TRANSFORMATION OF THE AVIATION INDUSTRY IN NIGERIA (PROSPECTS&CHALLENGES)

2015 MAY DAY LECTURE Presented by Mr. OLUMIDE .O. OHUNAYO (Head Research Travel: Zenith Travel&Consult) TRANSFORMATION OF THE AVIATION INDUSTRY IN NIGERIA: PROSPECTS & CHALLENGES Transformation of the industry was a cardinal campaign promise of the PDP under the leadership of President Ebele Jonathan. Thereafter, Ms. Stella Oduah was appointed as the Honourable Minister to lead the transformation flight. The flight will terminate at Eagle Square in a couple of weeks, under the headship of Chief Chidoka, who incidentally is the fourth Aviation Minister within the last four years. I will not dwell on the past or present, but will focus on the future and to do that we need to look at issues in the industry that should be addressed, reviewed and if possible annulled to give the incoming administration the necessary pedal to push for the ‘change’ that was voted for by Nigerians. The change in the industry must start with the scrapping of the Ministry of Aviation and all aviation related Senior Special Assistant positions. The Ministry and the SSAs to president have increased the cost of service delivery, bureaucracy, processing time, and are irritating interlopers. They have over burdened the agencies with personnel and bills to the detriment of efficiency, safety and profitability. (Agencies are forced to pay for their chartered flights and tickets of family members till date). Governance is a continuum, so I advise that the adjusted or is it updated version of the Steven Oransanye Committee Report on the industry should not be trashed, but tweaked to the benefit of all. The Presidential Air Fleet (PAF) is too large for a country bleeding financially due to prolonged mismanagement and recent low crude oil price. The fleet should be reduced to the barest minimum, and the remaining aircrafts should either be sold off or used as the bedrock for a new aircraft leasing company not to start a national carrier. Gray market popularly called illegal charter flights are operated by civil and military aircrafts. This hydra headed monster remains unresolved in spite of the rhetoric on the matter. Military participation in civil charter is illegal and detrimental to commercial charter operators, and also encourages romance with politicians, which will affect security and professionalism. The incoming government must show leadership, while the regulator needs to educate end users about the dangers of the gray market. Illegal flights put insurance coverage in jeopardy, create unfair competition and hinder the growth of legitimate operators. The luxury tax introduced recently for charter and private operations by the ministry of finance is a bit late, but commendable. As expected, implementation has always been the bane of the industry. The norm in other climes is that non aeronautical services and general aviation revenue are used to oil the wheels of operations and improved profitability. It is on these bases that the incoming government should devise new strategies that will effectively capture and increase revenue from these sources by increasing the deployment of IT facilities and removing all waivers and subsidies granted to non schedule operators/ private operators who have deliberately latched on the umbilical cord of scheduled operators. These waivers and subsidies are robbing Peter to pay Paul. Appointments, employment and elevation in the agencies saw the worst politicisation in the last four years. The organograms are improperly structured and top heavy. FAAN is worse off and its union members need to brace up by protecting career professionals and public servants. The agencies need reforms and reorganisation to ensure improved service delivery and revenue generation. The consolidation of the industry will be the best transformation therefore we need to stop the rot and the foot dragging of the operators, regulator and government. A REGULATED FLEET CONSOLIDATION PROCESS should be initiated immediately to strengthen our carriers, improve safety and attract partners. I propose a minimum of 5 schedule commercial jets for domestic operators, 8 for regional and 10 for international operators. Thereafter strong flag carriers in national outlook will blossom, while a Fly Nigeria Act should be used to complement the consolidation process. WE DO NOT NEED TO START A NEW NATIONAL CARRIER, LET IT BLOSSOM NATURALLY BY OWNERSHIP AND OPERATIONAL PROWESS. What we lack are policies to strengthen and encourage new investors. It is no secret that most infrastructural investments and foreign carriers are natural monopolies or have monopoly-like characteristics. To offset the negative impact of monopolistic behaviour, the independent regulator must keep the consumer interest paramount both in terms of price and service levels. Therefore a credible independent robust economic regulator should be considered. This is a refreshing innovation that will curb and punish predatory activities, ginger competition and most importantly protect domestic carriers and consumers from companies and airlines with significant market power and dominant position. The NCAA should focus on technical and safety oversight, their core competence. Incidentally, the idea of an independent regulatory body tallies with the new Civil Aviation Policy, IATA position on effective governance and the World Bank Report presented to stakeholders