Can Sirika Make a Difference?

As the new Minister of State for Aviation, Hadi Sirika settles down to work, stakeholders in the aviation sector are optimistic that he can revamp the aviation sector if he adopts the right strategies.

In the last few weeks, the media has been awash with reports of evil activities of Boko Haram, Nigeria's new cabinet members and the poor rating of Nigerian airports.

The decay of airport facilities has remained on the front burner for weeks because Nigerians were shocked that despite the wealth, manpower and skills the country can boast of, its airports could be so poorly rated.

Also, with terror threats and tragic attacks in Paris last week; the downing of Russian airliner by suspected bombing in Sharm el Sheik, Egypt and the threat of Boko Haram, it has become very important for Nigeria to reinforce its security at the airports.

It is said that without the airlines, there is no air transport industry. Government would have to be unequivocal about its plans to give domestic airlines the lifeline to make them operate better and how it would realise the national carrier project; although more Nigerians seem to oppose the national carrier project, contrary to the enthusiasm that welcomed the idea at the beginning when Buhari indicated interest in having a national airline.

Airport Facilities

To develop the airports, government must have to privatise or concession the airports. Industry experts suggest that concession is a better option, considering other variables like security, monopoly and others. But government must have to proceed with the concession.

Besides, for fear of losing their jobs, workers of the Federal Airports Authority of Nigeria (FAAN) may not want the concession of airport terminals and other facilities. With concession FAAN may no more play a major role in the management of airports. But such fears are not misplaced. The Nigerian government has a tendency of not caring for its citizens and the labour laws in Nigeria are the most lax and least implemented. So one can understand the apprehension among FAAN workers in the event that government decides to concession the airports and split its management.

If appropriately done, FAAN workers could get severance packages that would enable them become employers and investors.

But it has become very critical that government must bring in the private sector to continue to develop the airports and manage them effectively, else the facilities will continue to suffer decay and mismanagement. Government cannot summon the funds to maintain the airports and keep them in tandem with modernity. So, government should heed the advice of industry experts that airport facilities should be concessioned. And there is no better time for that than now.

However, whenever that is done, most of the technical staff of FAAN would still be relevant. According to industry consultant, Chris Aligbe, FAAN could be a regulator of some sort and should oversee the effective management of the airports, while it controls security, marshaling and management of the runways.

It will be most appropriate for government to develop the necessary frameworks and establish policies on airport facilities concession. The first experiment with Bi-Courtney Aviation Services Limited (BASL) was successful despite controversies that surrounded it. The Murtala Muhammed Airport domestic terminal concessioned to the firm has been a success story so far. So, appropriate concession arrangement, with the right legal backing, future concessions would be as successful and less controversial.

Airport Safety

Industry intelligent expert who has been in government for several years told THISDAY last week that what happened at Sharm el sheik, where Russian airliner with over 220 passengers was allegedly bombed, could happen in Nigeria.

"I fear this may happen in Nigeria so we have to be more careful. It could happen in most third world countries and even in advanced countries because security routine can be boring. After a time you unconsciously start taking things for granted. That is when the evil doers will strike and call you back to reality," the source said.

The CEO of Centurion Securities and former Lagos airport commandant, Group Captain John Ojikutu said that aviation security officers are not being trained regularly; they are inadequate so government needs to recruit more hands to effectively cover the airports. There should be perimeter fencing to check the influx of people to airport premises and also to stringently screen passengers and luggage before they are taken into the aircraft.

"With threats of possible terror attack on airports, I suggest we review the background checks on all airports staff working in the security controlled areas or conduct one if there have been none before. We need to ask all the airlines to do same for their crew members in view of the latest development. Combing the airports for possible traces of Boko Haram is a panic measure, which is not enduring.

"My suggestion for background checks on all airports staff is based on the possibility of having Nigerian in the Islamic State (ISIS) or Boko Haram (insider threat) who could be threats or risks to civil aviation and who should have been on the watch lists or no-fly lists," Ojikutu said.

