Aviation: How Ghana, Togo and Benin are building hubs in West Africa
Travel expert and organiser of Akwaaba African Travel Market, Ikechi Uko says that by putting the right infrastructure and policies in place, Ghana has become the attraction for international and regional airlines in West Africa. He spoke to Chinedu Eze. Excerpts:
It is surprising that more foreign airlines land in Ghana than Nigeria, while it is said that Nigeria has at least 60 percent of the passengers in West Africa. Why is it so?
I think that Ghana doesn’t have many airlines of its own while Nigeria can be said to have like five or six. Ghana has only two now-Starbow and AWA. And these ones don’t really carry a lot of passengers, so they chose an easier route to making a hub which is giving out fifth freedom right to many airlines; even non African airlines. So this increased the viability of the Katoka International Airport, Accra, as a hub for other airlines. So in Nigeria you have Arik and Medview, to some extent Air Peace trying to create something like a hub but as at now I think only Medview is really doing international, Arik scaled down its operations.
But in Ghana, Ghana serves as West African hub for South African Airways. Kenya Airways has fifth freedom rights out of Ghana, Tap Portugal, Royal Air Maroc, Emirates and the country is offering a lot more to anybody who wants to use Accra. This opened up opportunities for smaller airlines in West Africa which cannot create their own hub in their place to hook into Ghana. So you have Air Burkinabe, Mali, Air Cote D’Ivorie, all of them now trying to fit into the market as spokes to the hub, not created by Ghanaian airlines but created by these other airlines which take people out of Ghana. And I am sure you know that South Africa Airways flight to Ghana and out of Ghana is now the premium route in Africa for them. So Ghana on its own is not becoming a hub because it is running an airline; it is just that it has created the space and opportunity for others to utilise its airport.
Knowing that relatively the passengers are not there, why is it that those airlines are attracted, what are the incentives that make them to go to Accra?
It is so because there is no dominant player in the West Coast, the nearest places to America and South America is the West Coast of Africa. So you can connect China from East Africa, so Ethiopian Airlines and Kenya Airways have an advantage there. But in West Africa, Nigeria and Senegal, and to some extent, Abidjan ought to be the hubs to connect the Western part of the world and that is not happening. So Lome becomes a hub for Ethiopian Airlines (ET), ET is connecting South Africa via Asky, Brazil, New York and very soon London and Paris. So South Africa is connecting Washington and very soon London from Accra. Now, you can say that the passengers are not in Accra, but there is a vacuum in West Africa. How many aircraft seats are there between West Africa and America? There are less than 3,000 seats and there are more than 3,000 passengers. This is the reason why a lot of people fly through Europe because there are no enough aircraft seats in the West Coast.
So somebody needs to fill in those gaps. And in the absence of Nigeria’s own airlines to fill in that gap, and you have a lot of Nigerians who have the need for that service, so Ghana decided to provide those rights to these foreign carriers. Ghana is not growing because of its own strength; it is growing because there is a vacuum.
Would you say then that Nigeria is hostile to foreign airlines?
Nigeria is not hostile to foreign airlines; Nigeria is hostile to its own airlines-the Nigerian airlines. The airlines are not getting the kind of support they need to be able to compete, but everybody sees them as private businesses. Yes they are private businesses but they carry our flag, they represent us. All the Chinese companies represent China and they are supported by the Chinese government and that is how it should be. The airline is an extension of your foreign affairs, it is an extension of your own power, and it is an extension of your whole national brand. It is the first encounter people have with you. If something happens aboard a Nigerian airline it is assumed that it happened in Nigeria, so until that airline lands somewhere and passes you, you are under that flag.
So Nigeria is not hostile to foreign airlines per say, but there is this believe in Nigeria that you shouldn’t let other airlines grow until we are able to grow. It has taken us 18 years of democracy and we still haven’t grown a strong airline. Are we going to tell Nigerians who want to go to America and other places, don’t go until we are able to grow these airlines? That is the argument people bring out in public space, oh we shouldn’t open up our airspace. But there is a need by the passenger to go to these places. As at now it benefits only European carriers, so anybody who says we shouldn’t have our own airlines I see him as agent of these European carriers because such argument is benefiting those people. It is not benefiting anybody except the European carriers who already control the market.
What do you think Ghana did to achieve this, because it is not only airlines that are going to Ghana, even international agencies from West Africa are relocating to Ghana, the few in Nigeria are also going to Ghana, including companies that have major market in Nigeria are locating their headquarters in Ghana. What do you think is the problem?