last year. If the unit is not politicised or made an appendage of any Ministry, it will be the most important legacy of the incoming administration, and will also act as a purveyor of an encompassing antitrust body that will protect Nigerians in other sectors of the economy. Open Skies is another area that needs change, we hurriedly signed the open skies and other unfair bilateral agreements that has increased frequencies, gauge and entry points. Some couple of months back the ministry committed us to African Single Sky project. We need to tarry a while before joining the single sky project. They want to operate our lucrative routes directly it’s a pseudo cabotage. The change we need is FAIR SKIES. The government owned Sky Power Catering is rotten due to neglect and cannibalisation of its assets and properties, since the demise of Nigeria Airways. The incoming government should sell the firm or lease to a reputable catering organisation. THE ROT MUST STOP. In conclusion, transformation now means CHANGE. On the 29th May of 2015, there will be a change in government and governance, hopefully it should reflect in our industry if we address the issues highlighted.

AVIATION COMMITS: implementation and sustainability are key to delivery

A couple of days ago industry players were gathered at the Oriental hotel Lekki, at the instance of the Honourable Minister Aviation for the public presentation of Aviation Commit Initiative. In his words "It is a compendium of the industry commitments and initiative aimed at repackaging, rebranding and redirecting the industry towards enhanced service delivery and customer satisfaction". In achieving these objectives he directed members of the committees on accident report and aeronautical charges to liaise with the requisite agency heads and institutions for an accelerated implementation of their findings. The minister went further by highlighting some decisions he has consented to before proceeding with the public presentation of the aviation commit manual. The minster in his presentation said he had directed NCAA to publish the list of private operators who should not operate commercial flights, while all commercial flights being flown in the country must have a Nigerian in the cockpit irrespective of aircraft type. He went further by promising to address the issue of foreign registered carriers and the disparity in different charges on fares offered by the local airlines. He also talked about airline recapitalisation and liberalisation subtly tagged African single sky. Most of the issues relating to private jet, foreign registration and Nigerian content are enshrined in our regulations, acts and policies. Why have implementation and enforcement been difficult all these while? Why has the NCAA deliberately looked the other way? What has made the private jet operators so powerful that every minister comes with the same threat and become selective or partisan in implementation? What is new this time are the word "Commit", and a timeline which is not necessary for those who have commercially raped the system. The committee on aeronautical charges was on point on the issue of multiple and overlapping charges which the different agencies must address to improve and attract carriers. The agencies will have some distortions in the anticipated revenue since they have to reduce or eliminate some of the multiple charges while in the same breath commit to a 100% increase in internal revenue generation in a timeframe of less than a year without giving a base figure. The mathematics here is suspicious considering the huge overhead burden inherited by all the agencies and the gross excitement of impressing the minister. Even AIB the investigator is making such commitment. On recapitalisation, I will want to reiterate my humble disagreement on the issue of recapitalisation as a panacea to the problem of our airlines. It will only ensure we once again progress in error and deceit, these airlines in-conjunction with their bankers will prefer to see the airlines limping than being taken to the theatre for surgical operations. We must abort the fanciful flight of recapitalisation and board the fleet consolidation by regulation flight that will move minimum fleet from two to ten. Fleet is a physical asset that can be seen and verified it will sanitise operations while improving safety and profitability. On liberalisation and single African sky, the minister needs to thread softly, slowly and diplomatically. Liberalisation in the skies is a different ball game entirely. It is usually parroted, documented and encouraged but opaque in implementation. The US proponents of open skies have refused to sign with china, while the unions and airlines are asking them to review that of the gulf carriers. The pressure from American carriers has delayed the take off Norwegian low cost carrier from Dublin to New York despite meeting all the regulatory laws and conditions. We signed open skies with the US and had a five year head start which we fritter away till this moment because the decision was hasty with no carrier(s) to capitalise on it. The African single sky being proposed is a baby of Ethiopia airlines (ET) and government and the target is to operate to Europe, Far East and America from Lagos and Abuja. It's a subtle cabotage that we will make us the usual sitting giant. ET claimed the conditions are not ripe to invest in Nigeria but the same