One of the challenges Nigerian aviation industry faces is infrastructural limitation, which has plodded the rapid growth of the sector. Our Correspondent reports that the inclination of government to embrace private sector investment in development of airport facilities may be the key to fast track development in the industry
Over the years, inadequate or obsolete airport infrastructure, lack of landing aids, state of arts communication system in the airspace, doppler weather rather for weather checks, modern security equipment and efficient fire cover have at one time or another dogged at the growth, safety and easy facilitation of air travellers at Nigerian airports.
The cry of industry stakeholders has become hoarse in their campaign to call attention of government to put development process in place to provide, modernise and upgrade airport infrastructure to ensure continuous growth of the industry.
Last week the discussion on aviation infrastructure came to the fore at the conference organised by the League of Airport and Aviation Correspondents (LAAC) in Lagos with the theme: “Aviation Survivability Amidst a Challenging Macro-Economic Environment.”
Speaking on the topic, “Infrastructural Impediment to Aviation Industry Growth,” the Chairman/CEO of Qwikio WA Limited and 2nd Vice President of Aviation Round Table, a think-tank body in the industry, Dr. Alex Nwuba, said: “Looking at the issue from the standpoint of the economy, operating environment, regulatory impediments, security issues, external factors and, of course, the Nigerian factor, one will observe that the economic situation Nigeria has eroded developmental indices and it is disincentive to growth.”
He noted that the current economic situation would affect infrastructural development of the industry.
“We are in a state of hyperinflation, and significant currency devaluation, in an industry that pays most of its bills in dollars and earns almost all its income in Naira; the inputs required for production have been impacted by multifold increases, while the marketplace demands a capping of revenues which they call high fares.The marketplace isn’t just the consumers, our passengers, but the basic demand and supply dynamics where the market clearing price is impossible to achieve for both buyer and seller,” he added.
Nwuba said that there are no exceptions to the challenges facing the aviation industry, not just airlines, noting that airlines are faced with huge costs from all service providers and airports are equally faced with what they deem, and manywill agree, are unnecessary charges.
Fuel Cost
He said that one of the major cost component in airline operation is the price of aviation fuel, which prices have been rising over the months, adding that this cost greatly influences the cost of airfares.
He observed that in different parts of the world, airlines hedge fuel, which tend to tame the costs, “but in Nigeria, such paraphernalia is lacking. Before 2017, Arik Air made efforts to hedge fuel but because there is no adequate infrastructure, such plan was put in abeyance.
“Also, the management of Bi-Courtney Aviation Services Limited (BASL) in the past wanted to build fuel hydrant, whereby pipes from storage tanks, located on the perimeter of the airport, carry fuel to various locations on the runway apron. At each of these locations, a manhole contains underground connection points or hydrants located just beneath the surface. BASL was not encouraged to embark on this project, which could have helped in fuel hedging.
“If we examine aviation fuel, which is probably the largest cost component in the airline business, the prices keep rising.In many climes, hedging provides some breather, here, the business environment provides no such opportunity. The industry has proposed importing their fuel but this like many proposals represents a poorlythought-through demand that will fail to address the issue.”
“Unfortunately, it appears that there are limited things the aviation sector can do, it neither controls nor appears to have any input into monetary or fiscal policy, apparent from how the issue of payments to foreign airlines was handled without any real word on solutions for domestic airlines.The result is that the economy acts as the single largest impediment to the aviation industry, creating instability in travel demand, price and cost inflation; as well as rising operations, high maintenance, and labor costs that erode profit margins and present an existential threat, “he said.
Operational Challenges
Nwuba said operational challenges for airlines remained an interesting one and generally includes delays and cancellations, overcrowded airspace, pilot shortages, maintenance and delay disruptions and supply chain disruptions.
According to him, the elements of these are generally considered impediments, which lead the industry to wrong assumptions, reflecting the well-known Nigerian environment.
“If Nigerians are asked about airlines’ operating challenges, one of the first issues to be named would be the need for slots to address the airline wave models that have many airlines leaving for Abuja and Port Harcourt at 7:00 am and the need to create a spread of the operations to address what will be addressed as challenges.”
He said that the problem with the slot model was that it would probably be a solution looking for a problem because it fails to address the character and the operating model of Nigerian airlines’ as well as competition in the industry.
“Going back to the 70’s, 80’s and 90’s when Nigerian airlines were unreliable and before the era of online booking systems, consumers were programmed to catch the airline on the ground, ready to go; and even today, with all of the available technology, including the ability to analyze airline performance and reliability data, and with the persistent character of inefficiency and delays, which the airlinesoften blame on airports and operational issues, consumers still make every attempt to catch the first and most likely the most reliable flight of the day, which will give advantages to the airlines that can get the earliest slots.
