The Nation Newspaper

Tag: Nigeria Airways

  • FG approves payment of Nigeria Airways staff entitlements

    FG approves payment of Nigeria Airways staff entitlements

    The Minister of State for Aviation, Hadi Sirika, said on Wednesday the Federal Government has approved the payment of N45billion severance package to former staff of the defunct Nigeria Airways.

    The national carrier was liquidated by ex- President Olusegun Obasanjo’s administration in 2005, and the workers had been embarking on protests nationwide over their unpaid entitlements.

    Sirika told State House correspondents at the end of the Federal Executive Council (FEC) meeting that money has been approved for the settlement of the entitlements.

    “Governments, in the past, decided just to liquidate Nigeria Airways without tending to the issue of the entitlements of the workers and they have been struggling to get that paid. We came in and took it very seriously.

    “I’m happy to announce that Mr. President has approved N45 billion which has been confirmed to be the entitlements of these workers and Ministry of Finance has been instructed to pay the money. The ministry wrote to me last week that they have received the instruction to pay these workers, and therefore, they are setting up the modalities to pay.

    “You should know it won’t be paid through my ministry before somebody will say I take some of it. It will be paid by finance through a process, and that process will commence very soon,’’ he said.

    The minister disclosed that the Council approved the procurement of operational vehicles for Nigeria Port Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA).

    NAN

  • FG okays N45 billion to clear Nigeria Airways workers’ backlog 

    FG okays N45 billion to clear Nigeria Airways workers’ backlog 

    The Federal Government has approved N45 billion to settle the outstanding payments owed the workers of the defunct Nigeria Airways.

    The Minister of State for Aviation, Hadi Sirika, briefed State House correspondents at the end of the FEC meeting chaired by Vice President Yemi Osinbajo at the Presidential Villa.

    According to him, the Minister of Finance, Kemi Adeosun, has been given directive on the payment to workers of the defunct Nigeria Airways

    The workers had staged protests against the over 20 years debt owed Nigeria Airways

    Details Later…

  • Ex-Airways workers in Atlanta advocate for national carrier 

    Former members of XWT aircrew Atlanta chapter have called on the government to consider setting up a national carrier to ease the movement of passengers in and out of the country.
    Speaking at the Xwt aircrew convention 2016, the President of the association, Wola Adegbonmire said having a national carrier will not only transport people from place to place but, will serve as ambassadorial anywhere across the world.
    Adegbonmire explained that airlines do not only advertise their countries but create awareness.
    According to her, the Xwt aircrew made up of former workers of the Nigeria Airways, crew among others has been duly registered with the aim of creating awareness to the defunct national airline and public charity works.
    “This is a lawfully registered nonprofit organization that believe in bringing awareness to the defunct National Airline and public charity works. It is made up of former staff of the now defunct Nigeria Airways. Mostly predominant in this organization are ex-cabin crew, cockpit the crew and operations staff. We currently have several chapters in the United States of America, England and Nigeria.”
    She explained that the organisation was deliberating on ideas including ways of developing Nigeria’s aviation sector.
    While  commending members of the organisation, the President recognized the former SAHCOL boss, Dr. Olu Owolabi for his various contributions in ensuring the growth of the organisation.
    “I specially thank the Atlanta X-crew for a wonderful reception and making this convention a unique one. They assured us to just come and
    “I thank the Patron of this association in place of Mr. Olu Owolabi. He is not only supporting the association financially but in all areas to make us progressive and be in unity.”

  • Our Girls; PMB: Farmland is not ‘No Man’s Land’, NLC; ‘aguntasolo.com’; Roads or ‘Nigeria Airways

    Our Girls are still missing since April 15 2014. The military coalition is making progress. If done three years ago, we would never have had 20,000+ murdered and four million unhappy and often helpless ‘Internally Displaced Persons’. We must add as a cause of IDPs, the over 20,000 killed in the 20 year+ lethal Fulani herdsmen vs farmers war. Why do the herdsmen see farm land as ‘Federal No Man’s Land’ with ‘free’ cattle fodder, with no compensation offered? Is this a thinly disguised attempt to redress past failed ‘conquest and humiliate’ strategies? President Buhari must stop this war. The recent marches in Plateau and Nassarawa states where I did my NYSC in 1975/6 in Jos and Lafia leave me cold at the crimes committed. It is so easy to kill in Nigeria and we are so easy to kill. Just call yourself a ‘militia’ and you can kill at will. When Boko Haram is curbed, the same military is required for the Fulani herdsmen/farmers war, and the soldiers must ensure ‘‘Freedom and Security for Farmers in the ‘Front Line States’ ‘’.

    Happily the Third War in Nigeria, The Anti-Corruption War, is active at federal Level. All thieves must return amounts stolen and be imprisoned in proportion. A financial crime is as deadly as a violent crime. A crime is criminal, period! The term ‘Financial Crime’ must not make the crime ‘less criminal’, than the crime of an armed robber. It is not okay to commit a ‘financial crime’. Even law enforcement agencies ‘cooperate’ by charging such criminals with ‘MONEY LAUNDERING’ which has a MAXIMUM JAIL TERM OF JUST TWO YEARS, no matter the amount involved- N100,000 or N27billion! This is a legal scam law to deceive Nigerians that justice is occurring when it is criminal unwritten ‘plea bargaining’.

    For the anti-corruption war to work, it requires to progress from federal command and control for spread Buhari-ism to all states and LGAs for ‘national spread and federal character’ of anti-corruption. The NLC-led nationwide anti-corruption war march is not politics. The NLC and Co must practicalise things to guarantee the anti-corruption war’s success. The worker and the family will benefit from ‘Zero Corruption’. Every kobo stolen is stolen from people programmes aimed at making Nigerians own Nigeria, be they workers, children or retired. The NLC should produce ‘Anti-Corruption Ways and Means Guidelines’ and strategise to confront their own internal and also external corruption. The NLC and others must harness ‘useful Anti-Corruption information’. WHISTLE BLOWING MUST BECOME A RESPECTABLE PROFESSION with a Honours List and Role Model Status in Nigeria and Annual Whistleblowers Awards.

    The migration and trafficking nightmare are a sobering lesson for Africa’s corruption-prone leaders and thieves from public coffers. Under the uninspiring engine-rooms of corruption – the regimes of Babangida, Abacha, Abdusalami and Obasanjo – many Nigerians emigrated or were forced by circumstance to flee to Europe for normal work and even prostitution or died of thirst in the Sahara or drowned in the Mediterranean. The media should ban them and stop reporting every antic and word of these Ex-Presidents – a daily insult to Nigerians living in darkness. They richly deserve the Buhari anti-corruption treatment,

    The national anti-corruption project must be disseminated and domesticated nationwide in every village and by all organisations, societies, groups, forces and services. Let every honest Nigerian contribute to this anti-corruption war from Boy Scouts to PTAs. Every Nigerian will benefit from a bribe-free society. Bribery can be stopped immediately, overnight.