conditions have given them the highest frequencies and points into the country. Rather they have chosen to invest and partner other African countries such as Togo, Rwanda, Malawi, Congo and Zambia. In some recent publications in Nigeria, the CEO buttressed his call for single African sky because it has worked well in Europe but deliberately side stepped the ownership structure of those airlines. The caveat in liberalisation is collaboration; those airlines that are benefiting from the single sky policy are not solely owned by a government or person though protected by their respective government. If ET wants a single sky policy ownership structure must be diluted therefore, they should offload a certain percentage to countries that contribute to their total payload rather than grandstand using our politicians and selected media outlets. Nigeria is simply not ready neither do we have an airline that can represent us at the moment, we should tarry a while and learn from previous mistakes. In concluding, the Aviation Commit was a good initiative but implementation and sustenance are the key attributes that may hinder its objectives. I also noticed the chief executives signing the documents gleefully while their subordinates were committed to be sanctioned in the manuals and in some cases not carried along in the new initiative.

Fleet Reregulation not Recapitalisation

The committee set up by the honourable minister to look at charges, fares and other factors militating against the development of the industry have submitted its report, with the minister directing the agencies to ensure immediate implementation. The committee did a good job and brought to the fore some of the issues that has been raised in the past by industry watchers which includes but not limited to the dubious fuel surcharge hidden in our tickets by operators while also avoiding the tax regime. Other recommendations among others include the unnecessary retention of agency funds by operators while the poor performance in quality, service and operations was hinged on poor capitalisation and a need to urgently recapitalise the airlines. I humbly disagree on the issue of recapitalisation as a panacea to the problem of our airlines. It will only ensure we once again progress in error and deceit, these airlines in-conjunction with their bankers will prefer to see the airlines limping than being taken to the theatre for surgical operations. The bankers want to keep the window of loan repayment open, in tandem with lawyers employed for the preparation of documents by the airlines. They will only recapitalise the accounts of Corporate Affairs Commission and the lawyers engaged to process the documents. Thereafter the recapitalisation will be achieved. Flashing back to the twilight of the Obasanjo government, Chief Fani- Kayode was the minister of aviation with a marching order to stop the concurrent air mishaps and unsafe operations. He gave the same directive to all airlines to recapitalise based on their operational certification, the deadline was May 30 2007, barely 24hours to handing over to the new government. The airlines knowing the rudiments of presenting and processing documents got their legal team to work and they all recapitalised and also effectively beat the deadline set by the federal government. Looking at the list of airlines that recapitalised and satisfied the aspirations of the government as it were, at that time, only Arik has increased in equipment and operations while others have shrunk in size and operations or simply vanished or in coma. So what has recapitalisation achieved? The regulatory body recently issued AOC’s to Azman, Discovery, Hak and Air Peace airlines using the archaic two minimum aircraft rule, these airlines with the exception of Air Peace are either grounded or struggling to overcome the vagaries of operation. Air Peace airline the strongest fleet wise of the new entrants, is walking with the crutches of the amnesty office time will tell if they will be able to drop the crutches and walk with their two legs. On the other hand Medview airlines appears to be doing well with route expansion on the domestic and international routes with an increasing fleet, they have also promised to take the airline to the market which literally translates to ownership with other Nigerians and willing investors. It’s a good gesture that must come to fruition which will serve as a tonic for other carriers and also help stimulate the Fly Nigeria Act Project. The expansion and fleet size of Medview airlines is nothing compared to the size of Arik Air whose dominance of our skies is unpararelled in recent time. Sadly, the dominance has been used to benchmark foreign airlines crazy and exploitative fares on the international route. How do you justify Arik Air charging N94, 000 one-way on the Accra –Abuja route, a flight of less than 45 minutes and N360, 000 on the Lagos- London route a flight of less than 7 hours, just to latch on the Christmas season? We need to build at least two carriers to fly the flag and a third to compete well on the domestic route; this will ginger competition, attract investors, expand ownership and increase enplanement. To achieve these objectives we must abort the fanciful flight of recapitalisation and board the fleet consolidation by regulation flight that will move minimum fleet from two to ten. A stitch in time saves the industry from prolonged agony.

