Uko: Direct Flights to the US Have Benefitted Passengers

Despite the criticism of the open skies agreement signed between the US and Nigeria, travel expert, Ikechi Uko said direct flights to America have benefitted Nigerian passengers, saving them time and money. He spoke to Chinedu Eze. Excerpts:
What do you think that the average Nigerian traveller wants in terms of his choice of airlines and his expectations?

I have seen what happened with the direct flight between Nigeria and US. You know, people will ask, what are the benefits of open skies agreement between Nigeria and the US? And I am disappointed anytime I hear somebody make such statement. If you were a traveller in Nigeria before American carriers started coming here, and now they have started coming, there is a whole lot of difference. First you save flying hours, like 10 hours difference flying through Europe and flying directly.

Secondly, the prices are now competitive; sometimes you will see the flight being advertised for less than a thousand dollars; it never happened before.

So, open skies have been very beneficial to the Nigerian traveller, it is actually the best thing that has happened. And this explains to me the mentality of the Nigerian traveller; the Nigerian traveller wants good service at a reasonable price with very little hindrances. He doesn’t need to fly through Europe; he doesn’t need a transit visa.

So, the way Nigerians traveller responded to direct flights to America tells you how the Nigerian traveller will respond to a national carrier if the national carrier meets his expectation. So, what the Nigerian wants, from my own experience, from other African carriers, is that the Nigerian traveller wants you to get him there fast on time, bring his bag with him and when you wrong him, say sorry. Just a little apology solves all the Nigerian problems.

A cabin crew on a flight told me that there are two types of people-the yellow Nigerian who he said are Indians and the black Indians who he says are Nigerians. To the Indian and the Nigerian, money is important to them, pricing is sensitive and they demand a lot when they are paying you. But the difference is that if you wrong a Nigerian he accepts an instant apology and let it go. And the other people would hold you responsible for your error. And the cabin crew explained that the Nigerian might not be very polite, he wouldn’t say please like the Ghanaian, the Zambian and probably some other people, but the Nigerian makes all the noise but he is the best passenger to carry.
This is a cabin crew who has flown all over Africa and all over the world. He says the best passenger to carry is a Nigerian. He comes out very bold and demanding but a little attention dissolves all that aggression and once you give him what he wants he is loyal to you. So these two things tell me that the Nigerian will support its own national carrier. The Nigerian might not be as flag conscious as Ghanaians, Kenyans and South Africans but the Nigerian supports his own if he thinks his own depends on him to survive.

As a new government is coming in, what do you think can solve the Nigerian airline problem both for domestic and international operations?

It is unfortunate that for the amount of Nigerians that travel all over the world we have only seven or eight Nigerian carriers. And out of that probably only Arik has up to ten aircraft. And comparing them with the other players in Africa none actually can compete without the support of government. So, for me, Nigeria needs a major airline, we can have the biggest economy in Africa, the largest population and our biggest airline is struggling. Why can’t we put the power of Nigeria behind an airline? That is why there is the need for a national carrier.

Aviation has proved to be a catalyst for national development; at least the Gulf countries have proved that to us. So, I think that we deserve to have a national carrier. The new government can solve this problem for us quickly. If they have to depend on opinions of some stakeholders, we will still be at the place we were many years ago. And I will give you a good example, seven years ago Obasanjo privatised the refineries, Nigerians called and shouted and went on strike and that sale was reversed. Eight years after Nigerians are regretting that decision. But who led us on the part; it is stakeholders in the industry, the unions, TUC, PENGASON and NUPENG told us that we can maintain our refineries that we don’t need to privatise it.

The same thing happened to NITEL; Nigerians opposed the sale of NITEL. Recently NITEL was sold for scrap. The same thing happened to Nigerian Airways and privatisation, the unions opposed every improvement in Nigerian Airways, at the end of the day everybody regretted it. So, I have seen that once a new idea comes into an environment, there are people whose job is to oppose it, these people, to me, are anarchists. And if government doesn’t show will to go ahead with their own plan, down the line everybody regrets it and the country loses.

Do you know how much Nigeria lost with the failure of NITEL? We had a satellite back bone, SAT 3 which became almost useless and that was the first cable in West Africa. While they were still comatose, Main One had to lay their own cable. WACS had to lay their own cable; meanwhile, the premier cable into Nigeria was from NITEL. So, the national carrier project is similar to what has happened to NITEL, Nigerian Airways and some other projects. There are people who are anarchists and they have very high opinions, they are what we call well established charlatans, they like to hear their voice.

