Africa: Modern Airports, Maintenance Facility More Important than National Carrier- Ikechi
Travel expert and organiser of Akwaaba African Travel Market, Ikechi Uko, in this interview emphasises that modern airports with navigational aids will drive more economic activities make airlines more profitable. This to him should be of greater priority than establishing a nation carrier. Chinedu Eze brings the excerpts:
At the 5th Aviation Stakeholders Forum held recently in Abuja the Minister of State, Aviation, Hadi Sirika talked about bringing back the national carrier, saying it was temporarily suspended, what is your take on it?
From the beginning when they announced it in the middle of the year, I said it was not feasible during election time knowing how vicious Nigerian election environment is. It will be difficult for the government of Nigeria to give birth to that desired airline of ours without consequences. And I will not say I was surprised when it had such a stillbirth. For me it should not be a rushed project, we have already made ourselves not look nice in the eyes of the public. So I think it is something that we should take our time, after the election, and involve all the stakeholders not calling stakeholders after the project has failed.
We should be able to involve everybody all through. It is now after the project failed that we are hearing that some stakeholders were involved, and were consulted. If everybody was consulted who were protesting when the logo was launched? It was like the whole industry was up in arms, so I would prefer that this discussion can be re-established after the elections.
The minister said some investors were willing to offer Nigeria about 30 aircraft at $300 million, but they demanded for sovereign fund to guarantee it. Even if we are going to continue with the project, do you think Nigeria can provide such sovereign fund guarantee in such short time?
I know those sovereign things are wealth owned by the whole country not just the federal government. So there has to be an involvement of the states. I think we paid for petroleum subsidy and other things from such fund. I think we shouldn’t be having these discussions now, these discussions can be held in a better atmosphere and where it is an all-inclusive situation that involves every stakeholder, the National Assembly, state governments, federal government, the labour unions, and the airline operators.
The national carrier is something that is owned by everybody and meant to represent everybody, so we shouldn’t be having such a discussion in a small group. So I don’t know how it is going to work or how they are planning to pull off but I would suggest that these discussions be held after the elections, in a much more calmer and peaceful environment.
The minister also spoke about bringing everybody in and also the existing airlines to buy into the planned national carrier, but how do you see the idea of getting everybody involved?
I recently read an argument by Captain Isaac Balami, who said domestic airlines fail for two reasons, cost of aviation fuel and maintenance cost, the absence of maintenance, repair and overhaul (MRO), and that a national carrier can fund an MRO and will also get involved in the fuel argument to help reduce the cost. That when he was in Aero, Aero spent N800 million a year for fuel, meanwhile, the fuel cost was supposed to be N300 million; so N500 million would have been saved.
So for the domestic airlines, if the national carrier is the vehicle that will deliver profit if they are part of it, I think they are business people, they will want to be part of something that works. But they already have challenges and the national carrier was viewed by both outside investors and investor within the domestic airline environment as something that will be a problem or eliminate the domestic carriers. This is because it is going to have rights that will not be extended to private carriers.
So if the government decides to change the game now and ask them to be part of it, these are very astute businessmen, I don’t see anybody who has survived in the airline operation in Nigeria who has not learnt business in a difficult environment, so they will know how to adapt to it. But they will need sincerity on the part of the promoters of the national carrier. Did they mean what they say? Would their fears and challenges be accommodated? Will they be given opportunities to play as major investors? Will they be given a Hobson’s choice; that it is either you accept it my way or the high way. So I think they will be open to that kind of argument. But as at now the domestic airlines are not getting good cover from the government of Nigeria. And the national airline has the chances of getting the sympathy and the attention of the federal government. So it will be in the interest of the domestic airlines to have a stake in any airline that will represent Nigeria.
The minister also said he has given designation to domestic carriers to operate international destinations and then he criticised them over their low capacity and inability to take advantage of those designations. But the domestic airlines disagreed, saying they met a lot of obstacles on the way which they urged the Nigerian government to do address. What is your take on this?
