Three years after he established Peace Airlines, Chief Allen Onyema has learn the ropes the hard way. In this interview with Kelvin Osa Okunbor, he talks about the ups and downs of running an airline.
What is your evaluation of the travel market vis-a-vis the performance of Air Peace?
The industry is not where it should be, but it is growing. The industry needs a lot of improvement. When I was coming in, I was warned about the harsh environment under which domestic airlines operate. I dismissed such warnings with a wave of the hand, but now I have seen it all. Air Peace will be three on October 24. In less than three years I have received my own baptism of fire. I have gone to the school of Nigerian aviation, I have seen it all and I make bold to say that there is a lot to be desired. However, Air Peace, as I promised during our launching on October 21, 2014, was coming to revolutionise the way the scheduled flight operations are done . We have lived up to that promise we made.
It is evident that if Air Peace had not come at the time it did, no one knows what would have been happening in scheduled operations today. Our coming helped to sustain competitive fares in domestic travel market. We have contributed our own quota to the economic development of this nation and we are proud of what we have been able to achieve as an airline so far.
We have caused a lot of changes in the aviation industry; we brought with us on-time departure that was lacking before we came in. We provided several frequencies right from the first day. It was the first time an airline will be doing 14 flights on its first day of operation. We opened up five different stations the same day. So we took the bull by the horns right from day one and we have never looked back. So, to a large extent, Air Peace has contributed in changing the face of aviation in Nigeria.
What is your fleet size now and what is your plan for expansion?
We started with seven aircraft; four Boeing B737s and three Donnier 328 jets. Today, we have been able to acquire 15 more aircraft. So, we now have 22 aircraft in our fleet. So Air Peace is Nigeria’s largest carrier today fleet-wise. We have 13 Boeing B737s, six Embraer 145 regional jets and one Donnier 328 jet. We also have two Boeing 777s for our international operations, which are still domiciled outside the country.
With your long-haul aircraft delivered, why are you not operating international services yet?
We will go into international operations very soon. We planned that we would go into international operations two years after we had started. So it was in our business plan to go international, to help conserve foreign exchange and to help create wealth for the people. Air Peace is not unaware of what the foreign airlines have been doing to our country. A nine-hour flight from Johannesburg to London would cost less than a six-hour flight from Lagos to London. This country has been raped; our foreign reserves have been depleted in the hands of foreign airlines. All foreign airlines are making a killing out of Nigeria because domestic airlines are not firmly operating international destinations. So Nigerians are at the mercy of these foreign airlines in terms of outrageous fares. So we decided to go international and we are taking it step by step.
We should have by now started our foreign operations but for some hindrances that have to do with policy. We are ready to touch the whole world but we need the support of government and people of Nigeria.
I know that under Airline Operators of Nigeria (AON), airlines have been making efforts to get government to review the alleged double taxation on airlines. How far have you gone with the campaign?
AON took this matter then Acting President, President, Yemi Osinbajo, and he called for a meeting; we met with him and gave him details of our grouses. And he called for an enlarged meeting of all the agencies and the Ministry of Aviation and the airline operators. We held a second meeting where we presented our issues. Osinbajo set up a committee to look at these issues and the committee is yet to meet. The committee comprises the Minister of Aviation and the agencies and maybe about three representatives from the airlines.
The International Air Transport Association (IATA) has recommended ways African countries can boost the aviation industry to create more jobs and generate more revenue. IATA also talked about some inimical policies in Africa. What is the way out of these challenges as an operator?
Government must protect the investments that create and sustain jobs for the citizens. That should be the priority behind government policies. In aviation, government must ensure that local airlines are protected. Foreign airlines don’t create jobs for Nigerians; they don’t pay huge taxes that we pay; so government should encourage these indigenous companies.
A government official recently told me that allowing foreign airlines to fly to many airports as they want in the country is good for competition. That did not make sense to me because those airlines that come to Nigeria are protected by their host countries. They do not allow foreign airlines to dominate them. That is what our government should be doing for us.
No country in the world allows the open rape of its skies.
In Africa Nigeria seems to be too liberal; allowing all airlines from the continent to come to the country.
We have given unfettered access to foreign airlines and I urge government to look at the bigger picture and not the pittance these people are paying to the government in the name of passenger service charge. They should begin to look at the bigger picture, first of all these foreign airlines are carting billions of dollars out of this country yearly. These billions of dollars should have been channelled into doing other things if they are being earned by domestic airlines.
Do you agree with the observation that the aviation sector is more conducive for foreign airlines’ operation?
I was shocked when I read that Ethiopian Airlines is trying to take over Arik, but the question is, on what basis? If you are bringing Ethiopian management to help run Arik here separately, the question is don’t we have enough people here to do it? The Capt. Roy Ilegbodu management is doing very well. They are trying to turnaround what they met on ground. We have capable Nigerians to run Arik; we don’t need Ethiopian Airlines to come and run Arik.
In giving out management contract to Ethiopia to manage Arik, we should look at the consequence. We should not allow our country to be taken over by foreign airlines that have the sole intention to exploit our country and make profits. If Ethiopia takes over Arik Air tomorrow the economy of Ethiopia will depend on Nigeria; this is because they are going to be carting away billions of dollars to develop their own country because Nigeria is a huge market. So coming in here to buy Arik or take over Arik is not for cheap. If Arik owes N300 billion that is pittance to what these people are going to cart away. N300 billion is less than $1 billion, Arik is worth about $12 billion in goodwill and opportunities. Anybody coming to buy Arik should pay down about $12 billion, excluding Arik equipment; I am talking about the goodwill and opportunities.
All this noise about Ethiopia being a successful airline is because no Nigerian airline has succeeded. Domestic airlines operate under the harshest environment you can think of, but with the right support we can excel.
A stakeholder in the industry, Group Captain John Ojikutu, has accused domestic airlines of refusing to pay their charges to aviation agencies despite making so much money. What is your take on that?
That is not true; it is absurd, bizarre and unfortunate. If I fail to respond to what he said, many people in the society might start believing him. The summary of his advocacy is that domestic airlines should be killed because you want to form a national carrier. To start with national carrier is a moribund idea. British Airways is no longer a national carrier; America with their might in aviation does not have a national carrier. What the whole world is doing is called flag carriers because government has no business doing business.
Airline operation has so many avenues for leakages, no government can run airline very well. As the owner of Air Peace, I man the day to day running of my airline. I have not been able to stop the fraud going from one end to the other because there are avenues for it, not to talk of an airline owned by government. So national carrier is a moribund idea, countries don’t do it. Nobody tells you how much South African Airways owes and it is subsidised by South Africa. It is the same with so many national carriers.
What I will advise the government to do first is that it must facilitate the establishment of a good maintenance hangar that can do up to D-check and the whole world will be coming here to maintain their plane and we will be getting foreign exchange. Air Peace alone spends huge foreign exchange to maintain its aircraft overseas. None of our planes comes back with less than $3 million for every C-check. This year alone we have sent about seven aircraft overseas for C-check; that is over $21 million . You could imagine if the hangar is situated in Nigeria. If this money is domiciled here and used here the amount of jobs it will create. So we need a maintenance hangar, the government can support or bring investors; not the national carrier talk.
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