DEMOCRACY @ 11: HOW HAS AVIATION FARED?

The last eleven years of democracy in Nigeria and the industry in particular in the hands of the ruling party (PDP), has been a period of little gains, with some inherited pains that was woefully managed, a good example is the liquidation of Nigeria Airways. The industry during the military era was excruciatingly held down by the government in all facets with little or no private participation. Where private participation was encouraged it was sown in selfish interest and doused in a cocktail of corruption.

The democratic government encouraged public and private participation (PPP) in our airports which gave birth to the new terminal which is errorneously referred to as an airport, the MMA 2, other, ancillary concessions within the aviation industry, though contentious are Pan Express and Maevis/Unisys revenue capturing programme.

Unfortunately, they are still thinking of what to do with the other airports, perhaps this must have contributed to the reversal of the Abuja Airport concession package. The last Aviation Minister adopted the airport clustering concession programme, while the present Minister has quietly side stepped the issue in preference to an apologetic approach to embarrassing blunders. Interestingly, different states in the country have contributed more to airport development during this period in comparison to the Federal Government. States such as Cross River, Rivers, Imo, Gombe, Akwa- Ibom and Katsina should be commended for their contribution. The Industry also appreciates the efforts and welcome plans of states such as Delta, Niger, Anambra and Lagos if Bi-Courtney permits. The government of Ogun, Osun and Ekiti states should have a re-think on their proposed airports considering the present under-utilization of neighboring Ibadan and Akure airports which is less than an hour drive.

The Federal Airport Authority of Nigeria (FAAN) cannot give the country the millennium airports we desire. All we have seen in the last eleven years is stitching and patching of our airports, which is normally preceded by awarding contracts, closing of the airport and soliciting funds, from the domiciled state or the Federal governments. Therefore the PPP is certainly the best option right now; it must be transparent, open and must involve the viable and non-viable airports.

The Industry witnessed government ceding her shares in the National Aviation Handling Company (NAHCO) to make it a private organization, while a catering outfit ASL came on board to fill that critical and profitable catering vacuum in the industry. It is noteworthy that NAHCO and ASL are the only aviation related organizations listed on the Stock Exchange. Sky power Aviation Handling Company Limited (SAHCOL), the only company competing with NAHCO was successfully privatized after going through a chaotic process. The comatose state of Government owned Sky power Catering & Hotel Services (SKYCATER) is an embarrassment, the organization with assets spread across the country is a glorified “mama put”.

There was a high turnover of ministers and accompanying heads of agencies with the presidency reshuffling his Cabinet and new ministers in tow restructuring the agencies in line with Government or self aspirations. The restructuring has bloated some organizations within the Industry as politicians need to satisfy their Godfathers who send relatives and friends to be employed and given contract.

The Nigerian Meteorological Agency (NIMET), Accident Investigation Bureau (AIB), Nigerian Airspace Management Agency (NAMA) and the Nigerian Civil Aviation Authority (NCAA) were granted autonomy, while a Civil Aviation Act was passed into law to empower the regulatory and oversight functions of NCAA.The Government owned institution responsible for civil aviation training in Nigeria, the Nigeria College of Aviation Technology (NCAT) was revamped during this period and has been graduating pilots, hitherto young pilots spent years without seeing an aircraft. The institution returned to life and somewhere along the line, the nation was informed that a reputable technical partner was ready to manage and improve facilities in the school. As usual the partner never surfaced. Recently, the school increased tuition fees to N7 million naira. This was done, in spite of the support given by domestic airlines, states and Federal Government, who have all sponsored students and sometimes given financial grant to support the school. NCAT should have a rethink before they start losing revenue to the numerous and internationally recognized schools in South Africa. Alternatively, the Kwara State Government owned, or supported International Aviation Training School should quickly come on stream to give them a run for their money and also save numerous Nigerians the stress of visa processing and naira conversion in a depressed economy.

