Ibadan airport is one of the federal government owned airports in the south western part of Nigeria. The airport with large expanse of land has been poached regularly by the villagers and the air force authority; some reasons adduced for this action are long neglect of facilities, poor funding or non release of operational allocation, under utilisation and most importantly the lack of fencing and support from its host- the Oyo State Government.
The staff quarters are derelict while facilities in and around the airport itself are begging for overhaul or outright replacement. It’s in this sorry state that, the runway safety was challenged by a mysterious cow whose dung was the only evidence.
The airport manager and his team rolled up their sleeves to get the mystery cow, after searching for days; they had to call the Nigerian police to join the search team, with a shoot at sight mandate.
The police did not disappoint, just like the boko haram issue, they successfully located the cow in his resting place, fired a volley of bullets that could not produce carcass or blood stained leaves, as expected the usual nauseating rhymes of the police was flown again -the cow escaped with serious injuries later the story changed to the ridiculous. It’s a mystery cow that must be appeased spiritually, despite wasting tax payers’ bullet and the inevitable mobilisation fee.
The manager became restless knowing the safety implications of having a spirit filled and still wandering cow on the runway of an airport that is gradually recovering commercial flights after years of abandonment, without a carcass and the dung littering the runway daily before dawn.
He and his team invited local hunters, provided official vehicle, the only serviceable vehicle anyway for the mission. The hunters armed with shakabula (local gun) were able to find the well fed cow without injuries resting under a parked aircraft.
They carefully guided the cow from the aircraft before delivering the fatal shot. The cow did not go down without fighting, it went straight for the airport manager's official vehicle conveying the hunters and inflicting severe wreckage before finally giving up the ghost. You may ask what happened to the carcass after afterwards. Check Molete meat market.
We are thanking God today because it was only the FAAN vehicle that was damaged, what would have happened, if that attack was on Associated Airlines Embraer 120, Overland Airways Beech craft or Oyo State subsidised Arik Dash 8 flight that was either landing or taking off with the mystery cow on the runway?
These carriers operate props to this airport with some other charter flights that have consistently made the airport operational after long period of non operation. Our hard and well earned new safety records and certification would have been dented; happily the Ibadan FAAN team responded appropriately, un-mindful of the disappointing, conventional security.
Though FAAN has commenced work on the perimeter fencing at the airport, the project is slow and quality of work is not encouraging, considering that some part of the recently erected fence has cracks while some other part caved in during the last rainy season.
It is exciting to hear that the new management has been releasing allocation to the airports on time and regularly unlike in the past, they should also consider looking into the backlogs that have made their airport managers chronic debtors.
Also the unutilised airport land cannot continue to lie fallow. FAAN should begin to think outside the box or the alternative will be the continuous encroachment. Also is it true that some investors are willing to start a hospitality firm around Ibadan airport? if it is true then, the commercial department of FAAN should dust up the file and process the application.
Monday, January 16, 2012
Sunday, January 1, 2012
CHALLENGES FOR 2012
The challenges before us in 2012 are numerous. They are however surmountable if we have the will, support and leadership from Government and the owners of the flag carriers.
We should start with the EU sponsored emission tax regime which will be implemented from the 1st of January 2012, under the planned Emission Trading Scheme (ETS). Airlines using EU airspace will have to pay a fee for carbon emissions that exceed a set limit. They will also need to pay for the part of the journey covered in airspace outside the EU. Nigeria has joined a dozen other countries to voice her opposition, it will be good to see the government having a stand alone position to intimate the world they support their flag carriers. The Indian government has just directed Indian carriers not to submit carbon emission data to EU and should also forward any correspondence from the EU to the civil aviation Ministry for further action. This stance is harder and more independent position like that of the American and Chinese government.
Government should improve intelligence gathering, cooperation; provide extra and functioning CCTV cameras while ensuring the perimeter fences within and around the airports are intact. Considering, the heightened terrorist activities in the country they may see airports and aircrafts as soft targets.
Government should also strengthen regulations to protect travelers; this will help ensure that air travelers receive the respect they deserve before, during and after flights. Its regulations should be targeted at hidden fees, charges, delays, cancellation and involuntary bumping. Also investigations into fixing and discriminatory fares should be extended to other carriers, on the other hand, action should be expedited on the anti-trust laws and an independent competition authority, so Nigeria might have the benefit of information- sharing with its counterparts and more importantly tackle exploitative monopolist.
