Africa: Nigeria needs formidable carriers to enjoy open skies – Aero boss
The Chief Executive Officer, Aero Contractors, Captain Ado Sanusi, in this interview with MAUREEN IHUA-MADUENYI, talks about the challenges facing domestic airlines, the national carrier, among others.
You have been running Aero Contractors in the past two and a half years, what has been your experience?
It has been a rewarding experience for me because we have achieved a lot with the team we have and have put in place a lot of things that will go down the history of aviation in Nigeria; we have changed the game of maintenance for local and regional airlines.
Part of our target was to boost maintenance and the airline’s strategic business unit. When I joined, we had only one aircraft but now we have four aircraft and if you look at the helicopter section, we started with one when I joined; now we have five. We have moved the airline from distress and crisis to a stabilised state where it is on the part of development and we are looking forward to its full recovery.
Our aim is to make sure that at the end of the year, we have six to seven fixed wing airplanes and at least six helicopters flying. We also have the strategic business unit of training, which we call Aero Training School. It has got the approval of the Nigerian Civil Aviation Authority and we have moved it a step further from doing in-house training to offering training for third parties, not only Nigerians but also people from West and Central Africa.
So, in the two and half years that I have been here, Aero has witnessed a remarkable improvement in its business. When I came in, we were doing about eight flights covering Lagos, Abuja, Sokoto and Port Harcourt but now we are doing close to 26 to 28 flights daily and very soon we will start going to the eastern part including Owerri and Enugu.
We are expanding gradually on the domestic routes, and we will also start our regional routes; starting with Libreville, Gabon; Malabo and most likely Douala will follow. These are all going to happen within the next six months.
I am also happy and proud that we have achieved remarkable improvement in our Maintenance, Repair and Overhaul facility, we first conducted C checks on a 737 classic last year and since then we have done so many others. Two on our own aircraft and on third party aircraft too. So, as I said, it is a game changer and the airlines that are operating within the region do not have to fly six hours to Europe, East or South Africa to do their maintenance, we can do it in Nigeria.
We are very comfortable because we are using local talent; when we started we were using Ethiopian Airlines Technik and South African Airways Technik for our maintenance arm because they have experience in doing C checks but now we are even doing the first 1 D-Check on 737 classic in West and Central Africa.
So the MRO is growing, we started with two Cs to six Cs which is equivalent to 1 D-Check, which is one of the most extensive checks you can carry out on an aircraft. In the next six to seven weeks, we will roll out the first D-Check.
What kind of support have you received from other airline operators as well as the government on the MRO?
We have received tremendous support from the Asset Management Corporation of Nigeria without which we wouldn’t have achieved all we have. They supported all our initiatives. We are also happy about the partnership we have entered with all the domestic airlines. I do not think in the history of aviation that cooperation among local airlines has been as high as it is now.
We’re very happy that they have shown interest in our MRO and have been patronising us, I commend all their CEOs who trust us and have been giving us jobs to help develop the industry. We are expecting more support from the government, we would like the government to look at what we are doing, we are providing jobs for Nigerians and I think any private entity that is providing jobs should be supported so that they can grow and we have the capacity to grow.
By expanding our hanger, we will also give more jobs to Nigerians. These are the things I think the government can do to support an existing airline that has shown the capacity to grow.
Aero recently celebrated its 60th anniversary, even though you haven’t been there all along, what can you say has kept the airline in business for this long?
Aero is the oldest aviation company in Nigeria and I think the main factor that has kept it going is the safety record. Aero has grown to a brand name synonymous with safety and reliability.
The Federal Government has taken some steps to protect airlines such as offering waiver on parts and VAT. What else can be done to help the industry grow?
There are problems domestic airlines face that put the average lifespan at 10 years. There are things the Federal Government can do to help local carrier and help them grow. Airlines must change the way they do things so they can survive and conform to international standards, especially in corporate governance. People own businesses and run them well but there must be a demarcation between ownership and running the business.