VIRGIN ATLANTIC REORGANISATION AND INSENSITIVITY

It is no secret that Virgin Atlantic is undergoing some cost restructuring and has done everything possible to cross the red line. They have closed some routes, reduced frequencies and gauge on some, while practically tearing down the low cost unit of the airline. In Nigeria, frequency has been consistent to Lagos, with increase in gauge, while Port Harcourt, along with Nairobi and Accra routes were axed sometime ago. Last week, the airline closed the Ticketing and Sales Department in Nigeria, throwing some Nigerians in the labour market while increasing the pain of their customers with the non acceptability of Nigerian credit cards. The airline’s spokesperson in Nigeria was quoted thus, “flight bookings, complaints or travel related calls from Nigeria will be directed to Johannesburg in South Africa.” He added that, “…the airline continues to review its business while driving efficiencies. Therefore, we are closing the Lagos Contact Centre and directing calls from Nigeria to the Johannesburg Contact Centre. Having one regional contact centre will mean we can serve our customers 24 hours during week days while delivering efficiencies. Our customers can also make their booking on the Virgin Atlantic website”. In taking some of these decisions the Management of Virgin was simply insensitive to our feelings, support and contribution to their successful operation into Nigeria. I will start by reminding Virgin that they promised that their entry into Nigeria would drive down fares just as they have done in other cities. I was one of those hoodwinked by this sentiment. Virgin instead joined the fray by offering exorbitant and absolutely crazy First and Business Class fares. British Airways resisted Virgin’s entry into Nigeria and lobbied for increased frequency. Our Ministry closed her ears and signed a dual designation with the British government. That decision angered the IFC team working on a new National Carrier project that was hinged on protection and exclusivity. They consequently pulled out of the National Carrier project and we are still going round in circles in search of a solution. The Lagos route, which is Virgin’s most profitable, gives the airline the highest revenue per seat in the region due to the huge demand for the higher class and fares by the public sector, which has made other Nigerians maximise the use of the full economy seats. This egoistic appetite is at the expense of Nigerian aviation industry in general. Sadly, Virgin’s choice of the South African Center to coordinate is to our detriment, and should be reconsidered since we generate huge revenue and commensurate yield for the airline. IATA initially asked the South Africans to coordinate the Bill Settlement Plan (BSP) for travel agencies. The deluge of complaints by Nigerians over the quality of services, time and cultural differences, made them move it to Amman and in the nearest future it will be here in Nigeria. Virgin has not promoted Nigerian staff, nor allowed them to unionise like their colleagues in England. They offer 12 weeks Maternity Leave as against the 6 months approved by British government for their counterpart. Also, salaries, allowances and other emoluments offered to Nigerian staff are much lower and a mere pittance compared to their colleagues in England, including those who work in the same cabins on the Lagos –London route. The staff retrenched recently will walk away with only their December salary, since Virgin declared that gratuity is Nigerian and not British. This regarding the same people who were never paid British salary. The Ministry and NCAA should, as a matter of urgency, take up this issue with the airline. When Virgin stopped operating into Accra, they wanted to lay off Ghanaians with just the last salary, but the Ghanaian government rose up and picked the gauntlet on behalf of the hapless staff. Furthermore, Aviation Logistics Company, which purportedly represents Nigerian interest, should be investigated for culpability. We have been too magnanimous with frequency, gauge and fund repatriation. The Venezuelan, Ghanaian, Indian and Hong Kong governments that protected their citizens and interest cannot be stupid. I must not fail to commend virgin management for coming out boldly to admit they have a problem and are doing everything possible to resolve it. I will also not forget the fact that they are the first international airline operating into Nigeria to employ and sustain Nigerian based cabin crew. It is informative that Mr. Branson who is the face and founder of the airline is not the largest shareholder. He invited British citizens and corporate organizations, and recently sold a large stake to Delta Airlines, a positive example for our numerous father and son airlines that seek cheap public funds and support.