DSC 0192 Uko: Direct Flights to the US Have Benefitted PassengersAnybody who goes back to the people who led the strike in 2007 when Obasanjo privatised the refineries will find out that it was the leaders of that strike that came back in 2012 to demand that Jonathan should not remove subsidy. Meanwhile subsidy was as a result of their failure, they promised Nigerians in 2007 that we will solve the refineries, they don’t need to privatise them. But four years after the same TUC, PENGASSEN and NUPENG led a second strike against subsidy removal. And today we have made no progress, so we are having the same thing happening in aviation. There is a group of people that opposes any new idea even when they have no alternative.

Why many Nigerians oppose a national carrier is because they believe government cannot run a successful airline. What is your view?

We have to admit there are things they do very well and things they don’t do very well. Now, Virgin Nigeria was the best attempt of running a modern airline. The managing director was a Nigerian, the flight operation director was an Ethiopian, the commercial man was a Kenyan. He came from Kenyan Airways the other man came from Ethiopian Airlines technical partners. It is in admission of the fact Nigeria didn’t have that capacity, that you have to take an Ethiopian and a Kenyan. So, if you want to set up a national airline that would flourish, you have to also get people from other African countries that already have the experience.

You don’t need to reinvent the wheel, you bring people who already have the skill and ask them to help us do this. A Nigerian can be the MD; you go into a technical arrangement with Ethiopian airline. Rwand Air is the shining star of Africa aviation; it is a smell airline with 12 aircraft but Rwand Air if punching far above its weight. The Chairman is the former MD of Ethiopian airline and most of the other people there they hired from Kenyan Airways. These are people that have proven themselves competent in Africa. So if we want to create a national carrier and run it by ourselves we will run into trouble.

How do you see the planned implementation of open sky in Africa?

For me the earlier we do that the better for us. If we have open sky for Africa it is easier for Nigeria to lean on an African airline than to lean on a Gulf carrier. If as it is happening now without open sky, the Gulf carriers are already carrying 80 per cent of passengers in Africa. And in the next four years without a response from Africa they will take it up to 90 per cent of the passengers in Nigeria if they are not already doing that. There are three gulf carriers into Nigeria and the only airline that is competing with them is Ethiopian Airline. There is no other competition from any airline. They pushed Arik out of Dubai; that tells you the power of the Gulf carriers. So, without open skies in Africa no African airline might survive, probably only two.

Nigerian airlines believe that open skies Africa will undermine their interest, do you agree?

Is any Nigerian carrier competing now that there is no open sky? Is Arik competing, is Medview competing? Is Aero competing? Is Air Peace competing? So, none of them is competing. Do you want to hold things down until we are able to raise the capacity? That will be in how many years’ time? At which point will a Nigerian carrier start competing? There was a story published by a Nigerian newspaper which we used and it was read somewhere in East Africa and the story was that Nigerian airlines might not benefit from open skies so Nigerians should not support it.

A Kenyan woman responded by saying, why do pigmies want to measure height about which one of them is taller. No Africa airline can compete with the Gulf carriers but we are more interested in if our neighbour is benefiting. I also read a similar argument by a Uganda newspaper, which asked why is MTV award only about Nigerian and South Africa musicians? The newspaper said other countries should block DSTV from promoting Nigerian and South African musicians. This is because in the area entertainment, Nigerian has a comparative advantage.

This is why Africa doesn’t make progress; you want to prevent your brother from making progress, and what now happens is that other people will come in. Somebody responded to the newspaper that if we block Nigerian artists do you have an alternative. The only alternative you have is Jay Z. It is the same way that the Gulf carriers are now controlling 80 per cent of the flight out of Nigeria.

So the 20 per cent that other African countries benefit from is a source of annoyance to us. We don’t even want them to benefit from it. I don’t see the logic when Nigerians oppose other African countries; those people stand a better chance of rewarding you than the Gulf carriers who give you nothing. So our eyes should be focused on the gulf carriers; the same way Americans are responding to them. I am sure you know about the on-going war between America and the Gulf carriers, the Gulf carriers have eaten up everybody’s market. So Nigerians should not border about pigmy airlines in Africa, Nigerians should worry about the giants who are dominating our market, who take 80 per cent of our business.

