In this write-up consisting view of players as well as our opinion, Nigerian flight Deck looks at some of the task before Minister of State, Aviation, Senator Hadi Sirika pointing out areas he may already be aware of so he can prioritize them and tackle some of the inherent challenges that face the industry. While wishing him Godspeed on his appointed task, urging him not to make the same faux pas as his predecessors.
November 11, 2015, President Muhammadu Buhari swore in his Ministers, the policy drivers of his administration and handed down their portfolio thus dampening the hue and cry over the appointment or otherwise of ministers in the country.
The president in his wisdom, had reduced Ministries in the country to twenty-five as he had continued to explain that with the economy in dire straits, the country cannot afford the luxury of the overhead it used to operate and that brought about scrapping of some ministries and the merger of others.
One industry that was duly affected in this is the Ministry of Aviation that has been merged under the Ministry of transportation, with a Minister of state, Senator Hadi Sirika, a former pilot and former member of the Senate Committee on Aviation to man the affairs of the sub-sector.
Having been part of the system and done various oversights on the system he was part of, it is expected that this gentleman comes with a lot of experience and should know what needs to be done across board to move the industry.
Not just for airlines as a former pilot, or for government parastatals as a Senator charged with over sighting the subsector at some point but for the fact that since he is part of the system no civil servant can pull wool over his eyes and mislead him.
The issue of spending six months to one year learning on the job does not arise and so he hits the ground running and facing the issues headlong.
Senator Sirika should know as a matter of fact he comes into a highly contentious industry riddled with half-baked agreements, half done projects, complains from operators who feel they get the short end of the stick once and agreement is signed as well as complaints from government agencies that state that operators are highly indebted and refuse to pay or service their debts.
In fact, the good senator should prepare to roll his sleeves as there already are a barrage of complaints on grounds ranging from labour to extinction of domestic airlines and in this era where employment needs to be created for the teaming youth and graduates, losing airlines is bad business for the country.
Many operators , unionists, stakeholders have before now been speaking on what they feel needs to be done to make their side of the divide more comfortable and so it is time to merge all the needs in a potpourri, sieve them and draw out solutions that have bedevilled this industry for a long time now.
Alhaji Muneer Bankole
Speaking at the 21st League of Airports and Aviation Correspondents (LAAC) Annual seminar titled Achieving a Win-Win situation in the Aviation sector, Chief Executive of Medview Airlines, Alhaji Muneer Bankole said Nigerian airlines should be empowered to enable them to have a huge market share and fairly compete with global airlines by reduction on charges, providing friendly policies for airlines and looking into the high interest rates of domestic banks among others.
Bankole threw around various challenges to the government some of which are over charges by government agencies of which some were PSC, TSC, Navigation, Landing, Parking, FIRS, VAT ststing that some of these charges increase operational cost
He also decried the high price of Jet A1, Aviation Fuel which is a major index of expenses; and was disappointed on the multiple entry points granted other mega carriers which enables them airlift passengers meant for domestic carriers to solve the Jet A1 malaise he advocated that price of fuel should be considerably reduced and to ensure the availability of the product all-year-round.
Bankole said,” Unfavourable government policies: the local airlines are not favoured by the granting of foreign airlines multiple entry ports into the country. One airline lands at Lagos, Abuja, Enugu and Kano for example. This does not leave any passenger for the airlift of such passengers to the local destinations by local carriers. The policy of multiple entry policy has to be reviewed. Any foreign airline seeking multiple entry ports must partner with a local airline before permission is granted”
Experts feel It is critical that any Minister who comes in also looks into the alleged exploitation of BASA by ministry officials to benefit foreign airlines and the recent abolishing of royalties and commercial agreement to deprive the country a revenue of over $200m from foreign airlines that are benefiting more than we do from BASA and are yet, been giving multiple landings thereby depriving our private airlines the benefit of domestic market.