The underground agitation and lobbying to replace the DG NCAA, whose tenure will soon come to an end, should be handled with care. Government should be meticulous in picking a replacement, if they are unable to convince him to stay for a second term. That position requires a well bred technocrat with requisite background, backed with international contacts within the industry not political contact. The industry needs to retain and sustain the present level of safety awareness and acceptance; they must jettison the ethnic balancing option.
The government should continue the remodeling of the airports while an alternate funding arrangement must be devised to sustain the process and the airports in its entirety. The rancorous PPP arrangement in the industry should not tar the beauty of that option.
The owners of the domestic carriers need to leave their cocoon and speak out on issues related to the industry. A lot of the problems in the industry have been driven by management teams caring "a lot more about beating each other up rather than having a functioning industry". Employees, critics, analyst are not relenting in getting the industry back to its feet with the necessary protection from government. It will be more effective if the process is championed by the owners of these carriers, through its umbrella body the AON, which needs an urgent re-branding regime.
Its another year and a challenge for all industry participants to ensure that aviators gets national honours, our skies have been safe and attested to internationally, yet certain personnel and investors have not been recognised when Aki and Paw-Paw have been picked, Haba ! !
We should start with the EU sponsored emission tax regime which will be implemented from the 1st of January 2012, under the planned Emission Trading Scheme (ETS). Airlines using EU airspace will have to pay a fee for carbon emissions that exceed a set limit. They will also need to pay for the part of the journey covered in airspace outside the EU. Nigeria has joined a dozen other countries to voice her opposition, it will be good to see the government having a stand alone position to intimate the world they support their flag carriers. The Indian government has just directed Indian carriers not to submit carbon emission data to EU and should also forward any correspondence from the EU to the civil aviation Ministry for further action. This stance is harder and more independent position like that of the American and Chinese government.
Government should improve intelligence gathering, cooperation; provide extra and functioning CCTV cameras while ensuring the perimeter fences within and around the airports are intact. Considering, the heightened terrorist activities in the country they may see airports and aircrafts as soft targets.
Government should also strengthen regulations to protect travelers; this will help ensure that air travelers receive the respect they deserve before, during and after flights. Its regulations should be targeted at hidden fees, charges, delays, cancellation and involuntary bumping. Also investigations into fixing and discriminatory fares should be extended to other carriers, on the other hand, action should be expedited on the anti-trust laws and an independent competition authority, so Nigeria might have the benefit of information- sharing with its counterparts and more importantly tackle exploitative monopolist.
The underground agitation and lobbying to replace the DG NCAA, whose tenure will soon come to an end, should be handled with care. Government should be meticulous in picking a replacement, if they are unable to convince him to stay for a second term. That position requires a well bred technocrat with requisite background, backed with international contacts within the industry not political contact. The industry needs to retain and sustain the present level of safety awareness and acceptance; they must jettison the ethnic balancing option.
The government should continue the remodeling of the airports while an alternate funding arrangement must be devised to sustain the process and the airports in its entirety. The rancorous PPP arrangement in the industry should not tar the beauty of that option.
The owners of the domestic carriers need to leave their cocoon and speak out on issues related to the industry. A lot of the problems in the industry have been driven by management teams caring "a lot more about beating each other up rather than having a functioning industry". Employees, critics, analyst are not relenting in getting the industry back to its feet with the necessary protection from government. It will be more effective if the process is championed by the owners of these carriers, through its umbrella body the AON, which needs an urgent re-branding regime.
Its another year and a challenge for all industry participants to ensure that aviators gets national honours, our skies have been safe and attested to internationally, yet certain personnel and investors have not been recognised when Aki and Paw-Paw have been picked, Haba ! !
Sunday, December 11, 2011
NATIONAL CARRIER: THE 4th ATTEMPT?
Why is a National Carrier Needed? To absorb employees of failed major carriers by providing employment and assuages nerves of restive unions or to act as a means of providing additional fleet, capacity, and frequency in support of other registered carriers or to fill a vacuum and avert the monopolistic tendencies of surviving airlines.
The first scenario has been overtaken by events while second and third is the crux of the present agitation for another national carrier, considering the present set of flag carriers have not done anything to reflect national ownership like their counterpart in the banking industry which naturally muster public support and protection. Also they are floundering with suffocating debts, with the international routes and frequencies that should be money spinners, are apparently controlled by foreign airlines. We also lack undiluted low cost carriers, adequate regional jets or props services, finance and a regulated consolidation regime that will bolster the critical mass of our carriers and improve passenger enplanement to the benefit of all stakeholders in general and the economy in particular.
