and the regulators and at the end of the day the credit will go to the minister and the government of the day.

 A lot of Nigerians are concerned about your industry, what’s happening, we saw a near crash situation that could have taken the life of a serving minister in this country in Ibadan, what would you like to say about that episode?

One thing I can assure Nigerians is that our aviation industry is the safest in the world, very safe, the records are there. In the last ten years, I don’t have to talk about the statistics, they are available and as a matter of fact when it comes to aviation safety, from the ICAO recent auditing of NCAA, Nigeria was scoring 90% over and above many countries of the world. I don’t think that there is any African country that has more than 30% score and you have five Nigerian operators including United Nigeria that have ICAO certification. This just a certificate of safety that will update you about the standard of safety all over the world, I don’t think there are many countries that have that number of certified operators, so this is one assurance that I have to give you.

What happened in Ibadan airport happens in most part of the world and nobody  even talks about it,  such an incident in the aviation world means nothing. Skidding out of the airport but it could be avoidable, it has to do with the technical situation of the aircraft , it has nothing to do with the fault of the crew nor the facility.

 There are talks about certification and licensing that there were no enough licensing for the airlines as regards, private used airline or to be used commercially, so there’s been that back and forth talk about licensing, so a lot of people are gassed as regards what is happening and recently you also saw many revelations that came out as regards water in the tank and all that, so these are the things that are raising concerns for a lot of people. What do you say about this? 

Yes  these are quite unfortunate situation with regards to water, I think that the necessary authorities went straight into that and there are lot of things that are being done to make sure that It doesn’t happen again but in terms of licensing, I don’t think so, there’s nobody who will get on board to fly without proper licensing, in fact, we do say some times, NCAA over-regulate. They are very tough and it’s not what happens in other parts of the world that should be a wrong notion. Anybody who is flying here has the right certification and it is being regulated.

So the incident in Ibadan if I have to go back to it briefly, simply has to do with lighting in that airport, there’s no light in that airport, the captain has to land with his eye view, seeing the tarmac from his cockpit. Those things are not good and then obviously weather. In a bad weather situation it is not going to help anything.

You might come when it is raining and then there is a poll of water at the tarmac, which should not be so, when you land, it slip and skids. Skidding is not really an accident is like you have landed and something slips you, when it happens within a close range to the tarmac, then that’s when you skid outside the tarmac, otherwise it not really a major issue in the aviation world, so that should not be anything to worry about but I think if the light, facilities, at the airport are in place, it will reduce the risk of any incident because the crew will see a lot more but you see for every incident there is AIB report and when that report is published, you will find out that it has nothing to do with incapacity of the crew or the state of the aircraft, nothing as that has happened recently, so it just about circumstantial issues which can easily be overcome and that’s the need for all these concern and action coming from the minister which we are really happy about it, so the travelling public don’t have to worry.

 There’s being a hike in the price of ticket, just over 100% and a return ticket to Abuja these days could cost an arm and a leg. You were quoted sometimes ago to have said, it is forex influenced but the Naira has appreciated against the dollar over the weekend, so when there’s an improvement like this, are we likely to see a drop in ticket price due to forex improvement?

This improvement in the rate just happened over the weekend, we are happy about that and we are looking forward to see that it’s be sustained. The immediate relief I will give you is that you might not see a continuous increase in the ticket rate but for it to drop over night, no. We have said over and over again that all the flights that people have been making since January this year is being subsidized by the operators and for the reason that the cost of operating here is very high and we don’t have cheap funds and slightest change in all these monetary issue affects us and you can’t be changing prices every day, every minutes and all that, so what happens is that we have been waiting, hoping and praying that there will be a change in the rate of forex but it was not coming, then gradually there was a progressive change in the cost of ticket.

So what I can tell you is that if you have a ticket price in the morning and it rises in the afternoon, it’s not our making, there must have been a situation where, if the number of seats in that aircraft has gone to certain percentage and you are buying late on a travel day, that’s the only way it will affect the price. We don’t change our ticket price like the forex market because changes might occur in forex in a split of an hour. You make it look like buying tickets is just like trading forex, that’s not the case because you have procedure you have to go through before a change can be effected. Let me make one thing clear to you, a typical operator doesn’t make money from high cost of ticket, what is important in any flight is the number of passengers that you have on that flight and the average rate of ticket because for every flight that takes off from Lagos to Abuja or anywhere there is a cost per seat.

 So it pays us to have a full flight at a certain affordable price, we know that the higher the price the less number of passengers we would get. Don’t forget that you are only talking about the cost of forex, we still have to deal with the cost of aviation for which is now over a thousand Naira, we still have to deal with cost of fund which is now about 25 or 26% and above. Aviation, we have been saying is a critical sector of the economy as it is treated in all parts of the world, there’s a single digit loan for agriculture, power and other critical sectors and there’s a huge subsidy for land transport but we are all means of transport, what we are saying is that as soon as the government starts recognising the position of aviation as a capitalist economic development in this country and giving it the attention it desires and deserve, things will go better.

 We are not asking for free money, just access to single digit loan, all these things will aggregate and make our operation a better one and also we need access to this forex, because now we are talking about the rate of this forex, it is not just about saying it has gone down, have we access to it? Aviation is a highly regulated industry all over the world, all eyes are on the aviation industry, for every one that is involved in the industry, he or she must have gone through serious KYC with the partners and vendors all over the world. They don’t expect us to wake up one morning and start paying some money into their account from any source, it has to come from an official source and that official source we don’t have. So we think that with all these things, the effort the minister is making and working with his colleagues in other agencies like finance they will come out with a road map that will ease this operation.

 The passengers will benefit but the operators are the bigger losers from the high cost of ticket but I also know and you should know that the cost you pay for car hire, coming to airport from town now is three to four times higher in the last six months, so if in your own reckoning aviation is double then we are still very considerate and fair but we just have to pray it doesn’t go higher because we don’t have free funds and we cannot continue to bear the losses but we can only be able to do that for a period, we have pool fund and because your operational fund is being eaten into with the cost of forex then it becomes very hard for you to bear.