The Managing Director of Arik Air, Chris Ndulue has said that inadequate and obsolete infrastructure at Nigeria’s airports, restrict operations of Nigerian airlines and make scheduled air service unprofitable.
Ndulue told THISDAY at the weekend in Lagos that when an aircraft that should be operated at least for 16 hours, airlifting passengers from one destination to another, is used only for eight hours, the airline incurs losses because what revenue that was made cannot offset the costs incurred in the day’s operation.
He explained that if the aircraft is able to operate for up to 16 hours, it could generate enough revenue that profits could accrue after deductions of expenses but the failure to operate to this number of hours is caused by the lack of airfield lighting, power and other infrastructural facilities at the airports.
“We have problem of infrastructural challenge at the airports, which restricts operation in Nigeria. So you are utilising your aircraft for about eight or nine hours instead of about 16 hours. This is a major problem because if you don’t utilise aircraft to a certain level then you cannot make profits. This is obvious. So the important thing is that we have to address this infrastructural challenge,” Ndulue said.
The Arik Air Managing Director also pointed out that the operations of domestic airlines is further hampered by the fact that the Ministry of Aviation arbitrarily issues multi-entry points to foreign airlines, which enables them to fly to more than one airport in the country, noting that this kills local carriers because it limits their market.
“The Ministry of Aviation is incurably insensitive. The issuing of multiple designations to foreign airlines impacts negatively on every domestic airline. It eats up domestic operation in addition to eating up international operation. So it is not good for any airline, including Arik. But the important thing is that we need to realise that industries have to grow from one stage to another.
“We need to find out where our aviation industry is and also the kind of approach we should adopt in developing the industry. If it is at infancy then we must adopt the infant industry kind of approach. If it has matured then we have to look at it and approach it with policies that are suitable for a matured industry. But we know that it is not a matured industry yet; so we need to do those things that are important for us to get the industry to grow from infancy,” he said.
Ndulue said that there should be conscious effort by government to grow the aviation industry and reap the gains therein in the long run and that government can do this through favourable policies aimed at developing local carriers and one major way of doing this is to make funds available for single digit interest rate, long –term loans for the airlines.
“If we don’t want our airlines to go to the desert in the US and pick aeroplanes that have been lying there for about five years and then get them into the air in Nigeria; if we want them to buy aircraft, just like other airlines do, then how do we fund it? Is it by borrowing from local banks at 24 per cent? “We need to find a solution to that. Some industries can have dedicated funds. Nobody is asking for free money.
“And a lot of people talk about aviation fund; no money was given to the aviation industry so far. Some refinancing that we had done was just for the benefit of the banks. So we need to move away from that and invest in aircraft acquisition. Then you can access this fund. We are willing to pay back and also pay interest on it. So nobody is asking for free money,” Ndulue also said.