The nation witnessed a rash of embarrassing air crashes, starting with EAS in Kano in 2002. After some years came the Bellview crash, thereafter Sosoliso in Port-Harcourt with about 68 children on board. We thought we were done with mourning, when the even more embarrassing ADC crash in Abuja happened. The crash took the life of a prominent traditional ruler and other dignitaries. A revamped NCAA brought the lull, with relative air misses; air-return and other related hair raising incidents in a crash fatigued society. We will also not forget the military plane that crashed over the hills in Benue State, taking a fine breed of Military Officers and the B1600 that disappeared en-route the same Obudu Airstrip the military plane was heading.

On the legislative aspect, the house was able pass the Civil Aviation Act that empowered NCAA to perform & act on safety sensitive issues, the domestication of Cape Town Convention that grant access to financing for aircraft and other high-tech equipment. They were also able expose the classy fraud in the safe tower and Abuja runway projects, tackled the greedy fuel marketers and the privileged concessionaires who have refused to remit or are it the other way round as being claimed by one of them. They need to churn out bills that will protect or strengthen our carriers and equally stimulate flights to different airports within the sub-region, with bills on essentials air services, ownership clause, fly Nigeria act and protective bilateral agreements. it is not a favour but a norm, the legislature needs to be a bit proactive.

The government also stunted the growth of our domestic airlines on the international route by deliberately giving out frequencies, capacities and multiple destinations under the guise of commercial agreements that in return gave them a certain amount of dollars, kept in an escrow account, which became contentious for some time until very recently.
Our carriers have been able to prove their mettle on the west coast but on the international scene the foreign airlines are having a field day with relentless assaults on Lagos, Port-Hacourt and Abuja airports. Also the government went ahead to sign dual designation and open skies with the British and American government, when it was quite obvious that the country was not ready to service these routes effectively despite the five year grace.

In this democratic period, the charter segment has been robust. Private organizations, states and the different tiers of government charter aircraft for retreats and other trips within and outside the country, other sundry reasons, such as weddings, meetings, burials, launching, conventions, elections, electioneering campaigns and our peculiar mess called electoral re-run that are spread across the different geo-political zones. The boom in the charter market is presently being enjoyed by registered operators, private operators and the Presidential Air Fleet (PAF). Suffice for the registered operators the others should not operate commercial charters. NCAA owes us an explanation.

The PAF added a controversial brand new 737 aircraft to their fleet during this period, queries regarding the date of manufacture and initial owners as listed on Boeing website, led to some journalists spending the night in Kuje prisons. The government told the nation, while introducing this aircraft that older aircraft in the fleet would be sold or auctioned. After selling one of the aircraft to a PDP chieftain the process was discontinued, the others are surreptitiously participating in the charter market by flying governors, ministers, top politicians and traditional rulers to destinations within and outside the country at a fee. I sincerely hope they are being regulated by the appropriate agencies and also paying related charges to FAAN, NAMA, NCAA and FIRS as other commercial operators are made to pay.

Private aviation also experienced a boom as super-rich business men, top bank executives and some supersonic general overseers of our home grown new generation churches who have not been melted by the economic recession or harassed by EFCC joined the fray in owning private jets. Most of these aircraft are wet leased, registered and crewed by South Africans, so the financial and employment benefits go to South Africans while the bloated ego goes to Nigerians; the NCAA even compensated them with the necessary waivers, to stay perpetually.

There were some policy reversals such as the submerging of the Aviation Ministry into the Ministry of Transport, which was later reversed, cancellation of Abuja Airport consession rights, banishment of Virgin Nigeria and Arik from operating local flights from the international airport and the cancellation of South Africa Airways technical partner right for the still birth national carrier, which was later awarded to Virgin Atlantic. The democratic government inherited and continued the tradition of commissioning partially completed projects such as the domestic runway in Lagos and Port Harcourt International Airports and the TRACON project.

On air navigation, the democratic government granted autonomy to the Nigeria Airspace Management Agency (NAMA) as a result of a process initiated by the last military regime and completed by the Obasanjo Administration. The Agency is often times bogged down by persistent internal intra union squabbles which can be attributed to the organization’s low level of information technology and skewed staff strength where the Air Traffic Controllers, who provide the services that generate the revenue for the organization are just about 20% when compared to their counterparts in similar organizations.

