Experts in the aviation industry have agreed that for Nigeria’s aviation industry to develop and contribute significantly to the nation’s Gross Domestic Product (GDP), provide jobs and indigenous airlines compete effectively with their counterparts overseas, the federal government must evolve strong economic regulation to build strong carriers with capacity.
The experts also said that although the Nigerian reality wouldmake it difficult to have a successful national carrier, the federal government should continue to encourage Nigerian airlines to grow into flag carriers that can efficiently operate international, regional and domestic flight service.
A flag carrier is described as a transportation company, usually an airline or shipping company that is locally registered in a particular country and enjoys preferential treatment or privileges from that country’s government, especially for international operations.
This is the kind of privilege, which governments give to their national carriers to protect them from competition, and provide them with adequate financing to serve the interest of the country and also carry out special services for the country.
National carriers emerged as the second phase of air transport ownership after the invention and establishment of airborne vehicle as a means of transport, largely wholly owned by government but over the years, economic realities have tinkered with government ownership of airlines, as the private sector, known to manage business more effectively than government, took over the hitherto national carriers from government ownership.
However, in some countries, national carriers are wholly owned by government like Ethiopian Airlines, South African Airways but independently managed without government interference. But aviation stakeholders are of the view that with political and economic reality in Nigeria, it will be difficult to establish a national carrier that is accountable, successful and meant for the long term; so, to bridge the gap, government should support existing Nigerian carriers and help them to provide the service, which national carriers provide for some countries.
Industry stakeholder and member of Aviation Round Table (ART), Group Captain John Ojikutu (rtd), said the aviation industry has degenerated over the years and that the only way to rebuild the industry is to empower domestic airlines to build strong capacity.
“Our situation now in commercial aviation is worse than we were during the era of the Nigeria Airways, Kabo, Okada, ADC, etc. If most of these could be used for the ECOMOG Operations, they were good as flag carriers. We don’t need national carrier any more but flag carriers. We never had strong knowledge of Aviation Economic Regulations but now we have but not effectively enforced. Any National carrier would become government carrier and the enforcement of regulations on it becomes difficult as it is on the government airports.
“We should do what is done in the US and UK. Make flag carriers out of Air Peace and Ibom Air as the credible ones like Delta, United, etc in the USA and BA, VA (Virgin Atlantic Airways), etc in UK. The government (FG/36 states) can give support of 10 per cent in the shares, public 30 per cent and 60 per cent for the owners. Flag Carriers are national that carry the flag as Ambassadors on the international BASA (Bilateral Air Service Agreement) routes. Unless we think along these ways, we cannot develop or progress commercially,” Ojikutu said.
Speaking in the same vein, the Managing Director, Flight and Logistics Solutions Limited, Amos Akpan, acknowledged the importance of national carrier and noted that ideally the national carrier of old cannot thrive in Nigeria’s current realities and the kind of national carrier that existed in the past could emerge if given out to competent private organisation to manage in line with standard recommended practices for corporate governance with targets and performance measurement indices reviewable periodically, citing examples with Emirates, Ethiopian, and Qatar Airlines. Ibom Air is typical example in Nigeria.
He, however, noted that such national carrier cannot work in Nigeria because “the Nigerian environment is unique and I think it would be difficult to guarantee continuous non-interference by the federal government in the course of regime changes where political patronage over ride meritocracy.”
“I recommend that the current strides be continued where the federal government supports Nigerian airline operators to grow. To support them with guarantee to access finances on terms that enable them remain operational to repay, grow the traffic and expand the routes. Support the establishment of MROs (maintenance facilities) that develop capacity to repair and overhaul aircraft parts. Create hubs in Lagos, Abuja, Kano, Enugu and Port Harcourt. Strengthen the capacity of the regulator to enhanced oversight. Set up framework to insist on the practice of corporate governance by the management of the airlines. Provide support for Nigerian airlines to access and participate in air services agreements,” Akpan said.
He projected that Nigerian airlines will grow to compete favourably with other operators worldwide if given the support they need from government.
“After all, these foreign carriers are supported by their national government. If you want your plant to grow, water it. The concept of private sector – government collaboration is an imperative to growing our aviation industry. For instance, government has to ensure compliance on duty-free policy for commercial aircraft spare parts. This would reduce delays in returning aircraft into service from maintenance. Government should improve on allocation of foreign exchange to airlines for on-time payments on lease obligations,” Akpan advocated.
During the recent League of Airports and Aviation Correspondents (LAAC), which was held in Lagos, industry stakeholder and CEO of BeluJane Consult, Chris Aligbe, said the only way Nigerian could have strong airlines is if national carrier is established
“I also do believe today, tomorrow, I believe in a national flag carrier. We cannot pull this country up without this. The capitalization is low. Look at airlines, how many partners do they have.I look at AWA (African World Airline), AWA has about 12 formidable partners, alliance partners, world-class airlines. Look at TAAG Angola, just look at them. When they have these, they are expanding their markets, economies of scale,” he said.
But AWA has only eight aircraft, which include Bombardier Dash 8-400 and Embraer E190 and only operates 10 destinations in West and Central Africa. When compared to Nigerian carriers, airlines like Air Peace, Ibom Air have higher capacity and as noted by the Chairman and CEO of Air Peace, Dr Allen Onyema, at the conference, strength of an airline is not just judged by interline and partnership; it is also judged by capacity and destinations.
“I have heard all this talk about the national flag carrier. It is a moribund idea all over the world. Government has no business doing business. It will fail like a pack of cards. We can’t continue to do this to ourselves. And people are listening and thinking that that is the truth. Air Peace is far bigger than some national carriers in Africa,” he further said.
It is also worthy to note that out of all the national airlines that exist in Africa, only Ethiopian Airlines is consistently profitable; many others record losses, but South Africa Airways, Egypt Air are vehicles that support the well-developed tourism industry in those countries.
Aviation experts have, however, commended the President Bola Ahmed Tinubu’s federal government and the Minister of Aviation and Aerospace Development, Festus Keyamo, that decided that the focus of the administration would be to empower domestic airlines and give them the needed support to boost their capacity and enable them operate international destinations.