There is a reason why Nigerians are asking for restructuring; every Nigerian has come to understand that things are not working well in Nigeria. We might be pretending to ourselves because we are Nigerians but these foreigners owe us nothing. And they have made economic decisions to keep their businesses going. Some of these companies are 120 years old, 50 years old or 70 years old and they have learnt how to survive and they know the environment in Nigeria now is not conducive for them to grow. So the NGOs which operate in Nigeria are headquartered in Ghana because Ghana is the nearest English speaking country. They have similar culture, similar laws, and a former British colony so it favours them. Because they could have been in Benin or Togo but they have chosen Ghana. Ghana has realised that it is creating that environment that makes it easy for these companies to operate. For the fact that Nigerians are asking for restructuring, is the final admission by Nigerians that something is wrong with the system we run. And if Nigerians have come to that understanding and agreement, the foreigners have also seen that, so the decision of them moving out of Nigeria and operating into Nigeria from outside is their own way of telling you, we know things are not right. But the good thing about it is that almost every Nigerian has come to the understanding that something is wrong with our system. So we have the chance to correct that system.
Why is it that airfare charges by foreign airlines in Nigeria is relatively costly?
One is the exchange rate, two, demand, three, recovering their cost.
But do you think foreign airlines spend more money operating in Nigeria?
There are challenges that they have in Nigeria which they try to cover with money. For example, what is hardship allowance, which is only paid to these airline officials that work in Nigeria and other areas that are seen as harsh environment? You offer people money as a way of overcoming those perceived challenges. By the time things start working seamlessly in Nigeria cost will normally come down. You could see how the simplifying of passenger processes at the international terminal of Lagos airport has reduced even how people behave. You are having less fight, the only fight you now have is when Nigerian airlines don’t bring baggage of Nigerians abroad. But you could see those encounter of quarantine trying to seize bread, gala, egusi and the rest, it is all eliminated because you don’t get to meet them. In the past there were a lot of things that raised the temperature and the cost of everything at the airport. So the airport slowly, slowly is becoming softer and easier for passengers.
Would you say Ghana has better airport infrastructure?
Their airport is friendlier, it is a small airport but it is friendlier. And I once read Dele Momodu comparism of the two airports; they have borrowed money and are building a new extension which will be ready by April next year, so it is a smarter airport, a friendlier airport. On Wednesdays there is a keyboardist there in the evening serenading people as you are walking in out of your aircraft. Playing old highlife tunes and welcoming you to the country, so it is friendlier. But in Nigeria, MMA2 is a smart airport terminal and if our international airport evolves as the new terminal is coming on stream, let’s expect that it will also be the same. People like me who pass through airports all over the world every week, airport is part of your home, so the friendlier, the easier it is the better your life is. It shouldn’t always be a war zone. Imagine if you have to pass through that every other day, how challenging it is for you. So for international airlines which fly to 120 airports, the Lagos airport would be a challenge to them.
This Ghana airport is being managed by government agency, Ghana Airport Company Limited (GACL), now we have Federal Airports Authority of Nigeria (FAAN), but when you look at it people tend to think that there is lack of efficiency with the running of airports in Nigeria?
I wouldn’t know what happens behind but for me as a Nigerian, I know the challenges, I know that things are old and I know the efforts being put in some of the airports so I can appreciate that. But I listened to other passengers who are not Nigerians, you sit down with them and they talk and they say that the airports of the country with the biggest economy in Africa are not of standard. They are being polite, because you have seen smaller airports. We went through a small airport. I was telling somebody that Kaduna airport is the neatest airport I have seen in Nigeria. Maybe because it is new or refurbished, the toilets are neat and for me toilet is key. That is the only airport I have seen that has neat toilet, besides MMA2. So the things we need to do to improve our environment, to improve our airports are within our power, they are within our capacity to do.
Would you say there is lack of commitment to do things better in Nigeria?
The whole system in Nigeria has challenges. If someone has fever and you don’t even know what the fever is and you keep giving him Panadol, you are not containing the fever. So the problem of Nigeria is not the problem of FAAN. It is not the problem of NCAA, it is a problem of the system, it is a foundation on which we have built everything. If we can rework the system to make it a lot more efficient, it is the system that is important. Some of us are shouting we want national carrier, we want national carrier, the national carrier will still have to be built on this system that is faulty. So, when you have a system where there is no trust, anything being done by the minister is not seen by the union as a good thing. Mr. Chris Aligbe once wrote an article on how the labour union of Nigeria Airways stopped Nigerian Airways from installing the airport computer infrastructure.
If that was done then we would have been the first people to automate check-in, but the union came and destroyed it. So when there is no national consensus, when there is no trust, people in Nigeria don’t believe in the government agents. The Minster might say FAAN should give Accident Investigation Bureau (AIB) five percent of their revenue, and you say why? So people question anything. So you find out that in this mutual suspicion everybody forgets the goal, which is creating a better airport for travellers. But currently people who work in aviation environment believe that the system is supposed to serve them, so they become the principal for aviation in Nigeria. So, the focus is no more on providing good service to people, running an efficient airport, giving passenger satisfaction and growing a national economy, the focus is now on the workers. So it becomes the welfare of the workers that becomes paramount. And that is where our problem is.
Industry observers say that over the years decisions and policies done in the industry are usually self serving.
Don’t you think that this is the reason why the policies don’t seem to promote the industries?