    Every Nigerian has experienced the corruption of the Nigerian uniform. President Buhari has an enormous task but in reality, it is easily achieved by delegation of authority and ready recourse to ‘termination of appointment (TOA) and ‘Pre-Signed Letters of Resignation’ from his management team. He can reverse this ugly but permanent stain on Nigeria’s flag by giving each ‘Head of Uniform and Organisation’ an ultimatum- a ‘Priority 1 Internal Anti-Corruption Drive’. ‘Stop Corruption Top To Bottom Immediately Today Or Face Sack in one month’. Give them one month to bring corruption to a halt. Invite the public to report to a ‘Corruption Monitor’ database. A monthly meeting thereafter will keep everyone on their toes and create the ‘ZERO CORRUPTION MODEL’. The Customs, Police, security agencies, VIO, FRSC, LGA road officials, SON, NAFDAC, judges, magistrates, greedy tax consultants and exorbitant levy imposers, road maintenance agencies, ministry officials, professionals, electricity [non]suppliers all on the long ‘accused of corruption’ list! They all need to be ‘under surveillance’ by anti-corruption citizens. By the time Buhari has ‘accepted’ the resignation of three or four successive IGPs, SON or NAFDAC bosses in three months, the police will fall in line from Constable to Commissioner as will the others.

    President Buhari should add ‘aguntasolo.com’ to his reading list. I agree that the national carrier  idea is strictly about pride and to be avoided like a plague in Nigeria’s weak economy. The New Nigeria Airways will cost us dearly but profit only 0.1% of Nigerians. Instead, that money could build many railways, 100 bridges and 500 roads used by 100% of Nigerians. After killing corruption, Buhari must have a legacy and plan to be more than ‘Buhari- The Anti-Corruption Tsar’ but also ‘Buhari- The Great Road/Bridge Builder’. He must avoid becoming ‘Buhari – the failed New Nigerian Airways Man’.  The Ibadan Lagos road is screaming to be completed. On Sunday afternoon September 13, it took seven hours to reach Lagos.

    ‘The national anti-corruption project must be disseminated and domesticated nationwide in every village and by all organisations, societies, groups, forces and services. Let every honest Nigerian contribute to this anti-corruption war from Boy Scouts to PTAs’

  • The great national carrier debate

    The great national carrier debate

    Should Nigeria have a national carrier? Yes, say some aviation experts; no, others argue, citing the liquidation of Nigeria Airways in May 2003. As it were, the national carriers of other countries have taken over the local aviation business, leaving domestic airlines with virtually nothing. MUYIWA LUCAS examines the arguments for and against creating a national carrier.

    The wide-bodied Boeing aircraft took off from the Murtala Muhammed International Airport (MMIA) in Ikeja, Lagos. It shot powerfully into the night sky with 100 passengers on board. Addis Ababa, the home country of the Airline was the first port of call. On the tail of this elegant bird is the legend: Ethiopian Airlines. Set up in the early 1990s, the airline has grown into an enviable global aviation brand.

    But, it is not the only foreign national carrier that has found the Nigerian route a veritable source of revenue because of the huge passenger traffic. Others such as British Airways, Virgin Atlantic Airline (another British airline), Royal Dutch KLM, Delta Airline, South African Airways, Emirates Airline, are exploiting the huge potential of the aviation market.

    The liquidation of the Nigeria Airways opened the door for these airlines to come in. The Nigeria Airways crashed because of  mismanagement, inefficiency, corruption and greed. Since then, the country’s airline industry has been on a steady decline. This, perhaps, among other factors, led to the clamour for the re-establishment of a national carrier.

    The agitation reached a crescendo during the tenure of the former Aviation Minister, Princess Stella Oduah, who hinted of setting up another national carrier. Princess Oduah  promised that the dream would be actualised   during President Goodluck Jonathan’s tenure.

    Princess  Oduah explained that the country would have three national flag carriers that will be owned by all Nigerians, run and managed efficiently by professionals to get the commercial and economic benefits from it, if the market potentials of the country is well harnessed. This would provide the country a second chance to restore the lost position it held in international aviation fostered in the days of the now liquidated Nigeria Airways.

    Although the dream did not come to fruition during Oduah’s  tenure, for the umpteenth time, the calls have found their way back into the consciousness of the public. And the reasons appear quite compelling considering that both national pride and economics are at stake. For instance, the several Bilateral Air Service Agreements (BASA) and ‘Open Skies’ policy agreement inspired by the United States (US) government favours national carriers and offers countries with well developed and efficiently managed international airlines, including a national carrier- a lucrative source of revenue. However, the absence of a national carrier has resulted in the designation of some privately-owned indigenous airlines as ‘national carriers’ for taking advantage of BASA and other international aviation agreements and policies.

    These airlines include Bellview, Arik Air, Virgin Nigeria, and Air Nigeria. Sadly, of these four airlines, only Arik Air is still operating. Bellview after its 2005 air crash in Lisa village, Ifo, Ogun state, has not been able to continue in business, though it metamorphosed into First Nation Airline. Virgin Nigeria, an airline formed in partnership with British business mogul, Richard Branson, has become history as a result of Federal Government’s policy reversals. Air Nigeria, coming from the ashes of the defunct Virgin Atlantic, has also been grounded less than one year after it was bought by the business mogul, Mr. Jimoh Ibrahim. Ibrahim, while announcing the stoppage of the airline’s operation, had promised to return the airline as a more viable entity in nine months. However, two years after, Air Nigeria is yet to return to the skies.

    The argument has, however, been that existing domestic airlines should be strengthened and made national flag carriers, instead of the government establishing any airline under any form or guise. Experts have warned of a repeat of the incidents around the defunct Virgin Nigeria Airways (VNA) agreement, which was also touted as a national carrier. This initiative of designating private airlines seems not to have achieved the purpose of a national carrier. A number of reasons account for this. For instance, lack of adequate funding remains a major constraint for airlines, making operational efficiency impossible for their.

    Yakubu Dati, General Manager, corporate communications, Federal Airports Authority of Nigeria (FAAN), argues that though financial or operational problems are not peculiar to private airlines, the situation has been further compounded by the capital-intensive nature of the business. Therefore, he says if for any reason, a private airline which was serving as a national carrier collapses, the government would lose a lot of revenue from operating its lucrative international routes which are covered by various bilateral agreements.

    Besides, he reckons that the government would be left with two choices of either pumping in money to the private airline to resuscitate it, or set up its own airline to fill the vacuum, in the event of such designated private airline collapsing. Hence, he says, various national governments have been involved in aviation for decades. Dati’s argument may not be faulted going by experiences in some Western markets, where state-owned and private–owned airlines do fail or run into financial turbulence. Examples include Alitalia, the Italian state-owned airline which failed; Luftansa, which has had financial problems in the past, American Airlines; North West airlines which went under.