AIRPORT PRIVATISATION: LET US TREAD SOFTLY

The recent announcement by the Bureau of Public Enterprises and subtle confirmation by the Honourable Minister of Aviation on the privatisation of some airports in the country is hasty and may be counterproductive. We are all aware that the remodeling process and associated loans has gulped a lot of money that has consequently sent FAAN to the abyss of debt. The debt should be warehoused by the ministry for now while they also initiate a process of verifying the quality and cost of the remodeling contracts with the hindsight that the contracts and approvals were shrouded in secrecy. The Chinese loans for the new international terminals can be excluded from this process. The question boggling our mind is why the rush to privatise some airports just a few months after turning down the same advice in the Orosanye report? Is the government looking for quick cash to reduce the over N150b debt generated from the remodeling process? Can the privatisation of two viable airports out of about twenty be the solution to indebtedness and inefficiency? FAAN needs help as an organisation, her problems goes beyond budgetary allocation from the federal government because the organisation itself lacks transparency; it has not been able to convince reputable investors. The non availability of a verifiable financial statement over the years, frequent changes in management and leadership in the supervising ministry are other contributory factors. Although the ministers are from the same political party they have divergent policy trust for the organisation, while implementation most times ends on the drawing board. FAAN can survive and generate funds for the treasury if we give reputable airport companies the contract to manage FAAN for a minimum of 10 years. Expertise is required in airport management and in generating non-aviation income. One of the main reasons why BAA is seen as a model is its success in bringing the contribution of non-aviation income to about 70% of total turnover which presently is about 25% in FAAN. Airports world over are seeking to increase non- aviation income. The UK experience of privatising worked well in a matured political society after being a regulated environment for decades. In less developed countries like ours, governments should be tilting towards building and enhancing the transport system rather than just offloading the assets. This is to avoid a situation whereby we move from ugly state-owned airports to even uglier privately owned airports. It is noteworthy that most reputable private sector investors would not consider buying an airport with fewer than one million passengers. This is why airports have often been sold as a package - good and bad, small and large, domestic and international. In achieving the objective, the government should as a first step invite reputable international airport management companies, who will often achieve what governments can no longer take care of - improvements in capacity, efficiency and safety. These private managers are internationally recognized airport operators with track records who can be sourced and verified by a click on the mouse. They will act as advisors or management consultants to government within a limited time frame. I am not referring to the usual masquerades that form a ‘quickie’ consortium and rush to Corporate Affairs Commission for registration and will bid and win using Padi- Padi in government. During this period the bid winner should be given a free hand to manage, restructure and position the organisation for a Public Private Partnership or partial privatisation. The management company will ensure compensations and adjustments are provided for all collaterals. Organizations such as Intervistas, GMR, Macquarie, Ferrovial e.t.c. Another option is a PPP arrangement though it has been turbulent in aviation but quite peaceful in shipping and other sectors of the economy. We must endeavour to find a lasting solution to the turbulent PPP arrangement in the industry. It is also a sad realisation that all concessions in the industry have been very messy which is a reflection of the process from the beginning, therefore all parties must be humble enough to accept that at a point in the concession process fairness and transparency which is the hallmark of an efficient concession process was breached. The concurrent favorable judgment of Bi-Courtney in court has made me come to the realisation that principal personnel in FAAN and the Ministry at the period, when this concession and others were signed, were either compromised or exhibited little knowledge of the legal booby traps in the agreement. The midwiferies of this process the Bureau for Public Enterprises, Infrastructure Concession Regulatory Commission, National Council on Privatisation, Due Process Unit, Bureau for Public Procurement, Nigeria Civil Aviation Authority and our Ministry need to get their acts together and bite when necessary using requisite acts and ensuring transparency from the scratch. This is a difficult call considering the concurrent misstep of the PPP processes in the