Stories by Louis Ibah
Investing in Nigeria’s domestic airline industry can be likened to a conscious and risky decision of flying an aircraft on a route saturated with the most turbulent of storms, lightening, thunder and poor visibility without any option of a smooth weather along the way and even when landing.
“In the last three years, what I have been doing is simply the pursuit of a life passion of finding the right business that can create lots of jobs for Nigerians; there is no gain, instead it appears as if the industry is structured so that investors incur losses,” an airline CEO told Daily Sun at a recent interview. “I have been operating this airline like a charity organisation, believing that one day things will improve,” added the CEO who preferred to remain anonymous.
But who exactly is to blame? For the past six years, heavy or multiple taxation, multiple ceding of routes to foreign airlines as well as high cost of fuel and insurance have been repeatedly blamed for the industry woes, but in recent weeks, industry stakeholders are beginning to look elsewhere for another possible cause – the quality of regulation provided by the Nigerian Civil Aviation Authority (NCAA).
What if the NCAA is not very effective in its regulation of the country’s domestic airline industry? Data released from the NCAA over the weekend indicated that in 2000, Nigeria had about 150 vibrant domestic airlines flying to various routes within and outside the country, but sadly, by 2017 (about 17 years later), the country can only boast of eight functional local airlines – Air Peace, Dana Air, Aero Contractors, Medview, Azman Air, Arik Air, Overland and First Nation.
Nigerians would not easily forget such local airlines like Bellview, ADC Airlines, EAS, Chanchangi, Kabo, Okada, Albarka, Slok Air, Discovery Air, Virgin Nigeria, Sosoliso and Air Nigeria. They are all dead. And the impact of the demise of such large number of airlines has left over 600 Nigerian pilots jobless, according to data sourced from the Airline Operators of Nigeria (AON). Can poor safety and financial regulation by the NCAA be totally absolved of responsibility for the ill fortunes – the dip in revenues, the various snags, the missed-air crashes and actual air mishap as well as the decline in aircraft fleet – of most existing and extinct local airlines?
Stakeholders blame poor regulations
Some stakeholders in Nigeria’s aviation sector are questioning the quality of regulations – or its absence – on the local airline industry, especially with the recent takeover of two of Nigeria’s most vibrant airlines – Aero Contractors and Arik Air – by the Asset Management Corporation of Nigeria (AMCON).
Some have even called for the removal of the current Director General/CEO of NCAA, Capt. Muktar Usman, faulting his competence. But for others, it’s an issue that has to do with the inability to get the NCAA to operate as an autonomous establishment free from undue government interferences as is obtainable in other jurisdictions.
A statement by the Aviation Round Table (ART), a notable industry professional pressure group, on the poor state of the Abuja airport runway was nothing short of an indictment on poor regulations by the NCAA of the local airline industry.
Part of the ART statement stated: “For the purpose of our assessment and as key stakeholders and custodians of the legacy of fairness, truth and integrity in addressing safety critical issues in the sector, we need to ask the salient question – ‘how did we get here?’
“This could only have happened due to the fact that the NCAA, which is responsible for conducting safety oversight of the sector, was docile and failed completely. The lethargic oversight of NCAA have effectively contributed in bringing the situation to where it is today.”
The ART also noted the “unfortunate, constant political interference by the Executive arm of government, the Aviation Ministry, which continues to usurp the role of NCAA has hampered its effectiveness especially the current Director General.”
The Chairman of Bi-Courtney Aviation Services Limited (BASL), managers of the Murtala Muhammed Airport Two (MMA2), Dr. Wale Babalakin, speaking on the topic, “Focus on Nigeria’s Aviation Sector”, on a Channels TV programme, The Crux, monitored by Daily Sun recently also heaped the blame on the NCAA for the collapse of Arik Air, which led to its takeover by AMCON.
Said Babalakin: “I won’t sit down here and join in criticising Arik. Arik would have its own issues but the system indulged Arik. The system overlooked all the breaches of agreements and understanding and allowed it to compound the problems until a stage when they could no longer tolerate it.
“You should ask the regulators these questions: When did Arik begin to breach agreements or processes? How long did they take to respond to those breaches? When did Arik stop paying the dues it ought to pay? How long did it take to respond to those issues? What was done to ensure compliance? It’s a systemic failure,” he added.
NCAA now toothless bulldog
On his part, renowned aviation analyst, Capt. Dele Ore, likened the NCAA to a toothless bulldog and even called for the removal of its Director General, Capt. Muhtar Usman, saying that he had performed below expectations since he was appointed the helmsman of the regulatory agency.
“The industry needs very strong regulatory authority. That aspect of aviation has been so weakened since Dr. Harold Demuren left. What we see now is a weak regulation,” Ore added.