The thing is that there is mutual suspicion; nobody believes that the government is capable of doing the things they said they would do. So this mutual suspicion is what creates the problem. Now, I also can’t say the ministry or the government have ulterior motives but based on the history of what we have seen in Nigeria, that is why Nigerians don’t seems to trust government officials. Because based on their own experience, the government officials have not always done what they said they are supposed to do. If you check back to some of the positions taken by government officials in the past you can now conclude that those positions are done for selfish reasons.
There were indications that in the aviation community the forceful takeover of Arik Air by the federal government was seen as autocratic. What is your view about that?
I would look at it from two ways: Arik is a Nigeria company; it is not an international company, so we cannot say that what a Nigerian government did for a Nigerian company to protect its own environment should be interpreted in any way by foreign organisations. Nigerians probably know what is best for them than foreigners would know. For the case of Arik, it is normal because that is not the way America would take over its own airline. Probably not how a British organisation would be handled by its own government, but that is how Nigeria handled its own.
Don’t you think that such actions affect our image?
That is probably why it is said that Nigerian airlines pay very high insurance premium because of some of the things that we have done wrong in the past. That is why I am telling you that until we work on the system under which Nigeria operates, we are going to have this flip flop. My prayer is that we do it sooner because once those places (operational hub) are established it is difficult for you to change what is established.
What do you recommend as solution to the problems of airlines and airport infrastructure in Nigeria?
I don’t think there is any magic wand that Nigeria can apply. Nigerians as a whole do not accept aviation as strategic part of the government of Nigeria. So if today we say let’s devout a billion dollars to revamping aviation in Nigeria, Nigerians are going to fight that. They will say that people want to allocate a billion dollars to themselves. So because there will be difficult buy-in by the Nigerian public, any major effort to revamp aviation in Nigeria will be met with a lot of scepticism. So the first way is to win back the confidence of Nigerians by putting people who Nigerians believe can deliver in positions where they can make positive change. And that is why you look for people with brand power, who have proved their own competence, and if you put those people in those places they might win over the confidence of Nigerians.
When you win over the confidence of the Nigerian through small wins, you can now go for the big stuff. This is because you need to invest a huge amount of money in infrastructure. Rwanda is not one tenth of Lagos economy, they have started a second international airport at Bugesera and it will be ready in 13 months. That is a country whose economy is not up to one tenth of Lagos. That is vision. Zimbabwe has had a struggling economy for years, but they have invested in a new airport in Victoria Falls which opened under 20 months and already it is having flight, over supply of seats from all the African carriers and that will drive tourism. Zambia is making investment; almost every other person is making investment in aviation. I don’t really want to bring up Ethiopia, so we need to make that investment now. But I can’t see that kind of money now being approved and supported by Nigerians. So that is a major problem.
Why it is that trade in West Africa is hampered by high fares by even Africa airlines? The fares from Nigeria to Dakar could even be compared to something near Nigeria to Dubai, why is it so?
It is due to market forces. When there is a monopoly and there are only 300 0r 400 seats available on a route that has 1,500 passengers, what do you do? You will begin to hike the price, $300 they will pay, $500 they will pay, $600 they will pay because the option is flying through Europe, so it is just monopoly and which will be solved by Opens Skies. Because the argument has been Lagos-Accra, Entebbe-Nairobi, these are monopoly routes and you could see how high the fares are. The opening up of Lagos-Accra in the last six months prompted the fares to come down. So what is killing Africa now is protectionist policies, not of government but by African airlines.
The governments are willing to pursue open skies but each airline in each country is making sure their routes are protected. So the entrance of competition on any route in Africa has dropped the price. If you check anywhere the big players in Africa play, the prices have dropped. So where they don’t play, the prices are high and Entebbe-Nairobi is because Uganda does not have a national airline and Kenya Airways has captured that route and can afford to charge any amount.
So every airline takes advantage of such monopoly. But it is adversely affecting trade in Africa because aviation opens up trade then drives tourism, so when there is no route or the route is very expensive, it is a disincentive. So if you open up the skies of Africa, but what has now happened is that there is this fear by most people, that Kenya Airways, Ethiopian Airlines are going to come and takeover. They are the most adventurous carriers now. But RwandAir has joined them, RwandAir has opened up a hub in Benin, they actually got a seventh freedom right out of Benin. So they are forming the national carrier of Benin to fly all over. So that is the second Asky we are going to have in Benin Republic.
Air Cote d’Ivoire has been trying to create a hub in Cotonou, RwandAir has it. Open skies would have prevented this hub building around everybody because they are building extra hub as a way of circumventing the open skies. So the new RwandAir airline in Benin is not going to be RwandAir it is going to fly as a West African airline and the population is here, 350 million people, forty airports. So we are deceiving ourselves by not doing open skies because these other airlines have found a way around it. Ethiopian Airlines definitely has found a way round open skies, it is still at a cost but they can do better. So I think the best thing is probably what Ghana is doing, open up your sky and collect the money, increase your tax, which they have done. So with the taxes out of Ghana are higher than any other place around here. But they have opened up, so the government makes money from the taxes.