industry which has made the process disappointingly slow. Companies that have been badly bruised by our PPP include Aeroport Gateway, HIC, Maevis, Bi-Courtney etc. We should not despair but find that symbolic and smooth nexus between government and investors. It is usually built on project conceptualization, funding, political will and preservation of contract. I must also point out that we are not politically matured for privatisation and cannot manage it, we mismanaged the private jet issue by making it more political than safety which is the bedrock of the industry, it will be replicated in the terminal and parking usage if we privatised. The BPE wants to start with Abuja; an airport that was concessioned to Aeroport Gateway and annulled a couple of months later, only to surreptitiously handover the GAT terminal of the same airport to a private organisation sometime last year without due process. Malaysia Airport Company recently purchased Istanbul airport in Turkey just like the Spanish company did some time ago with some British airports. Our abysmal PPP appraisal will result in severe diplomatic backlash if we short change a foreign organisation. If we insist on privatisation then we should consider the clustering option whereby a major airport will be taken along with other unviable airports within the zone. This will reduce FAAN's liability while they concentrate on regulating, monitoring and securing the airports. Clustering takes the airport in totality rather than the cherry picking option. The Argentines took the 30 airports in totality using funds from the viable to support the unviable ones; the Indians divided the airports into green field and brown field before privatising. To protect the public, airlines and other airport users, the Indian government established an independent regulatory body to monitor and regulate the public and private airports. This will ensure compliance to benchmark service level and generally resist any form of monopolistic tendency. They also set up a scheme called “Viability Gap funding”, to protect, attract and support investors for Non- Viable airports. The government provides funds which can only be accessed by interested investors through a bidding process. Also, the government ensured states where these airports are located are not left out by providing an additional state support agreement to boost the confidence of investors, while also wielding a stick called “Liquidated Damages,” which are charged for defaults. These countries took the airport in totality, the common factor in these agreements are capital injection, improvement of airport facilities, financial returns to government annually, protection of public interest and other operators. Also the agreements were clearly stated and open to the public right from the bidding stage while the use of penalties for default or delay were specified. Luckily some states in Nigeria have been building new airports without waiting for the federal government. States like Jigawa, Imo, Akwa-Ibom, Osun took the bull by the horn. It is laughable and unfair for the federal government to say they are planning to build airports in Bayelsa, Kogi, Nassarawa, Ogun and Kebbi states when these states can emulates their counterparts by building and sourcing investors as partners in developing an efficient airport. If the federal government has funds to waste on those states they can as well use it to improve and expand neighboring airports owned by them. Port Harcourt, Ibadan, Makurdi, Sokoto and Akure airports respectively can benefit from this fund considering their derelict state. We will get it right if we juxtapose these options while ruminating over our socio-economic environment, whichever option we choose must take all the federally owned airports, rather than cherry pick. We also need to take a deep breath and commend the hard working operating staff of FAAN whose allocation come in trickles but are forced to crack their heads, borrow money to manage airports under their watch and maintain the new terminals that should have been bequeathed on the contractors for a minimum of one year. The problem in FAAN is not privatisation but bloated contract debt, political interference and appointees that have made the organisation top heavy. It has increased its running cost, duplicated positions while they subtly run errands for their pay masters through allocation of contracts. We are waiting for the Minister to act its four months now of excessive grammar, garlands gathering and inherited exuberance. He should encourage continuous improvement of airport infrastructure without recourse to public funds which must be complemented by having vibrant flag carriers. Therefore the government should immediately initiate a process of moving our airlines from individually owned to airlines owned by Nigerians. It’s a tonic needed for them to successfully key into public oriented palliatives and policies. In concluding concessions and privatisation is the way forward, they must be accompanied by transparent, robust and independent economic regulation supported by effective industry consultations.