FAAN senior official in the aviation security department told THISDAY that the agency is in dire need of more security personnel; that the airports are not adequately covered and have not met the International Civil Aviation Organisation (ICAO) recommendations. He lamented that FAAN has adequate security equipment but no enough personnel to man them. He also stressed that FAAN security personnel is not getting enough training to prepare them for the security challenges facing air travel today in the world. So, the new Minister must have to address this challenges urgently to ensure the airports are secure.

Another major challenge with airport security is the tradition of extortion of passengers by security operatives. This obnoxious activity is as old as the Murtala Muhammed International Airport, Lagos. As long as passengers could bribe security officials, the airports will continue to be as porous as ever because those with dangerous goods and possible incendiary devices can always pay their way in and out of the aircraft. Aviation security official told THISDAY that extortion or soliciting for money has been an intractable problem with security officials

"We have tried severally to stop our workers from soliciting for money from passengers but we have not succeeded. Soon anyone caught by the camera soliciting or extorting money from passengers will be sacked," the official told THISDAY.

So, bringing an end to these nefarious activities, should be a major task before the minister.

Cost of Operation

The new Minister must have to convene stakeholders meeting, especially with the airlines and hear their grievances and suggestions on how to improve the industry. He must look at the charges the airlines pay the agencies, the cost of aviation fuel and the cost of insurance.

For Nigeria to have viable aviation sector that could generate revenue for government, domestic airline operation must be a profitable venture. So the minister must look at the possibility of providing the airlines single digit, long term loans. Also, the new Minister should kick-start this. The airlines have been longing for such remedy and it is possible; it can be done if this government has the will.

The airlines do not want to be given bailout; they want access to loans at low interest rate and they emphasise that loans to airlines is always long-term because the industry has very low profit margins. But in Nigeria, the banks may not have the wherewithal to lend such loans, except with the intervention of government, which will work a win-win situation between the airlines and the banks. Bank of Industry can step in here to help broker such arrangement.

The new Minister must also resuscitate the Customs waiver policy, which the federal government signed in 2013 and which stipulates that airlines should not pay customs duties on aircraft and spares. That takes a huge chunk of airlines revenue and it is only in Nigeria that airlines pay such duties. Knowing the important duties of airlines government gives them a lot of incentives because they do not make soar away profits. Such incentives include Customs duties waivers. Customs had argued that the waiver is a yearly thing, which had expired, but airlines argued that it should be a permanent policy, which should be seen as support that government gives to the domestic operators.

Aviation Fuel

Many in the Nigerian aviation industry describe the prevalent situation as oxymoron whereby the international crude oil prices is in its lowest in the last couple of years; yet, prices of aviation fuel is still very high in Nigeria. Why are the prices of aviation fuel, known as Jet A1 in Nigeria not reflecting the prices in the international market? The new Minister must have to tackle the cartel that keeps aviation fuel going up in order to bring down the prices. Lower fuel prices will do a lot of good to airlines. It is said that cost of fuel adds about 40 per cent to the total cost of airline operation. With lower prices that cost can come down to 30 per cent. This will enable airlines make 10 per cent profit.

President of Sabre, Network West Africa and also President of Aviation Round Table, Gabriel Gbenga Olowo explained why airlines fail in Nigeria.

"Commercial airline failures in Nigeria given my uninterrupted watch for over four decades is majorly due to the very hostile business environment, (this is supported by recent World Bank report), deficit infrastructural development, none professional bureaucrats in government whose machineries are inversely related to business and finally ownership where corporate governance does not operate. One man calls all the shots resulting in multiple decision errors and business collapse," Olowo said.

He also pointed out why government got it wrong in the aviation industry in the past years.

"Principally from inconsistent policies coupled with the bureaucrats in government without clear objective for the sector. The bureaucrats in aviation department of transport with most successful economies are senior and retired aviation professionals from various sectors. We turn our retirees to rejects and let them die with their wealth of experience. We position contractors and praise singers to shape our future and destiny instead."

So, the new Minister must have to look at airline ownership and management; the policies from government, which some of them could be self-serving and retrogressive to the growth of the industry. The aviation sector could be a huge revenue earner to government, depending on how it is managed.

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By 9jatravel / Administrator, bbp_keymaster

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on Nov 22, 2015

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