    “The economic collapse of several indigenous airlines and wobbly finances of many existing ones again re-emphasise the need for a national carrier. The issue is not if there is a need for a national carrier, but what form it should take. The former aviation minister, Princess Oduah, made it very clear that she wants a vibrant aviation industry in Nigeria. She was not only talking about recreating a national carrier; she reiterated plan by the Aviation ministry to look into the problems hampering the growth of private indigenous airlines in the country and see how to assist them. Because the industry can only be vibrant in the country if there are several strong players, not just one or two,” Dati said.

    He listed some of the gaps that having a national carrier would fill to include stopping the financial hemorrhage from the loss of revenue by government from the lucrative international routes covered by BASA, and also positioning the country to benefit from the ‘Open Skies’ regime with the US- an agreement that has remained lopsided due to the lack of a strong national carrier and other strong Nigerian airlines plying international routes.

    The Chief Consultant and Chief Executive Officer (CEO), Belujane Konzult, a firm of aviation consultants, Mr. Chris Aligbe, said a national carrier is an old concept where the government owns 100 per cent or majority equity in an airline, thus making it to control it in terms of policy formulation, implementation and management as was the case with the liquidated Nigeria Airways. Aligbe said rather than embark on a national carrier journey, the concept of a national flag carrier should be adopted. Therefore, he explained that there should be a distinction between a national carrier and a national flag carrier.

    For him, the defunct VNA arrangement did not represent a national flag carrier as Nigerians were made to believe because the Virgin Group, owned by Mr. Branson owned 49 per cent equity in the airline, managing, supplying equipment and doing everything else to run the airline, and in the long run, the remaining 51 per cent equity held by Nigerians did not make any meaning. He said to have an efficient national flag carrier, a model in the form of that operated by the Ethiopian Airways and Kenyan Airways, are a perfect example of national flag carriers. This is because the government’s equity in Kenya Airways, for instance, is about 23 per cent, KLM, as foreign technical partner to the airline, has 26 per cent equity, while the balnace is owned by the citizens.

    Also, British Airways (BA) is owned almost 100 per cent by the British citizens, and therefore it fills the gap of a national carrier or entity by being designated as the national flag carrier; and because it is owned by the nationals, the equity can be traded on. This is a sharp contrast from Virgin Atlantic Airline (VAA), owned by Mr. Branson, who holds a controlling share of 71 per cent, while Singapore Airline holds about 29 per cent of the VAA share. By implication, it means that until an airline gets to that point that it is substantially owned by the country’s citizens, then it cannot be designated as a national flag carrier.

    “This is why VAA is called a British flag carrier and not a national flag carrier because of the ownership structure; its shares are not in the open market,” Aligbe explained. The same, he said, was applicable to Arik Air, which is  owned by an individual. At best, the airline for now can only pass for a Nigerian flag carrier, and not a national flag carrier since it is not owned by the citizens. Experts in the industry explained that the designation of an airline as a national flag carrier is of tremendous benefit, especially when it flies on the international route. This is because the status bestows a ‘sovereign cover’ on the airline, which is required as an international operator, because with that, the extent of meting out a shabby treatment for the airline is reduced.

    Stakeholders in the industry have also called for caution should government finally bow to the national carrier pressure. They advised that in whatever form, government must not have more than 10 per cent equity in the national carrier. This equity, they suggested, should be managed by the ministry of finance incorporated or the aviation ministry, while the remaining 90 per cent equity should be taken by technical partners, Nigerian citizens, individual or corporate bodies. Aligbe is of the opinion that this strategic model, if adopted, has immense benefit for the country and the local industry. One of these is that the airfare regime will become competitive, which will lead to other factors like improved service delivery. It will also reduce capital flight, which is very huge in the airline sector.

    The former assistant secretary, Airline Operators of Nigeria (AON), Alhaji Mohammed Tukur, however said rather than government establishing a national carrier, the problems of the industry should be addressed. For him, government should find a way of ensuring that domestic operators are on sound footing by deliberately putting in place policies that will protect them. Tukur, like Olumide Ohunayo, an aviation consultant, is livid that government signed blindly the open skies agreement, which he reckons has further crippled the domestic operators. Ohunayo and Tukur both castigated the open skies agreement signed by the country, saying it was done at a time when the country did not have airlines that were capable of operating efficiently. Besides, it has remained a great disservice to the domestic carriers considering that foreign airlines now fly to multiple points in the country.

    For instance, on November 6, last year, the Ethiopian Civil Aviation Authority (ECAA) and the Federal Ministry of Aviation were said to have signed a memorandum of understanding (MoU) to increase the number of weekly flights between the two countries. In the MoU, Ethiopian Airlines would fly 31 weekly flights to Nigeria from a previous 18. The airline, which serves 76 international destinations, including 45 in Africa was said to have been given the nod to operate a frequency of seven passenger flights and three cargo flights a week into the ancient city of Kano. Ethiopian Airline flies into Abuja, Lagos, and Enugu. Though the MoU also stated that one Nigerian airline would be allowed to fly the same frequency of flights to Ethiopia, no Nigerian airline plies that route.

    Tukur said there should have been an alliance between domestic and foreign airlines for local flight connections upon arrival in Lagos or Abuja, to other destinations, as this would invariably grow the capacity of domestic airline operators. “But we opened our skies and allowed foreign airlines to take over everything, and for this reason, foreign airlines don’t look at domestic airlines as partners. America will never allow such a thing in their country,” he said.

    Indeed, Ohunayo observed that countries the world over have protected their carriers by not engaging in reckless slots allocation, frequencies and most importantly commercial agreements. For instance, the South Africans have refused to sign the open skies with the Americans, same with Russia, China, Hong Kong, Mexico and some other countries. Brazil, he explained, though signed the open skies pact, the full implementation is scheduled for 2015. For China it’s the American labour unions, not the Chinese that are resisting the open skies agreement because of perceived job losses and cheap wages that will accompany the agreement. Japan, India, Australia, Switzerland and EU with bigger economy and obviously stronger industry, signed the open skies after Nigeria did, using strong negotiating tactics that ensured commercial valves were sealed for their carriers.

    The Philippines government through its central bank introduced financial instruments that made transfer of ticket sales less flexible; the foreign airlines grumbled and reduced frequencies while on the other hand San Miguel Inc is adding a $1 billion investment to its flag carrier, Philippines Airlines, for the purchase of a sizeable number of aircrafts. Philippine is a CAT- 2 certified country, and has flight restriction into Europe, yet it was able to protect its flag carrier to attract such investment.

