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Great expectations after mixed fortunes in local air transport

By Wole Oyebade
03 January 2020   |   4:21 am
The disappointments of 2019 were indeed glaring. But the marginal growth in the air transport business was fairly comforting and reassures a better 2020 – if the decision-makers are willing.

Nigeria Air… another year without the national carrier

Despite another year without any of the much-mouthed national carrier, airport concession, aircraft leasing company, and maintenance facility, aviation stakeholders are upbeat about potential growth in the New Year. WOLE OYEBADE writes.

The disappointments of 2019 were indeed glaring. But the marginal growth in the air transport business was fairly comforting and reassures a better 2020 – if the decision-makers are willing.

While many still await the aviation development masterplan to materialise in its fourth year on the table, there are low hanging fruits to explore for additional growth ahead of the grandiose agenda of holistic sectoral development as promised by the Buhari’s administration five years ago.

Specifically, stakeholders are seeking clear-cut policies to support investments through enabling environment, strategic incentives and modalities, continuous commitment to upgrade and improvement of safety critical infrastructure and other palliative measures across the board. These, among others, will not only fill the void of waiting for transformation, but also consolidate on marginal gains amid the letdown of 2019.

Safety first
One of the priceless gains of 2019 is the zero-crash recorded in commercial operations. The industry, to date, has the enviable record of four-year operations without a major accident.

Comparatively, it was a good year for local aviation given general concerns about safer skies as led by the Boeing 737 Max disastrous episode early in the year. The second plane crash in Ethiopia claimed two Nigerians – Prof. Pius Adesanmi and Amb. Bashua – with 155 others, and has since thrown the entire Max model and Boeing Corporation into disarray.

Besides, the local aviation industry with an upswing in flight services recorded more nervy moments onboard the airplanes of Air Peace, Arik Air, Max Air, Med-View Airlines PLC, among others. It was the year of attempted runway invasions as well. However, none resulted in casualty, much to the credit of the operators, service providers and their regulators.

A particular standout regulatory performer is the Accident Investigation Bureau (AIB). It will be recalled that the bureau, since January 2017, has deepen efficiency leading to the release of 26 final reports, 93 recommendations and four Safety bulletins to date.

Relatively, the output was far better than the bureau had done since it was established in 2007. The AIB Commissioner, Akin Olateru, often said that the renewed commitment was part of efforts to clear the backlog of pending accident investigation reports and have attendant recommendations implemented to further enhanced safety in the industry.

Marginal growth in airlines’ fortunes, operations
But for the operational misfortunes of Med-View Airlines PLC, the local airlines showed stability in operations. Med-View in the last four months has stopped commercial operations, while the eight airlines, including the new entrant, Ibom Air, are showing growth potential across their niche markets.

With a boost in capacity via aircraft acquisition, airlines like Dana Air, Arik Air, Aero Contractors, Max Air, and Ibom Air have expanded operations into erstwhile unviable routes for improved connectivity across the country.

Air Peace airlines, with about 40 per cent stake in local aviation, showed more strength with newer investments in fleet acquisition and expanded route network.

Recall that the airline some months ago set a continental record with a firm order for 10 brand new Embraer 195-E2 aircraft. The deal makes Air Peace the first to order the brand of jets in Africa. The order comprises purchase rights for another 20 E195-E2 jets. With all purchase rights exercised, the contract was valued at N646.6 billion.

However, money laundry allegations by the United States authorities against the Air Peace Chairman and his employee has lately taken the wind out of the airline’s sail. The accused have vowed to prove their innocence in the New Year.

Over 10 per cent growth in traffic, sales
Though the facts are still sketchy, there are indications of an upsurge in passenger traffic and attendant sales revenue in 2019. The Minister of Aviation, Hadi Sirika, earlier said no fewer than 18 million passengers now travel through the Nigerian airspace in a year. The surge, compared with the 2017 figures, represents about 11 per cent increase in passenger traffic.

The marginal growth trend continued in the first quarter (Q1) of 2019, with no fewer than 3.5 million passengers travelling through the airports. The Q1 report released by the Federal Airport Authority of Nigeria (FAAN), showed an increase of 76,397 passengers and 2.23 per cent growth compared to the 3.43 million passengers recorded in the first quarter of 2018.

