At the just concluded aviation stakeholders forum held in Abuja, Minister of State, Aviation, Senator Hadi Sirika presented a paper based on what this administration concedes are challenges in the aviation industry and proffered ways that government plans to deal with these issues.
For any economy to grow, aviation is a crucial component; a catalyst of some sorts that helps to speed up growth as it cuts across spheres like travel, tourism, agricultural production and distribution, trade and commerce, rural development, manufacturing and oil and the non-oil sector.
The ripple effect and the value chain aviation creates is immeasurable and one statement of fact is that Nigeria has not yet tapped into the full potential of this economic critical sector, especially with the large market that the country possess.
Current statistics reeled out is that the Nigerian market on its own is a market servicing over 600 million people in West and Central Africa; this is half of the continent, twice the United States and far greater than continental Europe, it is against this backdrop that the country is taking steps to rejig, revamp and restrategise aviation to achieve maximum benefits.
Minister of Aviation, Senator Hadi Abubakar Sirika who met stakeholders on May 16, 2016 highlighted some concern that have in the last two decades bedevilled the aviation sub-sector and government’s plan of action in an effort to address some of these challenges in the shortest time possible.
Among issues raised were of security, infrastructure and a whole gamut of challenges that have been used are indexes to rate the country’s aviation low despite its market size.
Sirika who gave a presentation on government’s activities in the subsector highlighted some challenges, one of which is the absence of a national carrier which has hindered the country’s maximization of the Bilateral Air Services Agreement (BASA), Multilateral Air Services Agreement (MASA) and Open skies advantages.
According to Sirika, the lack of a national carrier has caused the country capital flights, lack of image and prestige and a lot of other issues bordering on the choice of an appropriate business model.
Sirika said that government needed to establish a national carrier in order to gain optional benefits from BASA/MASA stating that the national carrier will be publicly owned and listed with institutional investors, public offering. The Minister of State also said that once established the carrier will form alliances with others to increase reach, flexibility and routes.
Closely knitted to the national carrier challenge is that of the lack of a Maintenance Repair and Overhaul (MRO) facility, something that is absent in the whole of West and Central Africa and has led to high maintenance cost of Nigerian airlines giving them nightmares as that transaction is done in forex.
He said that government would create an enabling environment for the establishment of an MRO facility that will attract clientele from Africa and all over the world stating that the facility will be encouraged to start manufacturing of aircraft spare parts with the intent of going into manufacturing for the long term like Brazil and Ethiopia.
Because of the nature of aviation, a lot of transactions in the business is done with foreign currency which is currently a challenge, aircraft acquisition, purchase of spare parts, maintenance and training are all paid for in foreign currency, however, Nigerian airlines sell their tickets in Naira and have to pay for the services enumerated above in forex.
Sirika’s said the Ministry’s solution is that it is working with CBN, Ministry of Budget and National
Planning and Ministry of Finance to include airlines in priority list of foreign exchange allocation.
Then Sirika highlighted another priority challenge in the sector, the cost of Jet A1 (aviation fuel). He said that it has been evident over the years that the product constitutes a substantial operational cost of the airline further stating that the situation is made worse as the country currently imports the product 100% with the supply inconsistent.
The Minister in his solution stated that already arrangements have reached an advance stage to commence the production of Aviation Fuel (jet A1) in Nigeria in order to bring down the cost and regularize supply, something that most stakeholders have clamored for.
One of the priority areas discussed was Safety and Security at the airport which because of recent attacks on aircraft, airports and aviation installations has become an area of concern, according to the Minister, government’s response in this area involves but is not limited to a comprehensive security threat and vulnerability assessment coupled with certification program for airports as well as the development of a new security strategy in partnership with international security organizations (NTSA to take the shape of TSA), procurement of modern/state of the art equipment and capacity development.