    To remedy the situation, experts say that instead of forming another national carrier, which will end up as a failed project, domestic airlines should be positioned to be in international alliances.Tukur warns that the country is enclosed by airlines that have grown larger than their national size because they have gone into alliances and have become transnational airlines, such as Air France. “So we have moved from national airline to transnational, yet, in their own countries, they are the national flag carriers, but because of the arrangement they, they have so enlarged their size; the economy of scales that arise from this are incredible,” Tukur said.

    For instance, he explained that due to their large fleet size and expanded operational base, these airlines do not pay the same price for aviation fuel, as they get very considerable concession on price. This is because they are able to approach the multinational oil producers and marketers and negotiate at with them aviation fuel price and what they pay, taking advantage of their huge fleet size that are juicy for the oil marketers. Ethiopian Airline, Kenyan Airline, South African Airline, are all members of alliances, and this has exploded their market through alliance relationships, huge booking networks, insurance premium, amongst others. “Our own airlines are disadvantaged in this area and they cry everyday. That is why our people here will continue to have high cost of operation,” Tukur said.

    This submission may not be faulted. Statistics from the Belujane Konzult boss show that up to 40 per cent of the passengers flying on the Lagos-London route are going beyond the place and only 60 per cent stop in London. Of this, BA carried 96, 000 passengers in 2012, Arik carried 60, 000, and VAA carried slightly over 70, 000 passengers. Therefore, because Arik Air cannot fly from London to another country, it loses out significantly in terms of revenue; hence, the need for Nigerian airlines to expand their operations because once they can fly beyond point to point, then its good for them.

    The government, it is further suggested, should enforce the “Fly Nigeria Act” starting from its officials to ensure that at least, money coming from government should go to Nigerian airlines. Government officials must use indigenous airlines going to their destination. To ensure corporate bodies and multinationals fly indigenous airlines, it is being advocated that the use of an indigenous airline should be made tax deductible. This means that it is only when such companies comply with the fly Nigeria act that their expenditure on travels should be free of tax, otherwise, the company must be made to pay tax on travel expenditure.

    “The government money is sovereign money that belongs to all Nigerians so it should be spent to help Nigerian airlines; it’s like the local content agenda, so that we would not be encouraging capital flight. Corporate bodies will not be forced but when it comes to tax relief, then their compliance with the fly Nigeria act should be used and if they are found guilty, then they should not be granted any of such,” Aligbe canvassed.

    The search for a national carrier may be gathering momentum. But the question is; Do we really need a national carrier at this stage when our domestic carriers are almost in comatose, begging for viable policies to bring them back solidly on their feet?

  • Confab delegates turn down return of Nigeria Airways

    National Conference delegates yesterday massively voted against the revitalisation of the disbanded Nigeria Airways.

    The vote was taken as the conference considered the report of its committee on Transport chaired by Senator Musa Adede.

    The proposal was that the Presidencyshould take immediate action to revive the Nigeria Airways or in the alternative establish a new national carrier that will be private sector driven.

    Before the vote was taken, delegates were informed that the disbanded national carrier was yet to pay its workers while it is also owing some foreign companies.

    When the two options were put to vote, delegates rejected them.

    Delegates adopted the proposal to move all issues of marine business to the Concurrent List just as they also agreed that River Benue should be dredged to make it navigational throughout the year.

    The conference also accepted the proposal that for effective and efficient transport system rail, land, water and sea transportation should be decentralised to spell out the legislative competence of the federal and state governments.

    Delegates rejected the proposal to rationalise federal roads and hand them over to the federating units.

  • ‘National carrier days gone’

    ‘National carrier days gone’

    Soon, the government will launch a national carrier following the liquidation of the Nigeria Airways 10 year ago. But to the Chief Executive Officer, Jed Air, Captain Nogie Meggison, what the country should be talking about is a flag carrier because that is the trend worldwide. In this interview with KELVIN OSA-OKUNBOR, Meggison speaks on what the government can do to improve the industry.

     

    Why are domestic airlines experiencing high rate of mortality?

    It is very difficult to categorically state one reason or the other why domestic airlines fail in Nigeria. It is important to give you my background experience. Having spent over 30 years in the aviation industry, the factors that lead to airline failure or simply put, what some people refer to as the burst and boom circle of airlines, it is a combination of many factors. From a global perspective, anywhere in the world aviation is a barometer of the economy. It is the development in the economy that affects the sustainability and otherwise of airlines. Airline as a component of the aviation industry does not stand alone. It is the general effect of businesses in the economy that affects airlines. It is a great determining factor. It is the stability of the economy that affects airlines, their survival and its impact in the aviation sector. The strength or weakness of the economy has a huge impact on the sustainability or otherwise of airlines. Simply put, the growth and failure of many airlines is a direct determinant of the economy. Aviation does not stand alone; it is a reflection of developments in the economy. The effect of the economy on businesses in the country has contributed immensely to the high failure rate of domestic airlines, because airlines depend on the economy. The stability of any airline is directly proportional to the strength or weakness of the economy. You can tell the strength of any economy by its airlines.

    Is this the experience in other parts of the world?

    There is a direct correlation between the success and failure rate of airlines with developments in the economy. If you recall what is happening in Europe, for instance, we will understand how the strength and weakness of the economy is affecting airlines and their success or failure rate. Today in Europe you can see what is happening in the aviation sector. There is a direct link between the performance of the European economy and the airlines that operate there. Consider what is happening in Asia, the economy of the Asian Tigers is having a direct effect on the economy. Even, in the Middle East, the hot economic hub, you can see how the performance of the economy is reflecting on airlines. Because of the growth in the United Arab Emirates’ economy, that is why more airlines are springing up and doing well in that part of the world. In Nigeria, we have gone through our own economic boom and downturn which have affected the growth and development of domestic airlines. Airlines grow hand in hand with the economy.

    Is it the case of burst and boom circle for domestic airlines?

    People tend to think it is a circle that airlines just come and go. It is a pure reflection of the twists and turns in the nation’s economy. Rather, it is a different experience; aviation business in Nigeria is peculiar. It has its unique attributes and characteristics. Your feasibility studies may have been put together correctly by a team of experts on how to grow the airline business profitably, the truth is that the profit margin is so slim, compared to the turn over. The turnover is pretty high compared to the profit margin. The major challenge affecting airlines in Nigeria is interference. By interference, I mean external influences that affect the business that were not factored in when an operator was planning how to run the airline business. This factor is mostly responsible for the burst of airlines in Nigeria. It is also a contributory factor in other operating environments. External interference is a factor that is not calculated in the feasibility studies for the airline business. This factor easily affects the profit margins for Nigerian airlines. For instance, if there is war in the Middle East, it has a direct impact on aviation and airline operations in the area of the price of aviation fuel. This is part of the external influences or interference that trickle down to affect the fortunes of airlines from operational cost point of view. Another scenario, we can adopt is if there is an embargo on Venezuela, a member of the Organisation of Pteroleum Exporting Countries (OPEC) countries, it will affect the price of crude oil, from which aviation fuel is processed. The global price of crude oil could move around 10 to 20 per cent depending on the prevailing circumstances. If the margins of profit and loss in the aviation industry is about eight to ten per cent, you can see how the ripple effect of between 10 to 20 per cent change in the global price of crude oil could impact on airline operations . These are the factors that affect the growth and depletion rate of domestic airlines. These are purely external influences and interference that affect airline operations, which are not factored in at the initial stage when the airline feasibility was worked out.

