AVIATION INVESTMENT THROUGH POLICY: GOVERNMENT PERSPECTIVE

As I take a second look at the topic assigned, I found it amusing that l am being invited to speak from government perspective! It looks like an awkward assignment. However, as often happens there are some good in seemingly unusual circumstances. The Ministry of Aviation is charged with the overall responsibility of managing aviation in the country. It is empowered by the Nigerian Civil Aviation Act of 1964 to make policy and regulate air navigation, air transportation, airport development and maintenance, provision of aviation infrastructural service and other needs of the aviation industry. the Civil Aviation Act 2006 part 1, Section 1 also states that; “The Minister shall be responsible for the formulation of policies and strategies for the promotion and encouragement of civil aviation in Nigeria and the fostering of sound economic policies that assure the provision of efficient and safe services by air carriers and other aviation and allied service providers, as well as greater access to air transport in a sustainable manner and to assist with ensuring that Nigeria’s obligations under international agreement are implemented and adhered to.” This event is as an opportunity to indicate the direction our policy should take for meaningful aviation investment in the Nigeria. In doing this it is we must kick start it with these mantra: Analysing past policy documents, identify the positive impact they have made and highlight their deficiencies. Set a timeline for review of the document Consult and engage Stakeholders across board Will power to implement by the initiator and those for whom it is made It is also pertinent to highlight parts of the existing legal framework that supports the regulation of the aviation sector in Nigeria as a concretization of government policy at a given period of time. By so doing, such laws especially the Nigeria Civil Aviation Act 2006 would require some tinkering to accommodate policy pronouncements, developments in the industry as well as modification of regulations in accordance with current global best practices. Policy formulation and implementation does not follow the orthodox perspective as a deliberate system of principles to guide decisions and achieve rational outcomes. It is a statement of intent and it is implemented as a procedure or protocol.In other words, it is the general principles by which a government is guided in its management of public affairs, or the legislature in its measures. When applied to a law, ordinance, or rule of law, it denotes the general purpose or tendency considered as the policy direction. Policy in Nigeria is often the outcome of myopic protection of class interest, ego and uninformed perception of role. Thus, the aviation sector experienced several policies in congruencies, hurtful reversals and unpredictability which have been quite harmful to the development of the sector. Certainty of procedure and activities are the hallmark of aviation. Unpredictability just as applicable to the weather is an undesirable index to the aviator. Perhaps the latest of Nigerian policy documents was the Nigerian National Civil Aviation Policy (NCAP) 2013. Profound critique of this document has been variously made by notable names in the industry. It suffices to say that Nigeria needs a comprehensive general aviation policy that defines the scope of oversight functions of regulatory agencies and sets out guidelines for private sector participation. Efforts should be made to ensure that Ministerial intervention in safety and regulatory activities are reduced to the barest minimum if not out rightly forbidden. Any attempt at formulating or developing an aviation policy as would encourage investment must address the following: Funding of Safety and Security Inadequate infrastructure certification Access to Maintenance Services Rising Costs of Aviation Fuel Taxation The effects of the foreign exchange crisis Safety Regulation Labour Issues Adherence to Terms Conditions of Agreements Retention of “Ease of Doing Business” Implementation of The Economic Regulations Guidelines Respect of Judicial proclamations In order to address the various challenges, the Aviation industry needs an effective policy that will harness its potential and attract more foreign investment, as well as address safety and national security concerns as focal point. Nigeria has the largest economy in Africa, with a gross domestic product (GDP) of $415.08 billion according to the International Monetary Fund's world economic outlook for October 2016. Notwithstanding the contraction in the economy over the past two years, Nigeria remains a major African hub for business and commercial activities. Therefore, the required policy direction at this point in time is such policy as would