Bankole also spoke on double digit bank charges on loans, “High cost of bank charges on loans poses a great deal of problem to the airlines. No encouragement here. Access to one digit loan for airlines should be encouraged by CBN with favourable repayment plan. Moreover, the government can provide equipment to the local airline as support rather than giving out funds.”
Bankole also said that spare parts and the cost of maintenance were high and in foreign currency while ticket sales were in local currency making it difficult for airlines to actually break even.
“Spare parts are purchased in foreign currencies while tickets are sold in local currency. This makes the cost of aircraft maintenance in Nigeria very high hence it’s a major challenge to local airlines. The cost of importation of spare parts is gradually increasing. The solution to this is simple, there should be 100% waiver on importation of aircraft spare parts for all local airlines.”
Dr. Olu Owolabi
Also buttressing Bankole’s last point on tariffs, Managing director of Skyways Aviation Handling Company, (SAHCOL) Dr. Olu Owolabi in his own area surmised that high tariffs on importing ground handling equipment and spare parts are bleeding the handling business further stating that without these equipment imported the business will not only lag behind but remain noncompetitive
Owolabi said the cost of acquiring state of the art equipment was on the one side going side by side the enormous cost of getting it into the country to do business especially as the country does not manufacture or even maintain these equipment and thus cannot earn foreign exchange from it as payment done for services here is in naira.
Other areas that also needs to be looked at by this new Minister include, infrastructure, debts as mentioned earlier, runways, maintenance hangar and some other areas.
On infrastructure: Already there is some works going on with revamping the infrastructure at the nation’s airports, five new terminals are being built and if the words of the Federal Airports Authority of Nigeria (FAAN) is anything to go by they will be ready by the first quarter of 2016.
The Minister must sustain, but prioritise this infrastructure development in the aviation industry. The country’s resources may not support such large scale development but already 19 airports are still being remodelled and some 15 cargo terminals are being built.
Most of the cargo terminals are still at the foundation stages but, when completed, could be the game changer in the fortunes of local farmers. However, since it would be difficult to build all the 15 cargo terminals at the same time due to lean resources, the minister could start by completing one cargo terminal in each of the six geopolitical zones and complete the rest later.
In the area of debts, the unions have cried hoarse over certain airlines, concessionaires owing parastatals and those airlines and concessionaires have cried back. All this as a result of haphazard agreements signed when no one was looking.
New runways are another issue, it is a fact that the Nnamdi Azikiwe International Airport needs a second runway but recently the Senate adjudged that the cost quoted by the Ministry for the second runway (N64B) a big fraud as it was over three times the price of building a new airport in the United Kingdom and urged for a reassessment of the cost.
The Abuja second runway has been in debate since the time when democracy was referred to as ‘our nascent democracy’
Then there is the clamour for a Maintenance Repair and Overhaul facility (MRO): Building an Aircraft Maintenance, Repair and Overhaul (MRO) facility in the country will optimise the inherent potentials and benefits of the sector. MROs can create thousands of jobs and retain huge sums of money in the country that indigenous carriers spend on the repairs of their aircraft overseas.
Good thing is there is one constructed in Akwa Ibom, beyond partisan politics and who did what, that hangar needs to be looked at and strengthened so it can start work and help us save the much vaunted public funds as well as aid in training our engineers, even if it means partnering with an established MRO organisation to aid build capacity for Nigerians.
No doubt, the Senator Hadi has a whole Aegean’s stable to clean and needs to partner himself with the industry positively and do the right things as many feel the industry is easy to clean up, all that is needed is some will.
Sen. Sirika Hadi is a former pilot and a Senator of the Federal Republic of Nigeria, who represents Katsina North Senatorial District under the platform of Congress for Progressive Change. Sirika held the position of (Vice-Chairman) of the Millennium Development Goals (MGDs) Committee set by the Nigerian Senate. He became a senator in 2011. He is currently the Minister of State, Aviation under President Muhammadu Buhari‘s administration.
Senator Sirika is a former pilot and a former member of the Senate Committee on Aviation. He bares his mind, undisguised about issues, probably like his principal.
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