    The consequence of this is that if the oil price index moves about 20 per cent, with the cost of aviation fuel contributing over 40 per cent of the cost of operations, this invariably affects the profit margin arising from increasing costs of operations from fuel alone. There is also the issue of interference from government policy with its attendant impact on airline operations. Today in Nigeria, the issue of government policy in the area of navigational and terminal charges just increased for non – scheduled commercial operators by aviation agencies is having a direct impact on airline operations. Operators are not opposed to introduction of charges, but would appreciate if such charges reflect the scale of their operations in a way that it does not put much pressure. For instance, if a $4,000 charge is introduced by aviation agencies for charter operations, we automatically know how such amount will affect charter airlines. If the average hourly charge for domestic charter for a flight from Lagos to Abuja is about $6,000, with a return flight averaging about $12,000, the introduction of $4,000 as charge for such operations will increase the operating cost for the airline by30 per cent. So such incremental charges will eat deep into the profit margins of the affected operators.

    What are the implications of such charges on the operations of airlines ?

    Let us be realistic, such a charge is already a threat to the profitability of any charter airline. This is because there is no way any operator makes 30 per cent profit on any flight to justify sustainable operations. These are the issues that affect the burst and boom circle of airlines in Nigeria. The scenario I have just given automatically takes the airline operations into the financial red region of unprofitability. Other factors that affect airlines’ sustainability include the taxes, levies and payments that airlines are expected to make that come from the government. They have their collateral effect on the operations of airlines. Other factors and charges that are not fixed take a huge toll on airline operations. The airport charges, taxes, navigation fees, and other levies introduced by government is affecting the business. Then, look at the role of financial institutions. They are also not assisting enough to get Nigerian airlines out of trouble. The high interest rates charged by Nigerian banks are too high. This alone has led to the collapse of many airlines.

    How does this affect the economics of airline business?

    High interest rates by Nigerian banks is not conducive for the domestic airline environment. When compared to the interest rate by banks and financial institutions from other parts of the world, the rates are relatively low enough to stimulate business and borrowing. In some parts of the world, banks loan money to airlines at between two and three per cent interest rate, but here in Nigeria, the banks charge as much as between 22 and 27 per cent. This is too high for any profitable business. But, we are happy that the government is doing something to bring about reduction in interest rates to enable domestic airlines access funds through some intervention. If this intervention fund is well implemented, it will assist airlines a great deal.

    The Federa Government packaged intervention fund for the industry a few years ago. What happened to it?

    Well, talking about intervention and funds from the banks that some airlines accessed in the past, it was not given as investment into domestic airlines. It was given to cushion the banks that borrowed money to some domestic airlines. It did not bring about any serious investment in the airline industry. The intervention funds were given to the banks as a way of reducing their exposure to the aviation sector bad debts. The intervention funds did not bring about any serious investment into any domestic airline or investment in their infrastructure. It was intervention funds for banks to cushion the effects of loans given to airlines, which had almost become bad debt. So, domestic airlines that did not have bad debts with the banks were not a beneficiary of the intervention funds that were given. The consequence of this is that, if as an airline operator, you were not indebted to the banks, the so-called intervention funds did not impact on your operations positively. If was just an avenue to cushion the effects of bad debts owed banks by done airlines. It did not bring about any positive investment in airline operations.

    For airlines that were indebted, instead of the banks charging high interest rate on the debt, government facilitated a reduction of interest rate the debtor should have paid to the bank for the loan. That was the whole essence of the intervention funds. For those of us, who did good business and did not fall into the hands of the banks by owing them money, the intervention funds were not for some of us. What government did was to negotiate the interest rate on behalf of the debtor airline from the supposed 28 per cent to about eight per cent. That was basically what happened. So, those of us that did good business without owing we’re not eligible to benefit from the intervention funds. That is the major reason some of us cried foul over the way the funds were disbursed, that it did not bring in any investment into the aviation sector for domestic airline operators, whether you are scheduled or charter. Our clamour is that government should put in place a more robust policy or scheme that will bring in investment into the industry. That is one of the ways that intervention should be robust.

    Are airlines’ business plans robust enough to ensure profitability and sustenability ?

    It will be wrong to say airline operators do not have a robust business plan. Everybody gets into business with the expectation to make profit having done their background checks. So, I am confident to admit that indeed many operators set out with a good business plan. The business plan may be robust at the point the airline was set up, but the effects of external factors and interference affect the business. That is how an unfriendly policy from government as an external factor or interference could affect the business which was not factored in in the business plan. No matter how robust the business plan, the effect of such policy could affect the profit margin. This explains why we are discussing with government on how to assist domestic airlines, which will be in the form of subsidy or one measure of assistance or the other.

    To what extent is the multiple charge regime by aviation agencies impacting negatively on airline operations?

    Multiple charges have direct impact on the operations and profitability of airlines. A collapse of the charges into a unified block will assist operators, whether they are involved in charter operations or scheduled. That is why the one-stop shop payment system introduced by government will be of immense benefit to domestic airlines. We think it is good, it is the way to go, and it will assist airlines to rework their cost of operations, which we continue to argue is on the high side. The single platform payment system just introduced is good for the system, it is good for all. If well implemented, it could ameliorate the problems of airlines. It is good for operators, because it will take the headache and stress off their shoulders and heads. It is good, but, we insist that the process should be transparent enough for both service users and providers. If the charges remain same and we are paying into one system, it is a good idea. But government just waking up with a sudden increase in charges will definitely affect our profit margins and business plan.

    How difficult is it to set up an airline in Nigeria? What is the level of returns on investment?

    The whole system about setting up and running an airline in Nigeria has changed dramatically. Many years ago, an operator could acquire an aircraft and in a matter of days, the airline hits the ground running. But, these days, the regulatory procedure and processing is becoming a lot more tighter and longer in terms of time. You need about 18 months before you can conceive an airline and start flying. There is a lot more involved in terms of certification processes and procedure to get the air operators’ certificate and start flying. You could even wait for more than 18 months no matter how push full the operator is. The stakes have been raised.

    There is this idea of floating a national carrier airline. What is your take on it?