FOREIGN AIRLINES: ABUSE OF NIGERIAN CONTENT AND STAFF

The foreign airlines operating into Nigeria need to brace up and correct glaring anomalies noticed in the treatment of Nigerians working with them and the sanctity of their operational guidelines regarding the Nigerian content as stated in documents submitted to NCAA and the bilateral air services agreement (BASA) signed by our respective countries. Workers of Air France/KLM in Nigeria recently embarked on a warning strike to drive home their agitation for better working conditions and improvement of salaries, under the leadership of NUATE. The management response was simply distasteful. Rather than dialogue and negotiate since it was a warning strike, they tried to break the strike by hiring temporary charlatans to run the system at a considerable security risk to the system, airport and nation at large while also using all intimidating tatics to subdue the staff . Their pilots have given notice for a warning strike, while other staff domiciled in their base have done so in the past without getting the same response from Management. Rather they negotiated and prepared their customers for the strike by cancelling flights, offering refund or allowing change of travel plans without penalty. These carriers lodge their expatriate staff in ikoyi, Victoria Island etc, and also provide police escort and protection right from the airport to any point that catches their fancy; all at a huge cost to and detriment of the local staff take home pay. This opulence is funded by revenue generated from Nigerian passengers and primarily from our public sector that fill the upper cabin irrespective of price and season. Some of the managers brought into the country by these airlines AF/KL inclusive have taken jobs designated for citizens of the host country while the NCAA looks the other way. The NCAA should sit up and protect the nation from the predatory practices of the foreign airlines, they simply need to defend their governing act and ensure compliance. Some years back, Air-France opened a sales outlet in Port-Harcourt in defiance to the rules of engagement, while BA stopped paying commission to our travel agents. These and other acts are the regulatory and competitive loopholes latched onto by the foreign airlines. The blame lies fully with the NCAA and the Ministry that approve while also increasing frequency and gauge without due diligence. If the government does not know how to save Nigerians and the industry in particular then I advise they speak to the Venezuelans who gave stringent conditions for repatriating revenue generated from their soil, The foreign airlines threatened, begged and voluntarily reduced frequencies and gauge. Also the Russians, Chinese and Israelis have fashioned policies to protect their carriers and professionals. Do I need to remind us that Air France operates into Bamako and Ouagadougou only yet have commercial partnership with Air Burkina and Air Mail, these carrier operate the vilified MD 83s which are used to lift Air France passengers to points beyond Bamako and Ouagadougou respectively. KLM invested in Kenya Airways while they (AF/KLM)jointly operate twice daily to Lagos and once daily to Abuja and PortHarcourt. The largesse of the Ministry and consistent bickering between the Federal and State Government gave them and others the leeway. The price for us is the non participation and investment in our carriers while Nigerians working with them are short changed to the detriment of the country. Lufthansa duped us some time ago when their frequent flyer Mr. Omotoba who was then Minister for Aviation signed away extra points and frequencies under a warped agreement that LH will in turn develop our industry commercially. May be his mileage account was developed definitely not this industry. Airlines world over are still investing and partnering, here are some examples; Singapore airlines just partnered with the TATA family to start a new carrier in India; Ethiopian Airlines has just partnered Malawian government to start a new carrier and also uses the Togolese based ASKY airline to undercut us; Etihad pretends to compete with Emirates but for those that can discern they complement each other; they bought shares in Air Seychelles and lately got Alitalia under their belt. Why are Nigerian airlines being bypassed? Even the wobbling and fumbling super eagles went to South Africa last week to play against Bafana Bafana on SAA bypassing Arik that operate to Johannesburg. We shot ourselves in the foot, and we will increase the wound and the debt if we touch the national carrier project. What we need is a national airline policy that will modernize ATC, stabilise fuel price, improve regulatory reforms, strengthen our carriers and increase private participation. If we develop this policy flag carriers will blossom and a national carrier will naturally germinate from there.