Also, the democratic Government was able to provide funds for the modernization of the control towers and total radar coverage. Unfortunately the Nigerian factor creped in when the smooth talking NAMA Managing Director at that time, his bemused Professor Minister and his successor decided to fleece part of the funds through a confused Austrian consultant, the case is still pending before a high court. Also equipment for the total radar coverage wasted so much time at our ports that NAMA management had to go cap in hand to the Federal Government to beg for waiver on port and custom charges

On consumer protection and the need to protect Nigerians came to the front burner as the NCAA was not only seen, but heard tackling airlines that breeched consumer rights. Unfortunately they have refused to tame the “Big 3” on the local front, who has consistently turned deaf ears to passenger complaint. Also, the Industry will not forget the positive aggression and verbal ambush of the Chief Fani-kayode, who during his short tenure increased airline capitalization, maintained a no-nonsense attitude to the plight of Nigerian passengers and airlines which literally put the foreign airlines in check.

The national carrier, Nigeria Airways was liquidated after failed attempts to start a new airline within the company, even with the technical assistance of the International Monetary Fund (IMF). The advisors to the government then, the IMF, left almost immediately after refunding the four million dollars paid for consultation as the government was not ready to listen to any advice contrary to liquidation. Thereafter, all efforts were geared towards starting a new national carrier, which also failed. Today, we have flag carriers who are struggling to respond to the challenge of a national carrier by improving and expanding their fleet, heavily laden with debts, not supported with luxurious public travel funds and often bedeviled by the single owner- manager syndrome which has made it difficult to garner the necessary national and legislative support usually reserved for flag carriers. The government also, introduced a recapitalization process that threw paper airlines out of the system, while those with safety problems vanished in the face of a revitalized and bold Nigerian Civil Aviation Authority (NCAA) and have since been replaced by airlines such as Dana, Arik and Virgin Nigeria Airways.



In closing, we should not forget that some legacy Nigerian carriers, such as ADC, Sosoliso, Bellview, Capital, Afrijet went bust during these period due to safety or economic reasons, annoyingly, one of them leased two 30seater aircrafts, rented a three storey corporate head-quarters for their leased thirty passenger aircraft operation, bought SUV’s and other cars for management, eloped with the millions of naira collected from a state in the north with a promise to operate schedule flights and equally had the temerity to ask for a state bailout.

it was a surprise to hear that our local operators can key into the N500 billion naira bailout funds to be released soon by the Central Bank of Nigeria (CBN), while appreciating the initiative, though inadequate, considering the initiative is primarily to protect the Nigerian banks who are being owed billions of naira by the airlines. We need to go further by keeping the public travel expenditure with our flag carriers, therefore we must initiate a Fly Nigeria Act.

Airport Privatization: Going Round in Circles

The news filtering out of Abuja this week, that the government is dumping airport concession for privatization is simply ludicrous.

The government that have not been able to manage the rancorous public private participation (PPP) effectively, with the objective of capturing and sustaining a regular stream of revenue with improved services for all Nigerians now want to cede the airports to the same individuals to own. This is a recipe for disaster or misadventure for the proponents of this idea.

The concessionaires who have refused to remit to government despite an act and a board supporting Infrastructure Concession Regulatory Commission (ICRC) will definitely be uncontrollable in a privatized environment. Government is a process, therefore the penchant of having my own programme by different appointees who are easily ambushed by self serving advisers, experts e.t.c, without thoroughly assessing preceding programmes is simply retarding aviation development.

The federal government have refused to invest in our airports just like they have done with the airlines, therefore to reduce and permanently stop the embarrassing ambiance in our airports with the usual apologies, stiches, patches and solicitation of funds from states and other agencies as presently being witnessed, the government should either concession the airports using the regional clustering as espoused by the Capt Dele Ore committee’s in their report or undertake to bundle all the airports, simply put, concession FAAN in entirety.
We should avoid another hasty mistake like the liquidated national carrier; right now we are being challenged to get a replacement, considering the private carriers have not been able to assert themselves.