.
Let us learn from Mexico and India, they had two national carriers each. India has merged Air India and Indian Airlines, while the Mexican government has sold Mexicana and Aero Mexico, the surviving ones are either heavily indebted or liquidated. Also countries like Greece, Argentina, Ghana, Senegal, Cameroun, Gabon, Tanzania and Zambia have liquidated their national carriers and have tried unsuccessfully to have another viable carrier despite sinking lots of public funds in their respective new national carrier.
We should not forgot that our shipping industry have failed thrice in their attempt to set up a national carrier while the twitted comment of our Honourable Minister should be the fourth attempt in the industry, after the failed attempt of Capt Joji and Mrs. Kema Chikwe. The reality check is, Nigeria Airways failed with absolute monopoly of the bilateral air services agreement, government subsidy and protection therefore the new national carrier will fail woefully in the present competitive, open skies ridden aviation industry, if the government is not meticulous with the options therein.
If we must have a national carrier, then we should ponder over the cost, risk and lessons from other climes, also we should dust the report of the International Finance Company that was contacted to work out modalities of a new carrier in the early days of the present democratic setting.
The timeline of this administration, present policy makers and the penchant of reversing or abandoning policies of previous government, even when they share the same political ideology are the inherent problems, also the protection needed by the new carrier will shackle and compound the problems of the local airlines. It is a better option for the government to buy into existing flag carriers, namely Aero, Air Nigeria e.t.c, after due diligence rather than starting from ground zero.
Thereafter, the government can look for a reputable institutions to manage their interest in them till they are ripen for a public offer, while Government continue to protect, legislate and provide the coveted public travel to these carriers in the absence of an essential air services programme.
Government in the interim should consider a consolidation process. The last consolidation exercise was a ruse as the only beneficiary of that process is the Corporate Affairs Commission (CAC), due to the hefty taxes collected from airlines. It is pertinent to note that barely six months after the paper consolidation process; two domestic airlines that passed the process were grounded over maintenance related issues, five other airlines have beaten the dust thereafter.
The first scenario has been overtaken by events while second and third is the crux of the present agitation for another national carrier, considering the present set of flag carriers have not done anything to reflect national ownership like their counterpart in the banking industry which naturally muster public support and protection. Also they are floundering with suffocating debts, with the international routes and frequencies that should be money spinners, are apparently controlled by foreign airlines. We also lack undiluted low cost carriers, adequate regional jets or props services, finance and a regulated consolidation regime that will bolster the critical mass of our carriers and improve passenger enplanement to the benefit of all stakeholders in general and the economy in particular.
.
Let us learn from Mexico and India, they had two national carriers each. India has merged Air India and Indian Airlines, while the Mexican government has sold Mexicana and Aero Mexico, the surviving ones are either heavily indebted or liquidated. Also countries like Greece, Argentina, Ghana, Senegal, Cameroun, Gabon, Tanzania and Zambia have liquidated their national carriers and have tried unsuccessfully to have another viable carrier despite sinking lots of public funds in their respective new national carrier.
We should not forgot that our shipping industry have failed thrice in their attempt to set up a national carrier while the twitted comment of our Honourable Minister should be the fourth attempt in the industry, after the failed attempt of Capt Joji and Mrs. Kema Chikwe. The reality check is, Nigeria Airways failed with absolute monopoly of the bilateral air services agreement, government subsidy and protection therefore the new national carrier will fail woefully in the present competitive, open skies ridden aviation industry, if the government is not meticulous with the options therein.
If we must have a national carrier, then we should ponder over the cost, risk and lessons from other climes, also we should dust the report of the International Finance Company that was contacted to work out modalities of a new carrier in the early days of the present democratic setting.
The timeline of this administration, present policy makers and the penchant of reversing or abandoning policies of previous government, even when they share the same political ideology are the inherent problems, also the protection needed by the new carrier will shackle and compound the problems of the local airlines. It is a better option for the government to buy into existing flag carriers, namely Aero, Air Nigeria e.t.c, after due diligence rather than starting from ground zero.
Thereafter, the government can look for a reputable institutions to manage their interest in them till they are ripen for a public offer, while Government continue to protect, legislate and provide the coveted public travel to these carriers in the absence of an essential air services programme.
Government in the interim should consider a consolidation process. The last consolidation exercise was a ruse as the only beneficiary of that process is the Corporate Affairs Commission (CAC), due to the hefty taxes collected from airlines. It is pertinent to note that barely six months after the paper consolidation process; two domestic airlines that passed the process were grounded over maintenance related issues, five other airlines have beaten the dust thereafter.