DG NCAA: SELF SERVING UNIONS

The unions are at it again - negotiating, arm twisting and queuing behind their preferred candidate for the position of DG NCAA. One of them was bold enough to remove the mask, the others hid behind a new body in a recurring shadow boxing between these unions. The executives of these unions always want the DG in their pockets, so spouses can get accelerated promotions, juicy courses and other illicit benefits. The joint aviation union body (AUGA) comprising of all unions and associations in the industry was formed some years ago to spearhead collective issues in the industry. Their last action was a couple of months ago when they requested for an aviator to replace Ms Oduah in the ministry. It is an empty and unnecessary threat for a single union to give a 21-day ultimatum to ground the industry without getting NEC approval, or carrying other principal associations and unions along. The inter union rivalry played out after the DANA crash, which resulted in the unceremonious exit of the respected and acclaimed Dr. Demuren. It repeated itself during the last cabinet reshuffle, providentially all their preferred candidates lost. The DG NCAA is the most sensitive position in the industry and we must be cautious in our selection process to avert a repetition of the calamitous entry and exit of the last DG, in an industry already divided into four groups with differences on replacement process and persons. The first group is angling for the nominee, Capt. Muktar, whose name has not been submitted to the Senate for confirmation. It is not smooth sailing for him. There are alleged petitions from his colleagues concerning his eligibility based on his work ethics and other cockpit issues. I feel for him though, considering he has already handed over his job at Accident Investigation Bureau. He should not be left in the cold, a soft landing will be more appropriate if he does not get the confirmation. He can be a good replacement for any of the two aviation Special Assistants in the Presidency. One of them has over stayed and is completely detached from the industry, while the other used the position as pensionable gift. The second group is agitating for the Acting DG, Engr. Adeyileka to remain and continue in the acting capacity till thy kingdom come. Are we too short sighted to see the dangers of keeping him for too long in that capacity? It breeds instability and encourages corruption and servitude. We are all witnesses to the last Acting DG's purchase of bullet proof and other vehicles as if they were going extinct. The acting capacity is too long and unhelpful to the industry. The third group, using a serving governor as arrowhead wants Capt. Fola Akinkuotu, who was unjustifiably removed to be reinstated to complete his tenure. The baggage here is that during the few months he spent in office, he did not show the spirit of an ''OMO AKIN'' neither did we see the ''Egin'', a symbol of strength usually exhibited by his people. Incidentally, he is from my maternal home. He kept himself away from core industry players, and stayed in the cocoon of Abuja players in a bid to protect his job. Sadly, the job lost him. Under his watch NCAA lost leadership to NAMA, while a legal consultant held him hostage, holding extended meetings, without attending to critical files. Directors and other critical staff watched bemused. The story of that consultant and intrigues is for another day. The fourth group, which I proudly align with, wants the position advertised for our best brains to come forward. It should be open to all Nigerians within and outside the country. The head hunting should be given to a reputable organisation and the report submitted for auditing. In strengthening that organisation, we must go further by advertising all top positions, while efforts must be made to bring officers that have soiled their hands yet walk with irritating swagger in the organisation to book. All groups must at least be united in the defense of the NCAA Act, autonomy and sanctity of their regulations and processes. The position of DG has tenure and therefore needs clearance from Senate and removal should follow due process as espoused in the NCAA Act. The incoming DG needs to be bold, independent, and conversant with all regulations and most importantly, defend our carriers and ensure growth by having a delicate balance in safety and economic regulations. We do not need a DG that regularly goes to Abuja to see the Minister and implements all directives from the Ministry to the detriment of the industry. International sanctions may apply, if we continue to shackle the regulator. The next DG should be given enough space to perform and the process of appointing a new one must start immediately.