    Well, this is an interesting subject that often would elicit varied reactions. But, let me address this from the point of view of being Chairman of the Airline Operators of Nigeria (AON). I have told my members that we need to look at the books and give serious consideration to this issue. Generally, we should be moving forward and not moving backward. There are different voices on this issue among operators. But, I think the concept of national carrier is archaic. What is being adopted globally is the flag carrier model. The airline industry has gone far ahead of archaic models. The era of national carrier is long over. Even, a country as vast as Brazil, now has many flag carriers. Even in the United Kingdom (UK), it is the concept of flag carriers that the country is pursuing. The concept many countries are pursuing now is flag carrier. This has happened in Brazil which now has seven flag carriers after the experience of Varig Air. In the UK, they have moved from national carrier to the concept of flag carrier with British Airways and Virgin Atlantic Airways. So, the concept of national carrier is outdated. I think Nigeria should look in the direction of what other nations have done to designate domestic airlines as flag carriers. Gone are the days of national carrier, it is out of vogue. Aviation business has gone digital, it is no more analogue, so, why do we need to go back to outdated models? But, airline operators under the umbrella body are consolidating and talking to the government on how to achieve what is the best for the aviation industry. We are convinced that government has good plans to set up a national carrier, I am sure the promoters of the carrier would have done their home work so that by the time the whole thing is worked out, the picture will become clear, and it is going to be a win win situation for everybody.

    But lack of capacity has been identified as the major reason for not designating international routes to domestice airlines. Is this correct?

    Well, this is a very interesting issue. But, let me give you a scenario of what happened in the telecommunications sector and power sector. Long time before privatisation or deregulation, government threw out bids and asked those who were interested to demonstrate their capacity. In the same vein, government should throw international routes open for bid for airlines that think they have the capacity to fly into them. The same thing should apply for all the bilateral air services agreement. That way, it becomes competitive for those who have capacity to deliver.That was what happened to the generating and distribution companies in the power sector. The same model should be applied in the aviation sector. That is what happens in other parts of the world. If it is done this way, it will be more robust and transparent for those who have capacity to deliver in flying into international routes. International routes should be put up for bids for those that have the financial capacity to go into its operation. What the airlines will then do is to get technical partners that will assist them to make it a reality. That is how global aviation works. It is driven by technical partnerships. You cannot do it all alone. Operators do not need to come alone but approach the business from a technical partnership point of view. That is the way to drive growth and development for air transport. Generally speaking airlines should bid for routes.

    What is the best form of intervention that government can package for airlines?

    There are many ways the government can intervene to assist domestic airlines. Government can create some soft landing measures to assist airlines to keep the business running. The minister of aviation is seriously looking into that through the partnership of the Central Bank of Nigeria (CBN), we are confident she is going to do something about it. The minister has been talking to the CBN on how to assist domestic airlines. We are confident that something good is going to come out of that. Assistance to domestic airlines by government is not necessarily the provision of funds for the business, it could be through the establishment of aircraft maintenance facility; the construction of a fuel facility to reduce operating costs for airlines; it could come through many other ways. It could be by making the flight time shorter, which will save time and reduce over 20 per cent cost of fuel. It could come from the provision of landing aids, fuel subsidy and put the money into refineries that will reduce the cost of aviation fuel.

    What about accessing funding from multilateral organisations?

    This will be achievable if we have a more conducive operating environment through favourable government’s policy. This is good, but Nigerian banks are afraid because of risk perception to loan to domestic airlines. Once government can give guarantee and create a development fund and give guarantee to access funds, then this will be easier for airlines. But, there are different ways of accessing the funds if you have a local bank guarantee. But, it is a bit difficult now, because the banks are afraid. But, government can give loans as it happened in the power sector.

    Do you think the airlines in Nigeria are too many?

    The airlines are not too many, if the government creates an enabling environment for them to thrive. It is a capitalist world. We can have as many airlines as possible. More airlines are welcome if there is stability. We can even go into other West African countries as it has happened in the banking sector because the position of Nigeria has already made it a regional hub.

  • ‘How govt, bad managers killed Nigeria Airways’

    ‘How govt, bad managers killed Nigeria Airways’

    Why do some airlines die young? Med-View Airlines Managing Director Muneer Bankole blames it all on lack of technical know-how by the owners. Even, the Nigeria Airways, he says, was killed by government interference and incompetent managers. In this interview with KELVIN OSA-OKUNBOR, he urges the government to assist operators develop routes that will boost the growth of states where there are airports.

     

    Over the years, many private airlines have come and gone. What are responsible for the high mortality rate of airlines in the country?

    The major factor is that many people come into the industry to invest without sufficient knowledge of the business. They come into the sector without understanding the business environment. Some operators came into aviation business from other sectors without sufficiently studying the airline environment before dabbling into it. The other factor is the aircraft type that most operators use for their operations. The owners of the business who are not managers need to understand that element or component of the business, which, in my opinion, is key. If you do not understand the components of an aircraft as an owner or manager, you could have serious issues when people are advising you on what to do. It is very important for people to get this mix right from the start. This is important because it is a key factor in the cost analysis of running an airline.

    Consider the cost of aviation fuel and the charges you have to pay to service providers. You must understand how these costs will impact on the running of the airline to ensure profitability. If you are not abreast of these developments, it may be difficult to successfully run an airline. You must be adept at handling engagement with industry stakeholders on issues that impact on the business. If you fail to get this business mix right, the airline may not run efficiently. It is not enough to have new aircraft in your fleet but you must ensure that your technical personnel are well-trained and carry all stakeholders along to run the business.

    At what point in the running of an airline business should the government come in?

    The government could be of assistance to domestic operators in many ways. One significant area is aircraft acquisition. Operators have had meetings several times with government officials on how to access the window of assistance in acquiring aircraft to boost operations. The intention of the government is very clear on how to assist domestic operators; but there are many factors standing on the way of achieving the objective. The government is creating a conducive environment for domestic operators to get aircraft directly from manufacturers, train personnel on such aircraft and encourage the manufacturers to establish aircraft and simulator maintenance facilities. We are looking forward to how this assistance will materialise, because it is a key area that will help our business.

    That is on one part. The other area is more waivers for aircraft spares importation. If this is achieved, it will reduce the cost of doing business. Government needs to come to our aid in reducing the costs of aircraft maintenance and spares. Another area government can assist domestic operators is on the high cost of aviation fuel. Aviation turbine kerosene is too expensive in Nigeria. The government could intervene to bring down the price of aviation fuel.

    The Nigeria Civil Aviation Authority (NCAA) is planning to carry out technical and economic audit of domestic airlines. Do you subscribe to this?