Friday, November 25, 2011
RE BASA: THUMBS UP TO THE GOVT, BUT!!
What else can I say than to give thumbs up to the government for securing seven Abuja -London slots at the Heathrow Airport, the slots will be used by Arik Air.
The British authorities needed a bite, from a country that has been barking over the years, the bite was sudden and effective. to our surprise, the off-tone statement associating slots to an independent company in England was jettisoned, when we also jettisoned diplomatic language and dug deep with aerial arsenal that were deployed to sanctify the tenets of reciprocity as enshrined in the Bilateral Air Service Agreement (BASA).
Slots transfer, including auctioning is meant to help airlines with little or no service gain a competitive foothold at airports with limited space, the airlines are encouraged to operate either with their own aircraft or through a code-sharing agreement, in order to ensure that a purchaser will be able to provide meaningful new competition, which will bring down fares.
The British authorities and most EU countries have reversed this principle to protect legacy or flag carriers using factors such as fleet size, financial muscle, and nationality clause e.t.c, codified as grand father rights. This protection has given them the impetus to discriminate and increase fare arbitrarily
It's a new beginning and I hope the government will go ahead to review other lopsided BASA's. The NCAA has gone further with the issue of discriminatory fares on the London route, they have imposed fines on British Airways and Virgin Atlantic after a painstaking investigation, that's another plus for the country, while we wait for their responses, the NCAA should go further, by extending the investigations to other routes.
The beauty of this investigation is the proactive action of the regulator, who did not wait for the whistle blowing airline to come to them and were not fooled by the cheese-like bickering or is it rivalry that has been used to fool the public in the past, by these carriers. Their flamboyant chairman came, danced , wore our traditional cloths , got his airline the second designation with bogus promise of crashing fares on the London route, alas it's colluding to discriminate that we got from the dual designation. They have not been able to bring down fares; rather they bled Virgin Nigeria's London flight by sending them to Gatwick to feed the mother instead of vice versa and are presently angling for an open skies agreement with the federal government.
On our part we need to be cautious, the initial press release from the Ministry of Aviation, intimating the public of government decision to withdraw some BA flights was not properly handled, that must have accounted for huge criticism and negative commentaries from Nigerians that the government was trying to protect, this was later corrected by the ministry and Arik management.
Also, the Honourable Minister should begin to warm up to the unions and aviation correspondents to get the raw feelers in the industry rather than getting ambushed by self seeking experts or selected media guru. I also noticed that the government is now talking about a dual-hub policy, precisely the cities of Lagos and Abuja. This sounds more political than economic, considering we don't have carriers to implement the dual hub dream. If the government insists, implementation should be gradual with more emphasis on Lagos as his primary hub while Abuja becomes the secondary hub.
In furtherance, we need carriers to develop these hubs, these carriers will have an effective spoke policy to feed the domestic west coast routes, code share while also preparing to join any of the established alliance network. Virgin Nigeria was built on this platform before they were muscled out of MMA thereafter abandoned by the virgin empire with a mounting operational debt that hunts them till date. Therefore what can we do to get at least three strong airlines, that will attract credible investors?
We must as a necessity start a process of economic re-regulation of our domestic carriers with subtle regulatory mergers. We can go further by preparing a market for them, this market -is the public expenditure travel, it's a critical lifeline for the airlines and a stimulus for investment, should we be reminded that the first and business class seats on these foreign carriers are dominated by this category of travelers.
If the Honourable Minister's promise of ensuring that aviation adds value to the country's GDP, is to be taken seriously then we must step up our operational prowess by improving infrastructure, fine-tune existing and open up new concession programmes while also beefing up our carriers to participate rather than wait to collect toll (BASA FUND) at the bus stop like NURTW men. The BASA funds are collected directly from ticket fares by the foreign carriers and remitted to government at a later date. It's the Nigerian passengers we rob to build the funds.
Why are the foreign carriers operating profitably into Nigeria with 85% load factor on B747,777,A340 and we are reciprocating with B737 or with 40% load factor on bigger jets? We need to keep this new BASA spirit and victory alive by supporting our carriers not parroting the support. I align with DG NCAA, that our skies our open for exploration not exploitation
The British authorities needed a bite, from a country that has been barking over the years, the bite was sudden and effective. to our surprise, the off-tone statement associating slots to an independent company in England was jettisoned, when we also jettisoned diplomatic language and dug deep with aerial arsenal that were deployed to sanctify the tenets of reciprocity as enshrined in the Bilateral Air Service Agreement (BASA).