In reminiscence, Ore said there was a time the NCAA reached 97 per cent in the International Civil Aviation Organisation (ICAO) safety audit but that at present, the NCAA scores 65 per cent in the ICAO audit rating. It, however, has to be noted that in the aviation industry audit, the pass mark is 65 per cent, so it isn’t really a bad score for Nigeria.
“Demuren raised the standard so high but it has been lowered gradually over the years. We are in the minimum requirement now and I make bold to say so. We need a stronger leadership in NCAA. There should be qualified persons at the helm of affairs in the agency while unqualified persons should be booted out,” he added.
While Ore said training of staff has been stalled in NCAA, he alleged that the weakest link of industry is in licensing, personnel licensing, airworthiness, licensing of aircraft, and issuance of Air Operating Certificate (AOC) to airlines.
“I believe that the standard has been lowered now. A system that allows people who are not qualified to get AOC is a rotten system,” he concluded.
Some analysts have also accused the NCAA of not caring to regulate the way airline finances are managed by their owners, a trend that often leads to several months of unpaid salaries to workers with the attendant risk to safety given that an unpaid worker, if lured with money, can compromise on just anything.
Sacked NCAA directors
In what appears a fallout of stakeholders’ complaints in recent months on the NCAA, the Federal Government recentlysacked top directors in NCAA and appointed new ones to replace them. The Director General/CEO of NCAA, Capt. Usman, was, however, spared in the purge.
The General Manager, Public Affairs for NCAA, Mr. Sam Adurogboye, however, debunked all allegations bordering on weak regulations by the NCAA. “It is unfortunate that we are being criticised for not doing anything to stop local airlines from dying. It’s so unfortunate that people are saying these things about our regulations,” Adurogboye said.
“The truth is that if we didn’t regulate those airlines the way we did, as people are complaining today, they would all have been dropping from the sky killing people. The regulation we give is very strict on safety. It is not within the purview of the regulator to come and say who is the Managing Director or Chairman of an airline. That is what people expect us to do. The problem is that corporate governance is not there in some of these airlines that are dying. It’s an issue in most Nigerian businesses.
“But we can’t go into the issues of running an airline for the owners. We don’t write feasibility studies for an airline. We are not business people in the NCAA. We only regulate to ensure they have the capability, employ the right staff, demonstrate that they have the liquidity to start the airline and we say okay go ahead,” he added.
“Before they bring in an aircraft, we send inspectors to see if it’s air worthy and we clear it to come in and we issue permit to start flying if all is okay. Once you get an AOC from the NCAA, it means you have demonstrated the capacity to run a smooth operation. But if you are not able to fulfil safe operation as time goes on; for instance, you are unable to pay premium on insurance, keep maintenance schedule at approved time and pay your charges, is that our fault? So it is very wrong for people to accuse of us of not doing enough to regulate the industry. Our major target is safety regulation and we are doing that very well. People have to run their businesses very well.
“Now, there is no country in the world where there are no charges or levies. It is even interesting that we are not charging what others are charging in other countries like tourism development charges. There is nothing like multiple charges because these are charges they are complaining about; the operators know prior to joining the business. So why do you complain thereafter? It is a deregulated business; it is a free entry and exit business. As I am speaking to you, while some airlines are gone, some prospective investors are still submitting applications to come in. If an airline crashes or folds up, it’s the loss of the airline owners. So regulations should even start with airlines,” he concluded.
Dana Air launches self-service kiosk at Lagos airport
Dana Air has launched a self-service kiosk at the Murtala Mohammed Airport 2 Lagos as part of measures to ease sales of tickets to passengers.
The self booking kiosk which is the first at the terminal, is a platform that enables travelers book the airlines’ tickets, modify tickets, book on hold, pay for tickets, and rescheduled their tickets on the spot, get information on promos and events and lots more!
The airlines’ guests can also avoid the regular queues at the counters and book, pay, and check -in online conveniently at the self-service kiosk, which will be operational 24 hours every day.
Speaking at an event to launch the self-booking kiosk, Dana Air’s Communications Manager, Kingsley Ezenwa, said, “every day we review our services to see how best we have served our guests and what more we can offer. The self booking kiosk is just one, out of the many innovations our esteemed guests should expect from us in 2017, as we will continue to deploy necessary technology to meet and exceed the flying aspirations of our guests.”
“Also, as part of efforts to make our frequent flyer programme a truly rewarding experience for our guests, we have partnered various hotels and cab service providers to give huge discounts to members of our frequent flyer program Dana Miles,” he added.
Commenting on the self booking kiosk, the CEO of domestic terminal two of Murtala Mohammed Airport 2 (MMA2), Captain Jari Williams, said ‘’Dana Air is one of the leading airlines here at our ultra modern terminal and they will stop at nothing, just to satisfy their customers. This is just a commendable attempt towards enhancing passenger experience while reducing the time passengers have to wait to book or pay for their tickets.’’
Dana Air operates over 27 daily flights from Lagos to Abuja, Port Harcourt, Uyo and Owerri.