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