In terms of revenue, manpower, infrastructure, what are we losing by not having strong airlines?

First of all you ask yourself what is the available revenue? It runs in billions of dollars. Just the BSP platform alone delivers more than a billion dollars per annum and BSP (Billings Settlement Plan) is for less than 300 agents or 500 agents at most. So the other agents who are not on BSP, other people who are buying from other places that are not on BSP means that that figure may be double. So a-two billion dollar business should not be left like that, it is a strategic part of our economy. Some airlines contribute close to four per cent of the GDP of the country.

If we had a viable aviation environment, you are talking about employments of hundreds of thousands of people. So, for me I see anybody who is against national carrier, who is against open sky as an anarchist because they have no alternative. If you say this is not good because it is going to benefit Mr. A what is your alternative that will benefit you? So as at now Arik is going through a gun battle with a knife. It does not have the funding and the strength to compete with these carriers unless the federal government of Nigeria can assist.

How do you think Nigeria can improve its aviation sector and boost passenger movement?

To me the first thing to do is to give Lagos a fantastic airport infrastructure, complete the new terminal like yesterday. Lagos airport is like an old woman that puts eye shadow, her eyes might look nice but if you look beyond the eyes you will see that age has caught up with her. The Lagos airport the last Minister tried in doing some pancake but it is just a face job. So the first thing is that you need airport friendly terminals. Then national carrier is something I will give all the attention to because I have seen aviation transform countries. I have seen aviation turn Dubai into a global city; turn Qatar into a country with pool. I have seen small African countries like Rwanda compete where giants like Nigeria can’t. So my two points of focus are national carrier and airport infrastructure. Considering the fact that the Nigerian Civil Aviation Authority (NCAA) has maintained high regulatory standards in the past six to seven years, I don’t think that is a major problem now.

How do you describe the West African market?

The West African market has collapsed and I think Ebola should be held responsible. What Dr Harold Demuren (former Director-General, NCAA) once said at an event we organised was that West Africa ought to be a domestic market where every airline in West Africa is allowed to move around. And Ghana is the only country in West Africa that runs an open sky in aviation. Anybody that applies to Ghana Civil Aviation Authority (GCAA) gets approval even to do fifth freedom. That is why Ghana sometimes claim they are the hub or the gate way. They run an open aviation environment. So, West Africa with close to 300 million potential passengers, over 40 airports, 15 countries running as a domestic aviation environment will transform the economy of the country.

Somebody who lives in Port Harcourt and needs to go to Takoradi, the oil city in Ghana, has to fly to Lagos, fly from Lagos to Accra before he goes to Takoradi. That is four flights, with airport taxes and overnight stays. So, for what could be a $200 trip, it costs him $700 plus hotel accommodation.

So, with an open sky an airline can deploy flights to the four oil cities in West Africa, Libreville, Malabo, Port Harcourt to Takoradi. So, most of the oil companies have operations in those four places, so an open sky in West Africa is a game changer. It will transform the economy of West Africa tremendously. It will transform West Africa into a power. What we are saying is that Nigeria’s GDP might become the first trillion dollar GDP by 2030; we might actually make it by 2025 if we take advantage of the business in West Africa.

If Nigeria says open sky in West Africa is our area of concern then I agree with that. Let’s deal with that before we go into Africa. But if we do nothing we will get carried by the flood. And part of what I am trying to do with Weizo is to bring all these people to discuss that. There is an event we are putting together in Ghana in July 10, 2015 which talks about seamless travel in West Africa. We shall bring the International Air Transport Association (IATA), all the airlines, civil aviation authorities to deliberate on this.

Why can’t we move around easily in West Africa? West Africa was the first region to start free movement and since then West Africa has made no progress. Now, in East Africa you don’t need a passport to travel within East Africa. Expatriate are free to move around once you leave in one country, you just need your national ID card. You take one visa you can visit three East African countries, they are racing far ahead. They have done what they call northern corridor; they are trying to move GSM to have the same charge in the whole of East Africa. They are trying to combine their economy which was what EU is all about, which is what America is all about. We started the race in West Africa but we got shot down we have been stuck at where Gowon and Dauda Jawara started till today.
So I think it is about time that West Africa moved forward and aviation is easier to do that than others.

How can government enhance this desired change in Nigerian carriers?