“I am sure that is not the intended objective of slots, which will distort the market and the nature of competition.However, I started with the statement that the situation in Nigeria is interesting because, if we look at the 7: 00 am wave for which we are demanding slots to address the issues, we do not see a long line of aircraft waiting in double-digit minutes to take off nor are there significant delays resulting from so many arriving flights,” he said.
Nwuba posited that at the level of Nigeria’s development in aviation, slot does not solve any problem and the same applies to terminal capacity and the number of counters to check-in passengers, handle the luggage and get them to the aircraft because “we do not see people missing flights because there aren’t enough counters even though some people will argue otherwise.”
“Rather, we must overcome the time mismanagement that is our character and the big man, airplane wait-for-me attitude.When we look at logistical delays like fueling for so many departures, we can identify the challenges clearly, asinefficiency; something equipment, manpower and efficiency can address.The issue of pilot shortage is a future problem, not a current one, but one that is going to become a major problem in the future, as we are making limited efforts in developing new pilots, engineers’ dispatchers and air traffic controllers, even though we can see the challenges ahead.I will therefore state that the operational impediments in Nigeria are the product of inefficiency and the lack of capacity in man and material,” Nwuba added.
Regulation
Nwuba also noted that one of the major challenges facing the aviation industry is regulation, remarking that regulatory impediments are the complex, complicated and ever-changing aviation regulations that add to operational costs, which are already out of control.He said the industry has not even taken seriously future environmental restrictions aimed at reducing carbon emissions, which will ultimately lead to higher costs and operational limitations, insisting that the lack of respect for government policy around duties and AOG (aircraft on ground) requirements add to the burden of the industry while evolving trade policies, which will have an impact on aircraft manufacturing and maintenance.
He added, “Personally, I am glad that the Nigeria Civil Aviation Authority (NCAA) has taken us up on the development ofalternative certification requirements that should ease and introduce new regimes that do not moderate the core safety mandates but allow new categories of airlines that would open up most of the idle or unviable airports, create jobs and expand the consumer offerings. This is one solution aimed at addressing the regulatory impediments.”
Aviation Security
Nwuba identified security issues in air transport to include the threat of terrorism, which calls for increased security measures that ultimately would add costs in the total budget of security architecture of the airports; while also adding to the inconvenience of passengers.
He emphasised that a major factor in airport revenue loss is the inability of non-travelling passengers to enter Nigeria’s airports and patronise the manycommercial enterprises which hurrying passengers are not supporting.
“In other words, due to sensitivity given to security at the airports, non-travelling public is not allowed easy access to even non restricted areas of the airports, like meeters and greeters and others like shops and service offering areas. It is indicated that majority of the passengers are in a hurry; so, they may not have time to patronize these business enterprises around the airports.
“Cybersecurity risks and the vulnerability to cyberattacks are impediments that must be addressed to prevent financial losses and reputational damage.And external factors which include geopolitical instability, conflicts and political tensions add to the impediment list and have the potential to disrupt travel routes and increase insurance costs.While natural disasters and extreme weather events are known to cause flight disruptions and damage infrastructure, we are fortunate to be limited to rain and dust.The next pandemic and possible global health crises may lead to travel restrictions and reduced demand,” he said.
Nigerian Factor
“I will now address the most significant impediment to the growth of the Nigerian aviation sector, which I mentioned earlier as the Nigerian factor. It is the impediment of doing and then thinking.The clear lack of consistency and policy somersaults and the lack of well-laid future-proof plans until reality stares us in the face, then we decide to draw up a new set of plans, which remains in the pending box until what we are doing hits another roadblock,” Nwuba said.
He indicated that the Nigerian factor include the failure of political leadership that head the Ministry to stick to the regulatory and constitutional roles; rather, they tend to micromanage the agencies, dovetailing everything to yield to their whims.
In his recommendation, he said that the industry needs a new and sustainable aviation business policy that drives growth and positions Nigeria for the coming common trade area for goods, services and in particular, a single air traffic market.
“Nigeria believes it has a large market, yet we see the same 5% of the population who have bank accounts as the percentage of air travelers. This is a huge impediment and at the same time an incredible opportunity.The question is, who will study the Azul Brazilian model or any other model that can be used to grow the industry?”
He posited that the identified challenges in his presentation are interdependent or interconnected; each amplifying the effects of others, noting that the aviation industry is constantly adapting to overcome these impediments to ensure sustainable growth.
“More effort must be made to address particularly the human factor and efficiency issues,” he advised.