Outside that, the number of taxes that airlines are made to pay is much and affects their well-being by eating into their profits.
These things that are outside the control of the airlines are taxes, cost of lending, country risk, insurance and lack of infrastructure and then general operating environment is not supportive for them to operate profitably.
The removal of VAT is a welcome development, we hope they will implement it as quickly as possible but beyond that we have to look at the taxes and levies that aviation parastatals demand from airlines because if the airlines are weak financially that will be a reflection of what the parastatals are doing. If I can’t pay NCAA, FAAN or NAMA the bills they send to me because my finance does not support it, it means they can’t perform their duties too.
The Federal Government should look at this, it has not worked for years and if it hasn’t worked for years, we don’t expect it to work, we have to look at the funding of the parastatals separately. Yes, the airlines will pay for services but we can look at what is done in other countries and replicate it. I think the NCAA should be funded separately because if the NCAA is a regulator and those they are regulating are those funding them, there will be issues.
The arrangement of airlines funding these parastatals does not work perfectly, I believe they should be funded separately while airlines pay for services but I don’t think airlines should solely fund the parastatals. If the airlines are struggling financially and the parastatals are also struggling financially, that is not a healthy environment at all.
Stakeholders are of the opinion that interlining should be encouraged to reduce overhead, what is your take on this?
In Aero Contractors, we are doing interlining now with Arik, Med-View and we have done it in a bilateral format. It has worked wonderfully and I believe we should get the airlines to come together and agree to codeshare, it is good for the customers and the airlines as well.
A lot has been said about foreign airlines’ operations in Nigeria, how do you think the government can create a balance between them and domestic carriers?
It is either we allow foreign airlines to have multiple destinations in Nigeria so passengers can have options or we give them limited access to our market and allow domestic carriers to develop and bridge the gap. I think the latter is better because it will encourage local airlines to grow and feed these limited destinations given.
I usually correlate this with the ban of rice, if you look at it, we could have allowed importation and the customers will have options but the country will suffer. Government banned it and encouraged farmers to cultivate rice to feed the nation and maybe export.
If we put that into the context of aviation and limit foreign carriers, yes the passengers will not have the choice of flying from everywhere but you would have given the facility for local airlines to grow. I think multiple destinations for international carriers is a double- edged sword; yes you want to give Nigerian flying public options but on the other hand, you are depriving Nigerian airlines of good business.
The argument is that Nigerian airlines don’t have the capacity to do it, but when will they have the capacity if you don’t give them the chance? The rice farmer was given a chance and even soft loan to help with rice sufficiency in the country. It is a success and I think if the government does this in the aviation industry; it will definitely boost the growth of local airlines.
What do you think about the open skies policy?
It is a good policy especially for countries with developed aviation sector and a major carrier that can benefit from it. The truth is that open skies will encourage trade. But it is just a step, we must look at free movement of people by removing visa restrictions and then we also have to protect our businesses in-house by making the airlines able to compete.
If we do it quickly, we will tap into the single sky initiative which is very good. We need to have formidable carriers to enjoy it or our neighbours will enjoy it better.
Do you support the establishment of a national carrier as that formidable airline?
Every patriotic person will support a national carrier; it is a pride for a country to have a national carrier. After all British Airways was a national carrier at a time. There are things that are good to have but does the government have the resources to do it?
That is another question. Have we seen and solved the problem that made Nigerian Airways go under? Have we addressed them so that when we create a national carrier the same problems will not occur? Have we looked at what the most successful carriers owned by states have done and how they did it?
If we have done these and everything seems good, then I think it is good to have a formidable national carrier. The problem will be that the same national carrier will be in the same environment where we are operating, and the same things affecting us will affect it. A holistic approach into aviation reforms will go a long way into helping existing carriers to grow and also if we are creating a new national carrier, it will help it grow and it will be sustainable.
There are so many things that need to be addressed to put the industry on the path of growth; we should have a good roadmap that is practical and achievable.