Sirika, at a meeting with stakeholders in Lagos, said the industry recorded marginal growth of 33 per cent rise in local passenger traffic and 11 per cent in international travels.

President of the National Association of Nigerian Travel Agencies (NANTA), Bernard Bankole, confirmed that the sector had grown by a minimum of 10 per cent in revenue size, especially in the area of international travel.

Bankole said given the peculiarity of the Nigerian environment, “it will be difficult for the Federal Government to measure the Foreign Direct Investment (FDI), but evidence abounds that a lot of foreign investors are coming into the sector for good businesses.”

“The industry has grown by about 10 per cent. There are African airlines that derive more than 60 per cent of their market from Nigeria. They cannot fully disclose their gains here for obvious reasons. There is stability in the system and the currency is also stable. With better policy to drive enabling environment, the sector can contribute more to the economy,” Bankole said.

Lull over Nigeria Air
Unconscionable flop of the 2019 has to be the Minister and his national carrier plan. For reasons best known to Sirika, a lull has engulfed the much-anticipated plans to set up a national carrier in his second-coming.

Granted that the first-half of a re-election year naturally goes to politics around here, stakeholders are disappointed that the second half since Sirika was sworn-in has delivered nothing of significance to aviation.

The disappointment was far-reaching among many that had expected his aviation background to be an asset, as the first square peg to occupy the office. More so, he is the longest serving aviation minister with enormous goodwill from all and sundry in a rather combative sector.

“It is more painful to see other African countries reviving national carriers for real, more than a year after we launched ours on a projector at the London airshow. An airline is not a rocket science and Sirika should know better. In 2018, the issue was non-budgetary provision. What of 2019? There is more the minister should do for our sector than just sit at the cabinet as one of the untouchable president’s men,” a stakeholder said.

2020 of new hope, expectations
The disappointment notwithstanding, experts are unrelenting in their call for a national carrier, among others the minister had promised.

Aviation Security consultant, Group Capt. John Ojikutu (rtd) said the carrier was imperative to effectively compete with foreign airlines on the continental and the intercontinental routes.

But in the interim and to grow the local sector, Ojikutu advised that in the place of multiple destinations each of the foreign airlines should be restricted to either Lagos or Abuja, and anyone or two from alternate regions to the airport of the first choice.

“These arrangements will create a market for domestic airlines. The Federal Airports Authority of Nigeria (FAAN) must upgrade the dormant and not too active airports for night flights to improve the domestic airline’s markets and earnings.

“Also, they should grade the airports into four categories where the grade one (Lagos and Abuja) would charge higher service fees than grade B, and B higher than C, and D may charge no fees to encourage patronage. Airport concession is a global practice and we must do it only with the nonaeronautical facilities like the passenger terminal and cargo buildings, aircraft parking areas, carparks, toll gates, operators or tenants restricted used areas, and so on.

“The aeronautical, which includes the runways, taxiways, and associated lightings should remain with FAAN so as to maintain the national obligations to the intercontinental safety standards as FAAN becomes a holding company.

“Domestic airlines should plan to operate to all the airports, if facilities are improved for night flying and services fees are reduced. The Aviation Security should be excised from FAAN and made autonomously. To be able to conform sufficiently with Chapter one of ICAO Annex 17, ensure that single command and control is established from the autonomous agency for all government security agencies working in the airports. That is what the USA TSA at all airports is about,” Ojikutu said.

Member of the Aviation Safety Round Table Initiative (ASRTI), a think tank group of the sector, Olumide Ohunayo, agreed that the government must begin to give safety critical infrastructure the attention it demands, to complement and sustain renewed commitment of the airlines.

“Government should begin to improve the facility at the airports, expand the operating hours, and reduce the cost of operation at the airports that are not viable to attract services to them. They just need to concentrate on these safety and security requirements, and leave the airlines to the operations. That way, the industry will show progress and live up to its potential.

“I am not an advocate of government giving airlines bailout again, but having the infrastructure in place and the enabling environment. Government can also help with the availability of aviation fuel, if they can bring down the cost to improve services of the local airlines,” he said.