I have already indicated the fact that yes the federal government of Nigeria has done well in granting them these rights, but it shouldn’t end at the point of granting them those rights. We all remember what happened to Medview in their London flight, if it was a national carrier that had such an experience the reaction of the federal government would have been different. We have heard about the complaints of Air Peace on Cote d’lvoire, if it was a national carrier the reaction of the federal government of Nigeria would have been different.
And we have also heard Air Peace threatening to go to court over Togo, if it was a national carrier, the reaction of the federal government would have been different. So I think the expectations of the domestic carriers is that the government should go further after giving us the rights, help us go further all the way down so that we are able to operate. Not just operate, but operate in a profitable manner for Nigeria because we are flying on behalf of Nigeria. So they are right in expecting more from the government. The government is also right saying we have given you this what else are you waiting for? So there needs to be a closer collaboration between these airlines and the government of Nigeria.
Why so much capital flights from Nigeria by international airlines and why is it that our fares are very high?
First of all, the supply is limited and pure economic sense means that if the supply is limited, you either increase supply or you increase prices. So you cannot ask private businessmen or private organisations to begin to depress prices when they can earn more. Once they charge within acceptable boundaries on fares you can’t accuse them of any crime. They are not over charging, they are just taking advantage of the fact that there is scarcity of these business class and first class seats. When you don’t have options, if you don’t fly these foreign airlines to those destinations who would you fly? We talk about capacity but you also need to look at the fact that most of our passengers are not well served.
There are some many connections that people cannot make. A lot of people you see flying to France or to London are connecting to places that are maybe two hours away from Lagos. But there is no local carrier that flies to those destinations. So if you are going to Libreville, or Kinshasa, Burkina Faso, Mali or Niamey that you can walk across from Sokoto or Kano, you will have to use a foreign carrier, fly to another destination before connecting these places. So our market is not well served, we cannot now deny the foreign carriers the service they provide for Nigerian travellers.
We are a 180 million people, there are less than 40 aircraft owned and flown by Nigerians. So these 40 aircraft cannot serve the needs of the Nigerian travellers. And we cannot impose this burden all on domestic carriers, I don’t know any country where domestic carriers fly all their passengers, there is none. So when people say we are giving foreign airlines right to fly, can you tell me one country that foreign airlines don’t carry passengers? All the Africans who go to China don’t fly Chinese airlines. China can start complaining tomorrow; that only non-Chinese carriers are flying but China is not complaining.
They run some of the biggest airlines in the world. And those airlines carry Chinese and carry other people. I think every African that goes to China don’t fly Chinese airline, so when some people start complaining that foreign airlines come here, I think that is the problem of every country. South Africa has higher volume passengers than Nigeria, but South African Airways doesn’t have up to 70 aircraft. So South African Airways doesn’t have up to a 100 aircraft like Ethiopian airlines and they cannot carry all their passengers, they fly less than 50 destinations in Africa, they are even shrinking their operations. So there are more flights by none South African airlines to South Africa than by South African airlines. And that is the most industrialised country in Africa. So some of the things we complain about are not correct, they are emotional, understandably.
But at the same time, you cannot stop people who are providing these services. But if we start the Fly Nigerian Act which involves code share with Nigerian carriers then Nigerian airlines can start making benefits from those volumes. This is because most of those carriers will now need a partnership with a Nigeria carrier to carry Nigerian government officials.
How can Nigerian airlines maximise some of these un-served routes?
We have only one airline with real capacity now and that is Air Peace and Air peace is less than five years old. There is no airline that flies to the number of route Air Peace flies to in three years. So Air Peace is doing very well. Asky is like six or seven years old and they fly to like 20 destinations. Rwand Air is also very young, it has less number of aircraft then Air Peace and they fly to fewer destinations. Ethiopian Airlines is 70 plus years old and flies to a 100 plus and Kenya Airways doesn’t fly to as many destinations.