ensure: Development of new Airports through PPP Deliberate establishment of Maintenance Repair and Overhaul facilities with 0% Customs tariffs including VAT, 5-year tax holiday MRO related transactions, simplified Ports clearance, expeditious grant of land on generous terms Aggressive review of Bilateral Traffic Rights Regional Connectivity Scheme- Tax incentives for all airlines operating on hitherto underserved routes Upward review of Foreign Equity or participation to accommodate 100% ownership to boost FDI. Chile and Australia modified their laws to accommodate 100% ownership of airline and allied business Well articulated but consistent air transport policy is very critical to Nigeria’s long – term development. However, the air transport policy is supposed to be formulated to form part of a transport chain. Aviation had hitherto been treated like a stand-alone rather than be part of a seamless all inclusive transport “Chain”. ALL NATIONS HAVE THE RESPONSIBILITY OF ENSURING THE SAFE AND ORDERLY DEVELOPMENT OF AVIATION

ILS: WE ALL FAILED AND EMBARRASSED THE NATION

The industry went into wild jubilation when the government announced in the last quarter of last year that it had purchased a new set of Instrument Landing System (ILS) CAT 3 to be precise for Lagos and Abuja airports respectively which was installed while the functional CAT 2 ILS in these airports were moved to other airports in the country. The icing on the cake was another announcement that informed of the arrival of a new calibration aircraft for the country to be used in calibrating all critical landing instruments installed in all our airports. We rejoiced because the CAT 3 is an improved version of CAT 2 system which can enable aircraft land at almost zero visibility while the new aircraft will aid safety by calibrating the necessary instrument in all our airports in a timely and procedural manner as approved by the regulator and manufacturers and most importantly reduce the huge cost of calibration that we usually concession to ASECNA which is sometimes delayed due to unavailability of funds. Alas our joy was pyrrhic with the embarrassing situation we found ourselves in recently with international flights being cancelled, diverted or returning to base from mid air. These airlines chose Accra as an alternate and not Abuja. At a stage, Accra could not handle the surge anymore then they diverted as far as Dakar in Senegal. Why Accra and not Abuja? The industry just woke up after 50 years to realise that the alternate airport to Lagos on the chart for foreign carriers is Accra and not Abuja. This has remained unchanged hence the request by Qatar Air to the Ministry to seek approval to land in Abuja. Yet the Ministry gloated on this approval. The silence from the industry in all of these was disappointing. I can remember NATCA the umbrella body of the air traffic controllers voicing out in the beginning but were countered by NAMA management. Thereafter it was the conspiracy of silence from all industry players. The restive unions that will brutalise concessionaires and airlines owing their organizations went mute, the media did not make it a shouting headline, neither did the agencies or numerous experts and professionals, rather we chose to murmur or use the social media to discuss or defend, heaping all the problems on weather and not on us who allowed the ministry and its agencies to simply herd us into this imbroglio. Surprisingly foreign airlines that lost a lot of revenue to the diversion estimated at around $6,000,000.00 also failed to speak up and it would appear, they chose the back end communication channel to save aviation officials and not the industry, themselves or their disappointed passengers. The juicy extra frequency, gauge and points of entries cannot be toyed with hence the blank cheque given to passengers to spend and seal lips thereafter. I hope it works… The passengers who were mainly Nigerians were kept in Accra and Dakar respectively, some were airlifted back to Nigeria, some returned to the country of departure while others found their way by road to Nigeria after being stranded for some days. Some of these passengers fell ill; some were attacked by robbers on arrival in Lagos at the dead of night while another passenger died in the hotel while waiting to board his flight. This is in addition to distortions to flight schedules and missing connecting flights and luggage. What was the industry’s response to the imbroglio? The ministry of Aviation sent out belated concurrent press releases apologising to passengers, heaping the problem on inclement weather and accusing the foreign airlines of deliberately going to Accra as a choice and not Abuja when the chart given says Accra is the alternate. The ministry of Information simply picked the template of the Ministry of