    This is one of the best things to happen to the industry. It is high time the regulator carried out serious audit on the airlines to ascertain their health, rate those that are fit to remain in business. It is a good initiative; it will promote air safety and put domestic airlines in good stead to carry out their business. For us at Medview Airlines, safety is the greatest asset in the balance sheet of any airline. As your operations are adjudged safe, you continue to grow the business. The NCAA has approached us; we have filled the forms, the audit is ongoing and we are confident that it will improve the industry in many respects. The economic audit of domestic airlines is appropriate, too. It will help to establish the status and technical standing of the airlines. We have filled the forms; we are cooperating with the authority to achieve this. It is a healthy development for the industry, it will help to measure the performance of the airlines. For us, it is a test for airlines to know its position. There are no more hiding place to hide. It is good to know what is happening to the airlines; it is a forensic test for domestic airlines. At a point, it is good for you to know the strength of your operations technically and financially. This is is very good, it falls within the ambit of the economic regulatory function of the NCAA. It is the best way to go. All airlines must know their rating. It is a good test.

    It is argued in some quarters that there is proliferation of airlines in the country. Do you agree with this?

    I disagree. Given that the population of Nigeria is estimated to be over 170 million. We are yet to have the number of airlines that befits our status as a regional power block. There are not enough airlines in Nigeria yet. There are just five domestic airlines doing fairly well in the industry. We need more airlines to stimulate competition. The airspace is wide enough for all operators who know what they are doing. You don’t rate the aviation industry by the number of domestic carriers. The important thing to note is how viable the existing operators are. The number of domestic airlines in Nigeria is too poor compared to other African countries.

    Mergers, acquisition and consolidation are options for airlines to address their liquidity problems. What is your take on this?

    For now, some operators are considering either merger or consolidation. The whole idea is to ensure stronger airlines or, at least, a platform where operators could come together to examine issues that are common to them, and seek solutions. In fact, the managing director of Dana Air has called for a meeting of domestic operators to explore areas of commonality. This is a good proposal for the industry and I think it is something we could work on to improve the system. The idea is for domestic operators to forge a common ground to resolve operational and related issues that will move the industry forward. We are optimistic that it would come out strongly. His proposal is not that airlines should come together to become one strong player. It is just a window to assess issues of commonality with the airlines. It is a good window for all operators to meet and discuss issues affecting the industry. This is expected to be a robust window for all of us to examine areas of common concern. I think it is good being the first time domestic operators will be coming together to forge a common front for sustainability of the business.

    The Federal Government is remodelling some airports. Do you think this is necessary?

    This is a good initiative. It is coming at the right time to bring back life to some of our old airports. But my belief is that the government needs to assist airlines to develop routes. Development in the aviation industry is beyond just building or renovating airports. We need to make the airports more viable by attracting domestic airlines to operate into them. Through this means, the economy of the states where such airports are will grow. Remember air transport serves as a catalyst for socio-economic development. That, for me, is the way to go. We are connecting major airports, including Lagos, Abuja, Port Harcourt, Yola, Maiduguri, Jalingo, Enugu and others. Our plan is to ensure that all airports in Nigeria are linked to national and international routes. From the point of view of Medview, we think if smaller airports are developed, government could earn additional revenue. We are testing the ground in new routes to know the challenges of passengers and design tailor-made strategies to meet their needs.

    How can the high cost of doing business in Nigeria be addressed?

    We are appealing to the government to come to the assistance of airlines in the area of high cost of aviation fuel. The way out is for government to have a meeting with airline operators and fuel marketers and the regulatory aviation agencies to resolve this challenge. It is having a huge impact on airline operations. With this kind of scenario, how will domestic airlines survive? If you compare the margin at which some airlines in other countries are buying aviation fuel with that of Nigeria, you will discover that it is extremely difficult for airlines in Nigeria to survive because of the crushing cost of aviation fuel. The margin is too wide. There is need for urgent stakeholders’ engagement to resolve this issue. It is a real threat to the survival of domestic airlines.

    What’s your take on the charges for aeronautical services rendered to domestic carriers?

    This is another serious element that affects the economics of airline business. It is one key area to consider. It may not amount to asking for too much if there is harmonisation of the charges because domestic operators almost pay five per cent of the ticket value to every aviation agency. With such multiple charges and low fares put in place by domestic airlines to encourage air travel, it is difficult to operate profitably. We have been talking to the government to harmonise the taxes we pay to either the NCAA or NAMA. The value added tax and other charges, including landing and parking to the FAAN is killing. My proposal is that the government should bring all aviation agencies together to consider how to possibly reduce the taxes or harmonise them. That way, domestic airlines will be encouraged to remain in business. The agencies collect five per cent of the value of passenger ticket as sales charge, in addition to landing and parking fees. This is too much for airlines. The agencies could try to limit the taxes while government subsidise the other taxes and charges. This would make domestic operators to have a conducive environment to operate profitably.

    Why was the collapse of airlines common in the past?

    Many airlines in Nigeria collapsed due to incompetent management put in place by the owners of the business. Consider the case of the former national carrier, Nigeria Airways Limited. It was the incompetent management put in place by government which owned the airline that contributed to its collapse through undue interference. The people put in place to run the airline did not have background knowledge of the industry. This inevitably led to the demise of the airline. Only a few government-owned airlines in Africa have survived. Take the case of Ethiopian Airlines. The airline is running with the right model by putting the right people in place to return the airline to profitability. It is important for owners of airlines to put the right management in place to ensure the profitability of the business. Undue interference by owners of the business has not helped airlines’ survival.

    Do you consider government’s policy in the industry appropriate and service delivery by domestic airlines adequate?

    We have the right policy in place, but it could get better if there is proper implementation. Not just what is on paper, but implementation.

    The service delivery level should be improved by meeting the needs of passengers. By doing that, airlines will attract enough patronage. The strategy is to give value back to the passenger.

    The belief is that an investor with technical knowledge is best suited for the business than investor-owner. Do you agree?

    First, we need to understand the full terminology as it relates to the business. For us at Medview Airlines, we see ourselves as a mix of the classifications. Whether you call us owner manager or owner investor. We understand the intricacies of airline business. That puts us in a vantage position, and we are operating in an environment we are familiar with. The fact that I have knowledge of the aviation sector as it relates to airline business gives me some level of confidence in handling technical issues that would arise. Following that, no pilot or engineer can pull the wool over my eyes on issues concerning aircraft or the business. We are on the same page as far as running the affairs of the business is concerned.

    Where do you fit in this classification?

    In this sense I now qualify as an owner investor, who is not just bringing in the funds to run the business, but also understands all that is required to keep the business running. I would concur that the best model for running an airline business is to have adequate knowledge of the industry because you are abreast of the intricacies of the business, which would help you in taking critical decisions. If you have adequate knowledge, your vision of how to take critical decisions in contributing to the growth of the industry will not take too much time to manifest. This is very important because airline business is very volatile and in such volatile environment, you need to be very insightful in taking critical decisions about when, why and how you invest your money in the business. You need serious background knowledge of the industry as an investor owner and airline manager. This airline business is highly capital intensive, so serious decisions making is key to remain in the sector to run profitable operations.