So we don’t have the capacity within Nigeria to serve these routes because there is no airline outside Air Peace that has up to 10 aircraft and where will they fly to? So you don’t develop routes in one year, it takes you a long time, develop a route, get the benefit from that route then invest in another one. So, as at now Nigerian carriers are not even able to serve the domestic market well. Going around Nigeria is very difficult already not to talk of international routes. There is only one flight into Calabar and that is Air Peace. And so Calabar, Enugu, Uyo, Kano, Kaduna outside Abuja and Port Harcourt there is no other airport that is well served from Lagos. So we are not even serving our local market well.
The federal government said they will concession the major airports, build a national carrier, set up MRO and that there would be a leasing company. But as at today, none of those things have been actualised, although some of them are in the process. What is your review?
If I am government but I am not; you will ask yourself in the value chain of aviation which ones are most important. Airports deliver a lot more return on investment than airline. MRO has greater value, and it is one of those products that you could sell to everybody in your neighbourhood. If there are a 100 planes flying in West Africa and the only MRO is in Nigeria, everybody is going to patronise you and your airlines becomes profitable by default. So if I am to advise, I will advise the government to invest in modern airport infrastructure and MRO. A national carrier is desirable but we can empower our airlines to play at the best level by government taking the stake in them.
How can Nigeria get involved in aero politics?
Nigeria has not trained people who know enough of aero politics or how to play it. The best hands in airlines business in Nigeria work for foreign airlines. The most skilled people in aviation politics work for international organisations, the International Air Transport Association (IATA), Africa Civil Aviation Commission (AFCAC), Africa Airlines Association (AFRAA), the International Civil Aviation Organisation (ICAO), so the Nigerians who know how the game is played are not available on the local market. And even if they are, they are not in a position to play the game.
So because there is no national carrier, only the Nigerian Civil Aviation Authority (NCAA) and a department in the Ministry of Transportation get involved and most of them don’t have that exposure at the highest level or even understand the game in the first place. So it is unfortunate that there is also no think-tank that integrates the private sector and the government. If you get all the past airlines’ managing directors and you get all the people who had served in different international platforms and you have a think-tank that goes through one position after another, we can learn from their experiences. Outside the workshops, the conferences and events organised by Akwaaba, Aviation Round Table (ART), TravelMart and some others, you don’t get to see these experienced guys talk.
We get to see them maybe three to four times in a year at these conferences. But these are people that we should harness and use their skills. So there is no mechanism, no infrastructure and there is no structure for experienced politicians to come together and advise Nigeria. In real politics we have political parties; those political parties bring in all the politicians together. So what do we have in Nigeria that brings in all these people that have played in airline business together? Because our problem now is actually aero politics which is beyond aviation, it is just about the airline environment. So you need people who had played in that environment, who will understand what the score is. And fortunately for us we have Nigerians who had played at the highest level of global airline business.
Every year you help organise the Calabar carnival and we always have this issue of weather frustration, cancelled flights, delayed flights because of the weather. How has this been affecting the event and what has been your expectation since this has been happening over the years?
Unfortunately, I do not have the power to install instrument landing facilities at these airports. I do not have the power to control how the flights are run. So every year since I got involved in bringing in people for Calabar carnival we have been limited by weather. We have close to a 1000 tourists who will want to come from different parts of the world at the end of the day we do the bookings and cancel because we cannot control the dates of arrival and the dates of departure. And there is nothing as frustrating at the fact that somebody pays you, you cannot deliver the service. I have had people who have written against me about the Calabar carnival that I am so incompetent that I didn’t know that the planes will not fly. How would I know the planes will not fly? Each year we have this problem, what have we decided to do?
There is only one airport in the South East and South-South that can take flight during that time and that is Port Harcourt airport.
So we have to work with what is available, I have a plan A which is Port Harcourt airport and if Calabar airport or Uyo airport is open it becomes a plan B. But it is supposed to be the other way round because Calabar is the event centre. But every year we have had this experience and people ask you why do you complain every year but we get promised by the government that this is the last time it will happen. So this year I have not heard that any instrument landing system has been installed, so my plan A is Port Harcourt airport. My plan B and C will be Uyo and Calabar.
