Olunide Ohunayo, Head, Research Zenith Travels
Head of Research Zenith Travel, Olumide Ohunayo has said that the panacea to the ailing air transport industry, especially the airlines is not recapitalisation as proposed in certain quarters but fleet re regulation.
He made this known in his recent paper latching onto the report of the committee set up by the Minister of Aviation, Osita Chidoka to look at charges, fares and other factors militating against Air travel in the country.
According to Ohunayo, the idea of recapitalising airlines after the last exercise that ended up enriching banks as well as the Corporate Affairs Commission (CAC) and end up an error.
His words,” The committee set up by the honourable minister to look at charges, fares and other factors militating against the development of the industry have submitted its report, with the minister directing the agencies to ensure immediate implementation.”
“The committee did a good job and brought to the fore some of the issues that has been raised in the past by industry watchers which includes but not limited to the dubious fuel surcharge hidden in our tickets by operators while also avoiding the tax regime. Other recommendations among others include the unnecessary retention of agency funds by operators while the poor performance in quality, service and operations was hinged on poor capitalisation and a need to urgently recapitalise the airlines.”
“I humbly disagree on the issue of recapitalisation as a panacea to the problem of our airlines. It will only ensure we once again progress in error and deceit, these airlines in-conjunction with their bankers will prefer to see the airlines limping than being taken to the theatre for surgical operations.”
“The bankers want to keep the window of loan repayment open, in tandem with lawyers employed for the preparation of documents by the airlines. They will only recapitalise the accounts of Corporate Affairs Commission and the lawyers engaged to process the documents. Thereafter the recapitalisation will be achieved.”
In retrospect, he said that during the twilight of the Obasanjo government, Chief Fani- Kayode was the minister of aviation with a marching order to stop the concurrent air mishaps and unsafe operations. He gave the same directive to all airlines to recapitalise based on their operational certification, the deadline was May 30 2007, barely 24hours to handing over to the new government.
“The airlines knowing the rudiments of presenting and processing documents got their legal team to work and they all recapitalised and also effectively beat the deadline set by the federal government.”
“Looking at the list of airlines that recapitalised and satisfied the aspirations of the government as it were, at that time, only Arik has increased in equipment and operations while others have shrunk in size and operations or simply vanished or in coma. So what has recapitalisation achieved?”
Ohunayo also said that the way to go way Medview as the airline appears to be doing well with route expansion on the domestic and international routes with an increasing fleet, also promising to take the airline to the market which literally translates to ownership with other Nigerians and willing investors.
“It’s a good gesture that must come to fruition which will serve as a tonic for other carriers and also help stimulate the Fly Nigeria Act Project. The expansion and fleet size of Medview airlines is nothing compared to the size of Arik Air whose dominance of our skies is unpararelled in recent time.”
“Sadly, the dominance has been used to benchmark foreign airlines crazy and exploitative fares on the international route. How do you justify Arik Air charging N94, 000 one-way on the Accra –Abuja route, a flight of less than 45 minutes and N360, 000 on the Lagos- London route a flight of less than 7 hours, just to latch on the Christmas season?”
He called for two strong flag carriers and a competitive domestic one to create healthy competition among other things.
“We need to build at least two carriers to fly the flag and a third to compete well on the domestic route; this will ginger competition, attract investors, expand ownership and increase enplanement.
“To achieve these objectives we must abort the fanciful flight of recapitalisation and board the fleet consolidation by regulation flight that will move minimum fleet from two to ten. A stitch in time saves the industry from prolonged agony. “