Problems of indigenous carriers, by experts

Our Reporter

Chief Executive Officer (CEO), Centurion Securities Limited, Group Captain John Ojikutu (rtd) has taken a swipe at domestic carriers urging them to stop blaming problems for their woes. Ojikutu said recent lamentations by indigenous carriers portray them as operators with limited institutional  memory as they continously hold government responsible for their failings in business.

Speaking in an interview in Lagos , last week he said the operators only latched on how government failed to put in place policies that would promote the business, but failed to enumerate steps and efforts put in place by government to pull them out of the woods.

Ojikutu said the airlines were only bent on complaining about what government did not do, rather failed to list interventions by government in the past. He said : ” At a recent conference in Lagos there was  an outpouring  of rhetoric of blames on the government by the operators than on themselves especially by the private airlines. The blames ranged from the lack of financial support from government to the private airlines to boost their investments in the sector. The blames also included government “policy” that substantially exclude domestic airlines from BASAs operations which many believed are skewed to favouring and benefitting the foreign airlines more than the domestic airlines.

” Nobody  reflected on the private airline earnings nor mentioned the additional government intervention funds of over ?200 billion to the earnings that was given to six private airline operators in 2010 and 2012 for sustaining their operations. There were also no mention of the government wavers of custom duties on imported spares for the domestic airlines aircraft nor the removal of VAT on private airline earnings and so forth. Yet in spite of all these financial concessions, many of the private airlines still incurred huge and recurring debts to the government services providers on their operations.

“The government was accused of using its policies for suppressing the growth and ‘killing’ operating and prospecting airlines, but one would wish to ask; which government policy is killing or has killed airlines and which airlines were killed by government policies?

“As there are divided political, social and economic interests at the various turn of governments, so also are divided and most times conflicting interests in the operations and regulations of aviation and its allied services. Not many and not even the operators think seriously about the providers of safety and security services as they do about the private airlines. There are those who would stoutly support some domestic airlines at any cost than the others; there are others who would support the domestic airlines against government agencies and there are those whose interests in foreign airlines are more than the domestic airlines. There is less interest or pity for the services providers from the airlines operators as if they can do it alone without their services.”

Ojikutu urged operators to look inwards and consider what went wrong with the sector instead of embarking on a blame game.

He asked ? ” Rather than believe in the rhetoric of the airline blames of government killing their businesses, there are historical evidence suggesting that the Nigeria airline operators themselves kill their businesses not government. Are there records or evidence to suggest that it was government or its policies that killed airlines like Okada, Kabo, Bellview, Chanchangi, Sossolisso, ADC, Triax, Harka, Hold Trade,  of the 80s.

said he : ” Many of the operating private airlines of today are not financially healthy and are substantially not in compliant with the economic regulations of the Nigerian civil aviation regulations  because most of them are probably recycling the business plans of the earlier or defunct airlines.

“If private airlines are not financially healthy, there can be no appreciable investment for boosting the sector. Would government alone continue to invest in the sector and at the same time be providing financial support with public fund for the private airlines that have no key performance indicator programme in their business plans?

“Let’s be practical with sincere re-evaluation; we need to stop blaming everything on ‘government’ but ourselves.”

Meanwhile, an industry analyst, Mr Olumide Ohunayo has taken  swipe at indigenous carriers accusing them of agonizing over challenges of the sector , rather than charting the way out of the woods.

He said recent complaints by operators over how government organized bilateral air services agreement, shows they never learn any lesson.

He said the way government was packaging the controversial national carrier without input from industry players was enough evidence of lack of sincerity.

Ohunayo said : “ Our airlines would receive more foreign direct investment and offers of strategic partnership if airlines and the aviation sector were run on a transparent basis, securing long term funding, scarce access to capital  means playing by international rules.

“ Annual reports must be prepared to international accounting standards , quarterly reporting of operational statistics  and presentation of board meeting reports on strategic decisions among other things must be maintained.”