Aviation by changing one or two sentences in words while connoting the same reasons as their counterpart. Cherry picked government officials and other professionals also towed the same line in almost all media outlets. The inclement weather being parroted now is harmattan haze which can make visibility poor, that is a fact but landing in poor visibility is not usually an issue, if the airport has the right equipment such as the CAT 3 instrument landing systems (ILS), pilots can secure enough assistance to land safely, even when the visibility is next to nothing, simply put, our instrument failed when it was most needed. It is gratifying to see the Honourable Minister of Aviation accept that some components in the brand new ILS CAT 3 instrument failed hence the problem of inaccurate reading and its inability to function properly after installation, which necessitated the hurried recall of ASECNA which later culminated in the use of the recently purchased calibration aircraft to recalibrate the instrument which happily has been corrected and NOTAM issued. The solution to putting an end to diversion of aircraft outside Nigeria during inclement weather that often leads to poor visibility is simply making provision for functional CAT - III Instrument Landing System (ILS-CAT III) in all our 4 International Airports, presently located in Lagos, Abuja, P/H and Kano. Anything short of that cannot change the situation whenever we have bad weather. The chart given to airlines some decades ago with Accra as alternate should be reviewed to Abuja and Port-Harcourt. The poor oversight on our part to rectify the book was very profitable to the Ghanaians while also causing the foreign airlines and passenger losses and pains. The NCAA should ensure that scheduled and mandatory maintenance and calibrations of the navigational and landing aids in all airports are timely and sustained in line with regulations, considering the last Max Air incident at Minna airport which should have served as a wakeup call. The pilot attributed the incident to the erratic performance of the ILS instrument. The new calibration aircraft bought for the country should be handed over to NAMA and commercialised to recoup funds expended and should also generate revenue for the country while the ghost of the older aircraft flown by late Capt Agbeyegbe should be properly rested with appropriate documentation stating current situation. The Ministry should please hands off from procurements of equipments, announcements of projects or managing of the new calibration aircraft. I could hear the murmuring at the chambers when the MD NAMA was asked the cost of CAT3 installion and he simply said it was only the Minister that can answer that question. Rather the Ministry should focus on policy direction, guiding air navigation, air transport, airport development and provision of infrastructure which is clearly stated in the Nigeria Civil Aviation Act of 1964 and 2006 respectively. We also implore FAAN to urgently fix the runway light on 18L to make it available for night operations while also extending the operating hours of some of our airports. It’s a little wonder that Ilorin Airport which serves as alternate to Lagos shuts down at 1800 hrs while it runs for 24hrs only during Hajj. I align with the proposal for FAAN to handover the runway lighting systems to NAMA let us drop the ego and percevied interest here for Safety and Efficiency. Finally as we tip-toe towards the formation of a strong airline with the acronym “National Carrier” I can only plead with the government to make it a stratum while the strata should be a comprehensive National Civil Aviation Policy covering connectivity, bilateral, fiscal support, maintenance, infrastructure and guided deregulation buried in effective implementation of economic regulations. The Federal Government failed and embarrassed Nigerians in cohort with stakeholders not the inclement weather. Olumide. O. OHUNAYO ●

CONTRIBUTIONS OF A NATIONAL CARRIER TO THE SOCIO-ECONOMIC DEVELOPMENT OF NIGERIA

Why Do Countries Set Up National Carriers? A. National carriers are usually set up at the teething stage of a country’s civil aviation. B. They are sometimes brought back to life, though at great cost and risk to absorb employees of failed major domestic carriers. It provides employment and assuages nerves of restive unions. C. They may also be set up to avert monopolistic or weak tendencies of surviving airlines by providing additional fleet, capacity, and frequency in support of other registered carriers or investors. Generally they are regularly propped up with numerous protectionist policies, such as financial aid, route exclusivity, privatisation, technical partnership etc. When these policies fail they are sold, liquidated or shredded. National Carrier or National Aviation