Something has to be dome for Nigerian airlines, government has to assist. The airlines are at the height of their power. Arik is at the height of its power, it can only grow gradually. The way Arik came, it came with power and established its reputation but to go beyond this Arik needs a little push. Instead of everyday the Federal Airports Authority of Nigeria or the Nigerian Airspace Management Agency or somebody holding Arik down, government should find a way to assist the airline. Arik has issues, but today it is the only eye we have. We can’t treat Arik as a private airline, as at today it is our flag carrier. Arik has to be assisted one way or another, then if Air Peace improves and Medview improves they can expect government assistance. If we allow them the way they are growing: three will start today, two will disappear tomorrow, they will keep going in such sequences and nothing will be achieved.

Are you suggesting that they should be given tax waivers?

We once asked the MD of Ethiopian Airline why domestic flights are less than $40. And he said it is the CSR of the airline to the country. This means the country subsidies some things for the airline so the airline can charge bottom flight tickets for domestic routes. So if we want Arik and these local carriers to serve us and serve us well, they need to have some kind of rebate. The government has to either ignore some things as a way of assisting them. There has to be some grandfather rights as a son of the soil. The Nigerian National Petroleum Corporation (NNPC) has some advantages when it comes to lifting oil. So, I think these airlines deserve some kind of support.

What do you think government should ask them to do?

For me the local airlines are already doing what they ought to do, which is provide service. The service they provide is a necessity it is not a luxury. And if government sees that as strategic, government could say okay for you to benefit from tax relief then you have to comply with our consumer protection law. Now, that becomes the carrot that enables you to use the stick. What carrot are we giving them? The only carrot you give them is to license them. But you licensed all the other non-Nigerian carriers, so you have to give them something. If you give 50 per cent slash on aviation charges for them, you have given local airlines something, they need to compete.

Do you think Nigerian airlines can establish themselves and operate efficiently so that they will code-share with international carriers? 

It was happening with Virgin Nigeria. Virgin Nigeria had code-share with Delta Air Lines; ET had code-share with everybody. Because those other ones were not flying to all the West Africa destinations but Virgin Nigeria was flying. Three things are necessary-if you don’t do it by fiat which is fly Nigerian Act, you could do it by visa on arrival and transit visa, which means anybody going anywhere in the world once you have your onward visa you are allowed to pass through Lagos. Those are two things you could do. If you now declare that West Africa is open sky for these Nigerian carriers, Nigerians have the capacity to dominate because we have eight viable airlines.

So, each one can choose an area, Ghana, Gambia, Cameroon and the rest but without transit visa or free visa, that’s if you have onward destination, you can pass through. And you do visa on arrival for everybody. These things automatically will transform the fortune of Nigerian carriers. At least we have an example; Virgin Nigeria was doing efficiently well with Gambia. It took like two days for people coming from Switzerland and most parts of Europe to get to Gambia but with Virgin Nigeria you take a flight with Air France, you land at 6pm, Virgin Nigeria leaves at 9pm to Gambia. So you leave Switzerland the same day and arrive Gambia the same day. Most of the hotel managers in Gambia were transiting through Lagos when Virgin Nigeria was operating because they were able to fit in with their flying schedule.

Do you share the view that Nigeria will soon develop into a hub?

I heard something on the news that ECOWAS has just passed a law that every ECOWAS country must have a flight into Abuja. And that is what AU did with Addis Ababa. That Addis Ababa should be connected to every Africa capital and Ethiopian airline has done that. It has connected 49 African cities to Addis Ababa. So why Nigerian carriers can’t take advantage of that and connect every ECOWAS capital to Abuja. That automatically guarantees business for Abuja. Abuja airport as it is today is efficient airport. So, if the new terminal is opened then you can do that but for me, it is one of my worst airports in Nigeria, it is completely inefficient.

How do you see the rival between Ghana and Nigeria?

It is because Nigeria has refused to improve its own ability; that is why there might seem to be a rivalry. Nigeria does not compete with Ghana in anything. The largest airport in Ghana is ranked number 4 if it comes to Nigeria. Kotoka carries less passengers than Abuja, Lagos and Port Harcourt so Kotoka cannot compete with any Nigerian airport. But because the regulatory environment in which Ghana plays positions it better. It gives people open skies, people have fifth freedom right, Kenyan Airways has fifth freedom out of Accra, Egypt Air has fifth freedom, Turkish Airline, Emirates. So, it is easy for anybody to come and play.

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on May 26, 2015

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