Slots transfer, including auctioning is meant to help airlines with little or no service gain a competitive foothold at airports with limited space, the airlines are encouraged to operate either with their own aircraft or through a code-sharing agreement, in order to ensure that a purchaser will be able to provide meaningful new competition, which will bring down fares.
The British authorities and most EU countries have reversed this principle to protect legacy or flag carriers using factors such as fleet size, financial muscle, and nationality clause e.t.c, codified as grand father rights. This protection has given them the impetus to discriminate and increase fare arbitrarily
It's a new beginning and I hope the government will go ahead to review other lopsided BASA's. The NCAA has gone further with the issue of discriminatory fares on the London route, they have imposed fines on British Airways and Virgin Atlantic after a painstaking investigation, that's another plus for the country, while we wait for their responses, the NCAA should go further, by extending the investigations to other routes.
The beauty of this investigation is the proactive action of the regulator, who did not wait for the whistle blowing airline to come to them and were not fooled by the cheese-like bickering or is it rivalry that has been used to fool the public in the past, by these carriers. Their flamboyant chairman came, danced , wore our traditional cloths , got his airline the second designation with bogus promise of crashing fares on the London route, alas it's colluding to discriminate that we got from the dual designation. They have not been able to bring down fares; rather they bled Virgin Nigeria's London flight by sending them to Gatwick to feed the mother instead of vice versa and are presently angling for an open skies agreement with the federal government.
On our part we need to be cautious, the initial press release from the Ministry of Aviation, intimating the public of government decision to withdraw some BA flights was not properly handled, that must have accounted for huge criticism and negative commentaries from Nigerians that the government was trying to protect, this was later corrected by the ministry and Arik management.
Also, the Honourable Minister should begin to warm up to the unions and aviation correspondents to get the raw feelers in the industry rather than getting ambushed by self seeking experts or selected media guru. I also noticed that the government is now talking about a dual-hub policy, precisely the cities of Lagos and Abuja. This sounds more political than economic, considering we don't have carriers to implement the dual hub dream. If the government insists, implementation should be gradual with more emphasis on Lagos as his primary hub while Abuja becomes the secondary hub.
In furtherance, we need carriers to develop these hubs, these carriers will have an effective spoke policy to feed the domestic west coast routes, code share while also preparing to join any of the established alliance network. Virgin Nigeria was built on this platform before they were muscled out of MMA thereafter abandoned by the virgin empire with a mounting operational debt that hunts them till date. Therefore what can we do to get at least three strong airlines, that will attract credible investors?
We must as a necessity start a process of economic re-regulation of our domestic carriers with subtle regulatory mergers. We can go further by preparing a market for them, this market -is the public expenditure travel, it's a critical lifeline for the airlines and a stimulus for investment, should we be reminded that the first and business class seats on these foreign carriers are dominated by this category of travelers.
If the Honourable Minister's promise of ensuring that aviation adds value to the country's GDP, is to be taken seriously then we must step up our operational prowess by improving infrastructure, fine-tune existing and open up new concession programmes while also beefing up our carriers to participate rather than wait to collect toll (BASA FUND) at the bus stop like NURTW men. The BASA funds are collected directly from ticket fares by the foreign carriers and remitted to government at a later date. It's the Nigerian passengers we rob to build the funds.
Why are the foreign carriers operating profitably into Nigeria with 85% load factor on B747,777,A340 and we are reciprocating with B737 or with 40% load factor on bigger jets? We need to keep this new BASA spirit and victory alive by supporting our carriers not parroting the support. I align with DG NCAA, that our skies our open for exploration not exploitation
Tuesday, November 8, 2011
BASA CONTROVERSIES: We Have To Be Cautious&Firm
It’s with great relief to hear and see that the government is finally listening and understanding the aspirations of the industry, but there is a need to be cautious with the implementation process.
The industry genuinely yearns for a general review of some Bilateral Air Service Agreement (BASA) signed with some countries which has been detrimental to the growth of our carriers and other facets of the industry while deceptively enriching our acrimonious and deeply secretive BASA account.
It’s unfair not to give our carriers landing slots in Heathrow or required to bid for it at exorbitant prices, if that is the situation then the government should factor the cost and other entry points in the next round of negotiation.
In reviewing the agreement the government should quite naturally involve all parties, by building a team comprising of requisite government agencies, departments, designated airlines and probably a representative of the other Nigerian Airlines.