Policy? A national carrier is limiting as it focuses on the airline and its operations, but a National Aviation Policy with the national carrier embedded focuses on socio-economic development. The policy will strengthen the industry and our airlines, the policy should include reduction of taxes, modernisation of ATC, regulatory burden reforms, stabilisaton of aviation fuel prices, provision of market for the flag carriers through a Fly Nigeria Act, while also ensuring our carriers consolidate and compete globally. Who Initiates The National Aviation Policy? The Ministry of Aviation is charged with the overall responsibility of managing aviation policy in the country. It is empowered by the Nigerian Civil Aviation Act of 1964 to make policies guiding air navigation, air transportation, airport development and maintenance, and provide aviation infrastructural service and other needs of the aviation industry. The Civil Aviation Act 2006 part 1, Section 1 also states that; “The Minister shall be responsible for the formulation of policies and strategies for the promotion and encouragement of civil aviation in Nigeria and the fostering of sound economic policies that assure the provision of efficient and safe services by air carriers and other aviation and allied service providers, as well as greater access to air transport in a sustainable manner and to assist with ensuring that Nigeria’s obligations under international agreement are implemented and adhered to.” This event is as an opportunity to indicate the direction our policy should take for meaningful aviation investment in Nigeria. In doing this it is we must kick start it with these mantra: ⮚ Analysing past policy documents, identify the positive impact they have made and highlight their deficiencies. ⮚ Set a timeline for review of the document ⮚ Consult and engage Stakeholders across board ⮚ Will power to implement by the initiator and those for whom it is made ⮚ NATIONAL INTEREST ABOVE SELF INTEREST Any attempt at formulating or developing an aviation policy as would encourage investment must address the following: ⮚ Funding of Safety and Security ⮚ Inadequate infrastructure certification ⮚ Access to Maintenance Services ⮚ Rising Costs of Aviation Fuel ⮚ Taxation ⮚ The effects of the foreign exchange crisis ⮚ Safety Regulation ⮚ Labour Issues ⮚ Adherence to Terms Conditions of Agreements ⮚ Retention of “Ease of Doing Business” ⮚ Implementation of The Economic Regulations Guidelines ⮚ Respect of Judicial proclamations Therefore, the required policy direction at this point in time should support the national airlines and improve the socio economic conditions: ⮚ Development of Airports (old and new) through PPP ⮚ Deliberate establishment of Maintenance Repair and Overhaul facilities with 0% Customs tariff including VAT, 5-year tax holiday MRO related transactions, simplified Ports clearance, expeditious grant of land on generous terms ⮚ Aggressive review of Bilateral Traffic Rights ⮚ Regional Connectivity Scheme- Tax incentives for all airlines operating on hitherto underserved routes ⮚ Upward review of Foreign Equity or Participation A well articulated and consistent Air Transport Policy is very critical to Nigeria’s long term development. However, it should be formulated to form part of a transport chain. Aviation has always been treated as a stand-alone; instead of as part of a seamless all inclusive transport chain. ASSET MANAGEMENT COMPANY OF NIGERIA (AMCON) AND MINISTRY OF AVIATION The obvious disagreement between AMCON and the Ministry is not helpful and will obviously derail the national carrier project in the long run. There is a misconception that AMCON is an interloper. It is a government organisation that was applauded when it stepped in to halt the financial bleeding in ARIK and AERO. AMCON’s priority is to save depositors' funds, the financial system and legitimate borrowers, whose business offered a safety net. The recovery process starts with getting advisers, advertising the organisation and getting requisite approval from regulatory agencies. We must support AMCON to achieve this effort. Therein is the successful conception of the National Carrier. I also want to advise that we avoid some glaring mistakes that led to the fall of Virgin Nigeria which are  The use of government power to foist unfair and “favourable” agreements.  Secrecy of would be investors that were labelled institutional investors.  Non participation of Nigerian investors in the management of the airline.  Non involvement of aviation stakeholders in the ownership structure.  Government interference in operational schedule. ALL NATIONS HAVE THE RESPONSIBILITY OF ENSURING SAFE AND PROFITABLE DEVELOPMENT OF AVIATION! Thank You Olumide Ohunayo Head Research & Corporate Travel Zenith Travel& Consult PRO Aviation Round Table