    What are the specific areas you want government’s intervention?

    As it is done in other parts of the world, including Saudi Arabia, the government facilitates how the national carrier gets aviation fuel at a relatively reduced rate. That then helps the airline to reduce operating costs. If the cost of aviation fuel is high, it will impact negatively on airline business as we are experiencing in Nigeria. The other factor is that most of the fuel marketers are investing huge money in the business of aviation fuel supply and they want to recoup their investment in a short term. The suppliers of aviation fuel will not give us any window to delay payment for the product because they too are getting loans from the banks to run the business. This puts domestic operators on the edge.

    Imagine getting a loan from the bank to do business to pay over 24 per cent interest rate, that is too high. Another way government can be of help to domestic airlines to see how it could influence reduction in interest rates from the banks to make loans repayment easier for us in running in the business. In some parts of the world, including Saudi Arabia, the interest rate facilitated by government for their airlines is about two per cent which is very friendly. It is just like service charge. That will help operators to run the business conveniently. So our challenge in running the business is high interest rate regime. If operating costs are lower, airlines will charge lower fares and more people will be able to fly.

    What are your niche areas?

    Medview Airlines has done well because as a technical person in the industry owning the airline, I am fully involved in its operations. I have been utilising the operational model of owner manager and at the same time investor owner. This mix of strategy has helped the airline to grow. Everyday I am the airport with the support of the personnel to see the operations through in every sphere. Whether in terms of aircraft acquisition, procuring aviation fuel, coordinating the crew, the marketing personnel, insurance, catering and ensure that the right maintenance fir the aircraft is in place. I am able to achieve this because I know what is required technically. Not just providing the money as the owner manager, but looking at all possibilities to see the business grow as an investor. I try to give managerial direction on how the airline can be sustained profitably. This is only achieve able if you know the technicalities involved in running the business. Another strategy is to ensure the personnel show total commitment to allow the business grow. This is a good strategy when you get fully involved. As an investor manager or owner, the welfare of the personnel is key.

    What is required to run a successful airline?

    To do well in this airline business, as a serious operator, you have to have a good grasp of the technical knowledge of the industry, not just being a graduate of any discipline. You need to be fully equipped about the dynamics and intricacies of airline business. That is one key requirement to run this business profitably. You must have knowledge on the rudiments of the business. If some of your personnel want to play you out, you call them to order because you have knowledge of the industry. But, if you do not have the knowledge done personnel could propose wrong ideas to you that could ruin the business.

    What is your strategy of keeping the business going?

    As an airline we have been reaching out to passengers in far flung places. We bring the airline closer to the people in places like Jalingo, Yobe, Maiduguri, Enugu, and other places. We are reaching out by opening offices in six geo- political zones in the country as a truly Nigerian carrier. We have signed agreements with some state governments in done of these areas to help develop the routes. By this strategy, the airline is getting closer to people. Our strategy is that all routes in Nigeria must be developed. One of the ways of achieving this is to partner with the relevant authorities to make air travel convenient and affordable. In some of the states in the northern part of the country, the governors are even asking how they could be of help to open up the airports. Our belief in Medview Airlines is that there is no airport or route that is not viable, but you need to do a detailed business plan to develop the route to make it attractive.

    What motivated you to go into airline business?

    To invest in any business, be it air transportation or any other business, the potential investor needs to understand the dynamics of such an industry. When I say dynamics of such an industry, I mean full understanding of how such business operates. If you as an investor has such understanding, of the policies, the issues that shape development in such an industry, you have conquered the first major challenge of avoiding the collapse of the business. Many people, call them investors, come into the aviation sector without a full understanding of all that is required to run the business. This is in terms of getting the right personnel, acquiring the right aircraft to keep the business running, securing the right partnership with other stakeholders, including banks or other financial institutions and support services providers to get the business running.

    Though a lot of people think airline business is very profitable, they invest a lot if money initially and are not patient to watch the business grow before they start expecting huge returns on such investments. Adequate technical knowledge of aviation business and the operating environment would guide you to run a profitable airline. A lot of people moved into the airline industry from other sectors of the economy without adequate preparation and not very detailed business plan, thinking they could do magic, and you could see that the result as such ill-preparation has led to the collapse of many airlines.

     

     

     

     

     

     

     

     

     

     

     

     

     

  • N52b pay-off: Ex-Airways workers seek Jonathan’s intervention

    Former Nigeria Airways workers owed about N52.8 billion severance pay-off have appealed to President Goodluck Jonathan to come to their aid.

    They urged Jonathan, through one of their unions-Air Transport Services Senior Staff Association of Nigeria(ATSSSAN)-to ensure the payment of the money to the ex-staff of the airline before another national carrier being planned by the Minister of Aviation is floated.

    This was contained in a memo/appeal sent to the President and endorsed on behalf of the aggrieved ex-staff by the acting General Secretary of ATSSSAN, Comrade Olayinka Abioye.

    He said: “It is only proper and expedient that all matters associated with the outstanding pay- off of the Nigeria Airways Limited former employees are finally settled, before the establishment of a National Carrier to avoid complications.”

    In order to expedite the ex-workers demand, Abioye urged the President to mandate the Bureau of Public Enterprise (BPE) and the Nigeria Airways liquidator -Babington Ashaye & Co., to submit to Mr. President, a comprehensive report of its activities and proceed therefrom, so as to assist the government in meeting its obligation as being demanded by the former staff.

    He said it was baffling that the former Nigeria Airways’ employees in New York, Paris and London were paid 25 years pay-off in accordance with industry best practice and extant law, while those based in Nigeria were left unpaid. He said many staff of the Nigeria Airways have died while waiting to be paid.

    Meanwhile, Workers of defunct Nigeria Airways in other African countries, have made an appeal to the Minister of Aviation, Princess Stella Oduah to intervene in the matter.

    In a petition to the Minister dated April 15, 2013, entitled: ‘The cry of a suffering and helpless orphan. What is our fate, 10 years after the liquidation of Nigeria Airways,’ the retirees catalogued the pains they have gone through in their attempts to secure their benefits.

    The airline was liquidated in 2003, and in March, 2008, the Nigerian-based workers were paid part of their benefits, while all the West Coast staff who were all present in Lagos in 2008, during this payments were left out.

    The workers based in Lome, Togo, Cotonou, Douala, Cameroon and Libreville disclosed that they had considered following up the approval of the supplementary list by the National Assembly and the Presidency.

    They said: “Unfortunately, we were completely neglected as we were told that the payment was only for the Nigerian workers. The excuse we were given by the paying staff from Abuja, was that the West Coast staff were erroneously not captured in the system.

    “They told us that we would be paid with the supplementary list coming up before the end of 2008. No one could imagine this could take another five to six years.” another aggrieved retiree said.