Our carriers should not only be willing but must demonstrate their ability to reciprocate our own side of the agreements by either operating directly or through a code share. Arik need to look inwards and address the perennial delayed departure and other operational lapses which ultimately affects arrival time, disrupt operational activities in slot constrained airports.
Our flag carriers should know that the operational laxity being overlooked by MMIA management team will not be replicated by an airport owned and managed by private hands, whose only objective is to maximize profit while proving excellent service.
We need to renegotiate all unfavorable agreements, using diplomatic and legal timelines that will not embarrass the country, the corporate arrogance of British Airways as exemplified in the first press release while also using Nigerians who are highly placed BA frequent milers to push their selfish position in private and public to the detriment of the country, is irritating and condemnable.
The government should go further and investigate discriminatory fares on the London route and other routes, using fines as appropriate sanctions. We should manage this crisis well, so fares will not rise on the LOS- LHR route and also avoid a situation where the other European and the rising Middle Eastern airlines operating into the country will capitalize on the crisis by smiling to bank to the detriment of Nigerian people and carriers.
The alarm bell is ringing, we should start looking at how to heal our limping carriers by regulation and finance, so they can attract foreign investors, partners or carriers rather than wait for money launderers to deceive us again.
Are we still surprised that our carriers are not operating to the Middle East, other European cities and even abandoned the high yield ABV - LHR route. Well, it is glaring that our economy is financed by public funds and government travel constitutes a large chunk of upper end cabin. Its time to re-regulate our carriers economically which should be backed by a Fly-Nigeria- Act
The industry genuinely yearns for a general review of some Bilateral Air Service Agreement (BASA) signed with some countries which has been detrimental to the growth of our carriers and other facets of the industry while deceptively enriching our acrimonious and deeply secretive BASA account.
It’s unfair not to give our carriers landing slots in Heathrow or required to bid for it at exorbitant prices, if that is the situation then the government should factor the cost and other entry points in the next round of negotiation.
In reviewing the agreement the government should quite naturally involve all parties, by building a team comprising of requisite government agencies, departments, designated airlines and probably a representative of the other Nigerian Airlines.
Our carriers should not only be willing but must demonstrate their ability to reciprocate our own side of the agreements by either operating directly or through a code share. Arik need to look inwards and address the perennial delayed departure and other operational lapses which ultimately affects arrival time, disrupt operational activities in slot constrained airports.
Our flag carriers should know that the operational laxity being overlooked by MMIA management team will not be replicated by an airport owned and managed by private hands, whose only objective is to maximize profit while proving excellent service.
We need to renegotiate all unfavorable agreements, using diplomatic and legal timelines that will not embarrass the country, the corporate arrogance of British Airways as exemplified in the first press release while also using Nigerians who are highly placed BA frequent milers to push their selfish position in private and public to the detriment of the country, is irritating and condemnable.
The government should go further and investigate discriminatory fares on the London route and other routes, using fines as appropriate sanctions. We should manage this crisis well, so fares will not rise on the LOS- LHR route and also avoid a situation where the other European and the rising Middle Eastern airlines operating into the country will capitalize on the crisis by smiling to bank to the detriment of Nigerian people and carriers.
The alarm bell is ringing, we should start looking at how to heal our limping carriers by regulation and finance, so they can attract foreign investors, partners or carriers rather than wait for money launderers to deceive us again.
Are we still surprised that our carriers are not operating to the Middle East, other European cities and even abandoned the high yield ABV - LHR route. Well, it is glaring that our economy is financed by public funds and government travel constitutes a large chunk of upper end cabin. Its time to re-regulate our carriers economically which should be backed by a Fly-Nigeria- Act
Thursday, May 26, 2011
AGENDA FOR MR PRESIDENT
Mr President’s agenda for the industry will definitely be determined by the quality of personnel appointed to replace the outgoing minister, senior special assistant in conjunction with the new leadership of the various agencies. They should be professionals who have inclinations that align with the industry’s aspiration, definitely not raw or recurrent politicians.
They should drive the new aviation programme, in the absence of a position or policy trust for the industry during the last electioneering campaign, the onus lies on the new appointees and other stakeholders to push new programmes for implementation.
Therefore we must push policies and strategies that will operationally strengthen our carriers. Airline issues are viewed and operated as an instrument of national strategy and often times integrated vertically across commerce and tourism. It must also be integrated into the country’s foreign policy like the Middle Eastern government are doing with their carriers. Since the demise of Nigeria Airways and the still birth of its replacement, the government has practically abandoned the domestic carriers except for the bailout fund that was recently granted, which is difficult to utilise due to loan re-financing or toxic debt condition attached.