The challenge before the government should be, how to keep at least 50% of N54 billion recently appropriated for public travel with Nigerian carriers and reducing wastage through appropriate sanctions and legislation. The Nigerian football federation (NFF) took the super eagles to London from Abuja, after the dinner with Mr. President on British Airways, when Arik a Nigerian carrier is flying on that route with low public expenditure patronage. In furtherance the NFF chartered a foreign carrier to lift the team to South Africa while compelling the airline to paint the aircraft in Nigerian colours. The charter failed and the tax payers will be losing N74million, when Virgin Nigeria that is IAOSA certified has aircrafts with Nigerian colours and Nigerian boldly written for all to see even in the dark.

RE: STARVING THE AIRPORT MANAGERS OF RUNNING FUNDS

It very true the airports are generally staved of these funds. Why the management introduced this option is not too clear. Are the managers misappropriating this fund or is FAAN not having the requisite funds to disburse to the airports as done in past?

The unviable airports are in dire state, as their managers owe contractors and other utility bills that have necessitated some them to switch off their phones for fear of creditors or practically run the airports from hideouts within the airport vicinity.

The government should simply fast track the airport clustering concession process as opined early this year, is the best option out of this malaise; the present apologetic posture without a clear cut programme for our airports, will be heard but not taken seriously again.

In the interim FAAN should release funds to clear the outstanding debts owed by the airport managers, improve synergies between its directors and review the archaic civil service procedure with attendant documentation, when dealing with operational issues.

UNTOUCHABLE CONCESSIONAIRES: FAAN’S BELATED TEARS

It is fair enough to exonerate the present management of FAAN, considering they were not there when the deal with Bi-Courtney, Pan Express and Mavies were signed, but they are culpable for looking the other way while the bills accumulated to billions of naira. It is also, not a surprise to see the belated tears at the senate, the surprise we can get now, is if the federal government through the Infrastructure Concession Regulatory Commission (ICRC) can bite and prove to Nigerians and prospective investors there is a regulatory and legal frame work in place covering all government concession programme.


By setting up ICRC backed by an act and a board, the government has made it clear that it is taking a concessionary posture through the public private participation (PPP), therefore the regulatory and monitoring roles of the commission that should be enamored, seems weak with a clear disconnect with the government agencies involved in concession.

Looking back at the fraudulent N64 billion runway contract, you begin to wonder if the Due Process Unit(DPU) went to sleep when the files got to their office, for the Bureau of Public Procurement (BPP), the body should just be scrapped considering the lame defense, given at the height of public outcry, another committee the Presidential Project Assessment Committee, has just sliced a whooping N13.5 billion from the contract that restricted bidders but passed through, the purported due process of DPU,BPP,FAAN and the Ministry. Luckily, the presidency has finally “shined their eyes”, to acknowledge that all government contract are about 30% higher when compared with other climes, let see the outcome of this numerous committees before 2011 election.

It is so painful so see that politicians appointed as ministers went ahead and signed agreements and addendums that have come to haunt us just like the Virgin Nigeria story.ICRC should live up to their responsibility, by re-knotting all knotty concessions in the industry and Nigeria in general. Monitoring and regulatory responsibilities require some toughness; the body should consider having experienced sectoral personnel to assist in handling the different concessions in the country, while at the same time introducing some fines or penalty for defaulters.

The Indian government has concession their airports and equally set up an independent body to regulate and monitor the concessionaires, the body introduced “liquidated damages”, which literally wipe defaulters in line. Public interest must be protected while revenue must seen going to the governments’ till, in a concession.

N500 billon CBN bailout fund

Well I will prefer having a stand alone account for the industry, so airlines and other service providers can directly tap into it without competition from other sectors.

In my view, it is just the first critical step which principally is directed at saving the Nigerian banks being owed by the carriers, considering the CBN is putting emphasis on refinancing of loans. We must compliment the bailout by ensuring domestic airlines that will benefit, pass the re-certification process of NCAA, prepare to accept a regulated consolidation regime, which naturally expand ownership and a necessary stimulus for coveting the juicy public expenditure travel that are naturally reserved for national carriers or flag carriers with national ownership in outlook.

The Russian, Chinese, Indonesian and Indian government have done it in the recent pass for their local carriers why are we different. Ironically, the private operators who objected to the bailing out of Nigeria Airways with empty boast of providing better service have all gone bust, while those still operating are limping critically to this fund for lifeline.