And even at that Port Harcourt airport might be closed all day and opened only at night, it has happened twice now. We used Port Harcourt and we had to land there at night. So because of the weather the airports are closed and you ask yourself, we know this is going to happen, it didn’t start today. So what are we doing to prevent it? And as I am talking to you now, I don’t know if any other thing has been done. So I anticipate that the airports will be closed from December 17th, 19th and 20th sometimes till 30th.
So we have to plane on moving people by bus from Uyo or from Port Harcourt. So the people we concentrate on bringing in now are the dancers, because they are obligated to perform, but the tourists who have paid you to come, he pays for a five-day trip, you cannot extend it to seven days. And if he had paid to be in Calabar on the 26th and 27th you can’t keep him Lagos or Abuja because you will be defaulting. And if it is somewhere that he has taken insurance, you have to pay.
So it is frustrating. It is one of the biggest problems of tourism, and it is one of the biggest encumbrances to the growth of Calabar carnival. It has the capacity to bring in so many tourists, even the expatriates in Nigeria. I know ambassadors who arrive Lagos and they can’t fly to Calabar. We have had a minister who flew in from her country for Calabar carnival and was stranded in Lagos until the carnival ended. So these are things I expect to get sorted out but my job is to organise the carnival and as at now I have no capacity to change anything. All I need to do is to adapt to it. You recall what happened to the Africa athletic event in Asaba, and how the connections from Lagos to Asaba were handled, so there are little demons that we need to master.
What is your view about the Akanu Ibiam International Airport, Enugu where the federal government and the Federal Airports Authority of Nigeria (FAAN) are begging the state government to create enabling environment for them to install critical facilities so that flights can land there in the night and more international flights can be designated there?
I am surprised to hear that the Enugu state government hasn’t treated this as an emergency. I had been in a meeting with a foreign airline and all the governors in the South east. They were of the opinion that whatever it takes to make that airport viable they will do it. This is because they have the largest number of frequent travellers in Nigeria. So they had to make sure their own airport is viable.
Edo state that has many airports around like Osubi airport, Asaba airport, is going out of its way to make sure that the airport which is like 30 minutes flight from Lagos is brought up to speed. I am surprised to hear such news from Enugu state because the enthusiasm I saw in the governor is that whatever it takes to get this airport to play at the highest level possible he will do it. So it is surprising to see that the things that were said, maybe I read his body language wrongly. Because that airport means a lot, some of us got involved in making sure that airport got designated. So it will be sad not to have it running at peak level.
What is the potential growth of that airport in terms of passenger movement if well designated to airlines?
Two of the biggest markets is in West Africa even in Africa are within two hours of that airport. Though part of the road is bad but the government of Nigeria has taken those two roads, Enugu, Port Harcourt and Enugu, Onitsha are very prime projects to be completed before next year. So those roads create the connection that you need for that airport to be viable. The markets of Aba and Onitsha are the biggest markets with the biggest importers, with the biggest suppliers and traders in Nigeria. So if those two roads are done, the capacity of that airport to serve the market has not been touched. And you also have Port Harcourt though an international airport also depend on the catchment area of those markets. Now Port Harcourt serves Aba, but you also have big cities around it, Markurdi, Cross River, Uyo, and Asaba. That is the nearest international airport to those places.
What advice do you have for the south east governors in harnessing travel and tourism and also boosting their economy of that zone?
The south east zone today is landlocked and if you look at examples of landlocked countries in east Africa, Rwanda and Ethiopia, they have two of the best airlines in Africa. Because they found out that it will be difficult for their people to move around to do anything without aviation. So if the south east wants to position itself as the biggest economic hub in Africa, it has to take a bigger interest in aviation and airline business than it is current doing. The Enugu airport should have 3.5 kilometer runway, the best facilities, the best access roads, and the best interconnection than any other airport in Africa. This is because these are the biggest traders out of Africa, they are the biggest itinerant merchants and this is the home base of these people. So if any airport should be of prime, Enugu airport should be important.