The govt should continue to encourage concession, should not be deterred by the messy agreements in place, rather than cancel them, they should be renegotiated .Concession is more enduring, improves capital accessibility and ensures public funds are directed at essential services.
We are preparing for ICAO audit, with feelers from the mock audit, the country will definitely come out in flying colours, and then we will clap and pat ourselves on the back again. We must go further by complimenting our safety achievement with making the airlines commercially viable and the airport self sustaining, that we must do by drafting and implementing a stand-alone aviation action plan.
The plan should address the rising tax burden, arbitrary fuel price increment, reduce the industry's regulatory burden, improve air traffic &airport management system and attract investments in our carriers.
They should drive the new aviation programme, in the absence of a position or policy trust for the industry during the last electioneering campaign, the onus lies on the new appointees and other stakeholders to push new programmes for implementation.
Therefore we must push policies and strategies that will operationally strengthen our carriers. Airline issues are viewed and operated as an instrument of national strategy and often times integrated vertically across commerce and tourism. It must also be integrated into the country’s foreign policy like the Middle Eastern government are doing with their carriers. Since the demise of Nigeria Airways and the still birth of its replacement, the government has practically abandoned the domestic carriers except for the bailout fund that was recently granted, which is difficult to utilise due to loan re-financing or toxic debt condition attached.
The govt should continue to encourage concession, should not be deterred by the messy agreements in place, rather than cancel them, they should be renegotiated .Concession is more enduring, improves capital accessibility and ensures public funds are directed at essential services.
We are preparing for ICAO audit, with feelers from the mock audit, the country will definitely come out in flying colours, and then we will clap and pat ourselves on the back again. We must go further by complimenting our safety achievement with making the airlines commercially viable and the airport self sustaining, that we must do by drafting and implementing a stand-alone aviation action plan.
The plan should address the rising tax burden, arbitrary fuel price increment, reduce the industry's regulatory burden, improve air traffic &airport management system and attract investments in our carriers.
ARIK’S TIMELY PLEA BARGAIN
The pains and agonies of our domestic carriers seem unending; luckily none have bitten the dust of late.
We were still basking in the glory of a new carrier, First Nation, which will be flying the Nigerian skies very soon with aircrafts that will puncture the dominance of the Boeing 737, increase competition and most probably improve service delivery, when the rumour or the news filtered that the government was planning to convert Arik to a national carrier. Barely five days later, a national daily informed Nigerians that the government has decided to buy the airline’s toxic debt through AMCON.
The airline has not come out categorically to deny the stories rather the spokesperson came out with a veiled statement, that “we are not aware”. It is an open secret that the carrier is indeed having liquidity problems, considering recurrent delays of staff salaries, debts or related issues with agencies and other service providers have become a norm rather than an exception.
It is also true that the industry is predominantly financed by different financial instruments, therefore owing and servicing these debt is a noble commitment of all organisations properly managed and willing to remain in business.
How did Arik get to this stage? Let me start with the government that has refused to enshrine policies and strategies that will operationally strengthen our carriers. Airline issues are viewed and operated as an instrument of national strategy and often times integrated vertically across commerce and tourism. It is also integrated into the country’s foreign policy. Since the demise of Nigeria Airways and the still birth of its replacement, the government has practically abandoned the domestic carriers except for the bailout fund that was recently granted, which is difficult to utilise due to loan re-financing condition attached.
Arik’s growth was too fast and equally too furious coupled with managerial and corporate arrogance. They started operations by being top heavy with expatriates from failed European airlines, and later got some ex -Virgin Nigeria mercenaries who had left VN with huge debts accumulated from operational and leasing expenses. Not surprisingly, the mercenaries and most of the first generation of expatriates did not last, as they were enmeshed in financial or social mess that haunt Arik till date.
The owner manager syndrome is another structural cankerworm inherited by the airline from our skies, the effects of this syndrome are: access to capital will be difficult and expensive; executive discipline lacking in the absence of a functional board; collaborative discussions are primarily trimmed to the owner’s wish list, rather than commercial benefits; mergers & consolidations are rare, except when they are legislated. It also whittles down public support or legislative backing as they are seen as Mr. A airline and not Nigerian flag carrier
Ironically, Arik opposed bailout for domestic carriers, by working assiduously to frustrate Capt Boyo led committee on bailout modalities, today the airline, is limping critically towards the fund, we should also not forget that, rather than battle foreign carriers for the control of the Nigerian market they wanted to completely annihilate the domestic carriers with grave monopolistic consequences .
