Over the past two-and-a-half decades,airlines’revenues have been declining. Stakeholders blame it on rising operating cost, policy inconsistency and reduced autonomy for regulators. Experts at the just-concluded Airport Business Summit and Expo in Abuja said urgent steps should be taken to salvage the sector, KELVIN OSA OKUNBOR reports.
ALL is not well with the aviation sector. Some factors have led to the declining revenue flow to the sector in the last two and half decades, thereby threatening the growth of civil aviation.
Stakeholders, including the Director-General of Nigerian Civil Aviation Authority (NCAA), Captain Mukhtar Usman, who spoke in Abuja last week at the Airport Business Summit and Expo, have called for urgent steps to address the funding challenge of airlines.
They urged players to re-examine the deregulation, liberalisation, privatisation and competition among carriers and their effects on the industry.
Usman said the global industry is faced with increasing costs of providing standard air transport services at a time passenger and cargo traffic are dwindling with declining purchasing power of passengers and shippers.
Besides, aviation agencies, he said, must look beyond the high cost of providing standard air transport services and continue to rise with innovations in airport and air navigation facilities to achieve customer satisfaction.
This arrangement, he said, had put airlines under pressure as they struggled to meet up with rising costs of operations.
Citing Nigeria, Usman said carriers were grappling with huge cost of aviation fuel, which accounts for over 50 per cent of their operating costs.
He said the high cost of funds and the steady devaluation of the local currency has impacted on the expenditure of domestic carriers, which carry out aircraft maintenance, pay for some crew members and aircraft insurance in foreign currency.
He said in the last 25 years, many small airlines around the world have gone under due to costs and capital recovery challenges.
Some major airlines, he added, have either recorded losses or shut down.
But, he said, there are few areas where significant achievements have been recorded in the operations of low cost carriers, which pioneered a shift in air travel.
He said: “However, one of the few areas in which significant performances have been recorded is the operation of low-cost airlines, which have benefited from a shift to cheaper travel.
“This is because they use smaller and more fuel-efficient aircraft and extend their networks to small and remote aerodromes. This means taking their operations to the grassroots and aiding the distribution of goods and services to, as well as the development of the hinterlands.”
Usman said the challenge Nigeria and many other countries are grappling with is how to create an enabling environment for airlines and other economic activities to flourish. ‘’If we are able to achieve this, we would ensure a sustainable air transport industry,’’ he said.
The aviation industry,Usman said, could accelerate its growth if government and players address fundamental challenges.
Usman said: “The continuing attempt, mainly by the political leadership, to ‘domesticate’ the global minimal standards and recommended practices that sustain aviation worldwide in a way to align with Nigeria’s local politics and local economic minima. This has led to reduced autonomy for the regulator and key organisations and their inability to a large extent, to determine and ‘control’ their manpower programmes, for instance: number and quality of staff, placement, training, thereby negating professionalism.
“Lack of internal leadership succession plan. The managements are not groomed from within but based on political appointments, and this affects consistency and continuity of policy implementation, career progression in the industry.
“Lack of political will to firmly and fairly apply the available policy and regulatory instruments in a consistent manner; and this tends to erode steady growth, integrity and professionalism in the industry.
”Inconsistency in policies and policy enforcement has further eroded investors’ confidence in the industry and this inconsistency stems from the influence of different political interests that hold sway at different times; so industry development partnership with third parties are hindered.
“The combination of unwholesome political and moral (corruption) influence have been the reasons operators would not remit the statutory charges they receive from service users to the regulatory and service organisations, thereby undermining industry development and defrauding the service users.’’
Usman, while proffering solution to the challenges, he said: “The national political leadership should ensure that square pegs are put in square holes, giving the regulatory body the necessary autonomy by resisting unnecessary interference in the latter’s statutory operations.”
He said the government’s interference should be limited to ensuring an enabling political and economic environment to engender economic sustainability and viability of the industry.
Also, the Managing Director of Federal Airports of Nigeria (FAAN), Saleh Dunoma, said putting infrastructure in place would attract investors to the industry.
FAAN, he said, has put in place, some carrots to attract investors.
He said: “The Federal Government of Nigeria as the primary investor in Nigeria’s 23 airports is gradually opening doors for genuine private investors to partner and work with the Government to explore the various opportunities in the sector.”
He explained that beyond improving efficiency and passenger facilitation, the new terminal facilities, when completed, would bring up opportunities for more investments to make the airports more user friendly and offer passengers a new travel experience in line with international standards and practices.
Also, the Rector, Nigerian College of Aviation Technology (NCAT), Captain Samuel Caulcrik, said massive investment in infrastructure is the panacea to sustainable development in air transportation.
He said the industry must pursue smart, coordinated and cooperative manpower development strategy for it to develop.
He observed that availability of qualified personnel is the propeller for the growth of aviation in other countries.
He said: “It is the quality and proficiency of the aviation personnel that can credibly birth a safe air transport industry, build air travelers’ confidence, make valuable contribution to the nation’s Gross Domestic Product (GDP).”
The NCAT chief said despite the challenges facing the industry, progress had been achieved.
Organiser of the expo, Mr. Fortune Idu, said for the industry to continue to improve in the delivery of quality passengers experience in safe and secured manner, policy makers, aviation professionals, air transport investors and users of air transport would need to meet periodically to share information.
Such experts, he said, should deliberate on the future of the industry and help to direct national policies, planning, programmes and projects towards improving airport facilities, air transportation infrastructure and operations.
He said: “A sound airport development, concept, plan and programme are vital for a viable, sustainable and safe total air transport system which also has direct positive impact for fast tracking economy development.’’
Idu said the expo presented the industry from the airport perspective as a link to the development of cities and regional economies.
He said summit was a platform for industries with dealings with the airport, including airlines, retail, security, safety, technologists, taxi firms, hotels, tourist attraction firms to network for the growth of air transport.
He said: “The summit expo help airports and the cities market their profiles and make them attractive for airlines and investors by showcasing a one stop information portal for; passenger projections, facilities, infrastructure, potentials and essential amenities of the region that attracts travel and investment.”