Compared to other carriers’ world over, Arik is a small carrier but a behemoth in Nigerian airspace. It should not be allowed to die. Every option must be explored to save the airline with an exception, Nationalisation.
Nationalisation did not work in Greece, Argentina, Senegal Gabon etc; it will also not work here, with a bloated executive, an insatiable legislative arm and an army of ex this-ex that. It will send us back to the era of free tickets, flight diversion and aircraft commandeering.
Arik can also take a cue from Vijay Mallya, the CEO of Kingfisher Airlines in India, who has managed to convince banks to grant him a breather on the carrier’s debt of $1.55 billion, partly by converting some of it into equity, incidentally the A340 kingfisher ordered and later backed out at the point of delivery, was picked by Arik.
AMCON intervention is timely and necessary, which is tantamount to a plea bargain from Arik. The airline is admitting guilt and may be financially sentenced without serving the term, but the record will be there.
We were still basking in the glory of a new carrier, First Nation, which will be flying the Nigerian skies very soon with aircrafts that will puncture the dominance of the Boeing 737, increase competition and most probably improve service delivery, when the rumour or the news filtered that the government was planning to convert Arik to a national carrier. Barely five days later, a national daily informed Nigerians that the government has decided to buy the airline’s toxic debt through AMCON.
The airline has not come out categorically to deny the stories rather the spokesperson came out with a veiled statement, that “we are not aware”. It is an open secret that the carrier is indeed having liquidity problems, considering recurrent delays of staff salaries, debts or related issues with agencies and other service providers have become a norm rather than an exception.
It is also true that the industry is predominantly financed by different financial instruments, therefore owing and servicing these debt is a noble commitment of all organisations properly managed and willing to remain in business.
How did Arik get to this stage? Let me start with the government that has refused to enshrine policies and strategies that will operationally strengthen our carriers. Airline issues are viewed and operated as an instrument of national strategy and often times integrated vertically across commerce and tourism. It is also integrated into the country’s foreign policy. Since the demise of Nigeria Airways and the still birth of its replacement, the government has practically abandoned the domestic carriers except for the bailout fund that was recently granted, which is difficult to utilise due to loan re-financing condition attached.
Arik’s growth was too fast and equally too furious coupled with managerial and corporate arrogance. They started operations by being top heavy with expatriates from failed European airlines, and later got some ex -Virgin Nigeria mercenaries who had left VN with huge debts accumulated from operational and leasing expenses. Not surprisingly, the mercenaries and most of the first generation of expatriates did not last, as they were enmeshed in financial or social mess that haunt Arik till date.
The owner manager syndrome is another structural cankerworm inherited by the airline from our skies, the effects of this syndrome are: access to capital will be difficult and expensive; executive discipline lacking in the absence of a functional board; collaborative discussions are primarily trimmed to the owner’s wish list, rather than commercial benefits; mergers & consolidations are rare, except when they are legislated. It also whittles down public support or legislative backing as they are seen as Mr. A airline and not Nigerian flag carrier
Ironically, Arik opposed bailout for domestic carriers, by working assiduously to frustrate Capt Boyo led committee on bailout modalities, today the airline, is limping critically towards the fund, we should also not forget that, rather than battle foreign carriers for the control of the Nigerian market they wanted to completely annihilate the domestic carriers with grave monopolistic consequences .
Compared to other carriers’ world over, Arik is a small carrier but a behemoth in Nigerian airspace. It should not be allowed to die. Every option must be explored to save the airline with an exception, Nationalisation.
Nationalisation did not work in Greece, Argentina, Senegal Gabon etc; it will also not work here, with a bloated executive, an insatiable legislative arm and an army of ex this-ex that. It will send us back to the era of free tickets, flight diversion and aircraft commandeering.
Arik can also take a cue from Vijay Mallya, the CEO of Kingfisher Airlines in India, who has managed to convince banks to grant him a breather on the carrier’s debt of $1.55 billion, partly by converting some of it into equity, incidentally the A340 kingfisher ordered and later backed out at the point of delivery, was picked by Arik.
AMCON intervention is timely and necessary, which is tantamount to a plea bargain from Arik. The airline is admitting guilt and may be financially sentenced without serving the term, but the record will be there.
Subscribe to:
Posts (Atom)