Uko: Nigerian Airlines Need Govt Support
Travel expert and organiser of Akwaaba Africa Travel Market, Ikechi Uko said government should support Nigerian airlines to be able to compete favourably with their foreign counterparts. He spoke to Chinedu Eze. Excerpts:
Most of the airlines in Ghana are targeting Nigerian market, what is the enormity of what we are losing?
The normal thing is that every country should get the benefit of its own resources. The best resource Nigeria has is its population. And that is why population counts in the size of GDP; the biggest GDPs are usually the countries with large number of people because that is the market. When everybody invites Mr. President to sign an agreement, what they are actually looking at is your market. But we as Nigerians don’t see these markets, even when we know it, we create obstacle to prevent people from using the market in Nigeria.
Some people in this country have the fear of Nigerians getting rich on Nigerians and they try to prevent it. They will rather allow foreigners to enjoy such benefits that to allow their own citizens to gain from that. Without (President Goodluck) Jonathan and (President Olusegun) Obasanjo, we couldn’t have produced a Dangote. We go out of our way to prevent our own people from growing, or rather give that advantage to a foreign organization because we don’t know them. So we don’t want Nigerians to benefit from our own population. If not why would we prefer that Nigerians fly foreign airlines when we can create more billionaires from aviation industry?
If one airline becomes very successful in Nigeria and airlifts majority of Nigerian travellers, whoever owns that airline or people involved in that airline will become billionaires. So why are we afraid of growing wealth among Nigerians? Why do we prefer others to gain from us? That is what I don’t understand. We prefer to create an environment where a Nigerian car importer will not sell as much as a car importer in Cotonou. We have built systems like that; we will create tariff structure that will benefit people in Cotonou. And for the past 20 years or 30 years it has been the same and we have never changed it. We have done nothing to change it and we keep building more obstacles and creating more billionaire and millionaires outside Nigeria.
And this also applies to aviation, with a huge travel market. Our official budget is how much, $4.5 billion according to the Minister, that is the travel budget. The whole of that amount will go into the pocket of foreign airlines. So why do we do that? No matter what Arik, Air Peace, Aero has done to Nigerian, it does not justify the fact that we carry our national wealth and give to foreign airlines. So Arik has more staff than any foreign airline in Nigeria. Aero has more staff than any foreign organisation in Nigeria, so it necessary that we drive most on growing the skills of these people.
The normal vehicle would have been a national carrier but the government says they are not interested in national carrier, so what next do you do? Then create skills for the Nigerian carriers; they can play at that level. Rather we are antagonising them, yes they owe money but how much did EU allow Italy to give Alitalia before eventually its stakes were given to Etihad and if you check almost all the European carriers that Etihad bought, they were all on government subsidy. There is no airline in the world that is not getting a form of support, no successful airline that is not getting a form of support from its government.
So I think that it is not in our own interest, as at now I personally prefer a national carrier but in the absence of a national carrier then let’s make Arik, Aero, Medview and Air Peace successful. Whatever it takes to make Med-view and others assume the role of global players we should do that, not antagonizing them. And if you look at it now, Ghana has opened up their economy, they are liberalising everything according to the agenda 2053 of AU. So they are giving 5th freedom rights to a lot of airlines out of Accra. They have started the visa-on arrival for all Africans and already most of those international organisations, which have NGO in West Africa are choosing Ghana for their headquarters. But the strength of that economy is still very small compared to even Lagos State.
So we can create the environment that benefits our own people. Now, South African Airways has fifth freedom right from Ghana and they fly from Accra to Washington and most of the passengers you will see there are from Nigeria. Ethiopian Airlines is starting a flight from Lome to New York and most of those passengers are from Nigeria. Ghana has given fifth freedom right to Air Maroc to fly from Accra to everywhere; they have also given to Egypt Air, Kenya Airways to do some of those West Coast routes.
The passengers in West Africa are out of Nigeria. But we are not saying we should stop other airlines, the negative argument of stopping other airlines from flying and don’t give rights to other airline is a negative argument. Instead of doing that you encourage competition then support Nigerian carriers to win the fight. There is no need stopping multi-designation and the rest of them; that deprives the passenger benefits because that is monopoly.
But what you could do is you open up for competition; then you help your own airlines and give them an advantage. And that advantage could be in form of waivers; subsidies, could be lower fees or charges as Nigerian carriers. So the government has to bring a basket of benefits to now transform these small carriers into real flag carriers. You don’t call people flag carriers just by mouth; there has to be a basket of benefits that we will give to them that would enhance their capacity.
When you look at Ghana, just like Ethiopians, they don’t travel, the Bole Airport is just a transit facility, do you think Ghana can play such role in West Africa?
It is already playing such role because most of the business class passengers in Ghana are from Nigeria. And in the last one week I can tell you how many Nigerian travel agencies have asked me for contacts in Ghana, they want to start selling tickets of airlines that operate from Ghana. I can tell you this; that I have made such connections for people that are one.
They are building a massive new airport and already it is a functional airport, it is a small but functional airport. How about Lome? Lome is already becoming a hub because Asky is growing bigger and Asky will be flying to Europe in the next one and half years. They are taking new aircraft now and they are acquiring wide bodies aircraft before the end of next year. They are serving the whole of West Africa, but when you say West Africa the biggest traveling public in West Africa is Nigeria. You know you cannot create a hub without a strong airline. For you to have a hub you need the airline. It is always better if you own the airline, if you check all the major hubs in the world they are driven by particular airlines, even in Africa.
I have the impression that most businessmen and women that travel from one country to another in West and Central Africa are largely Nigerians?
Yes, the fact is already there in that the International Air Transport Association (IATA) report. They said Nigeria is one of the most connected countries in Africa. They checked the number of points that are linked to any particular country, so Nigeria is one of the most connected points in Africa. The biggest businessmen across Africa, Nigeria is one of them, but for intra-Africa business I think now South Africans are the dominant players across Africa. They also have the support structure; they also have strong airline.
If you check people who move around it is always backed by airlines. Kenyans by Kenya Airways, if you take away Nigerian and Jamaicans, the third largest Africans in America is Ethiopians and it is courtesy of Ethiopian Airline flying there for the past 40, 50 years. Nigerians do business all over Africa but most of these businesses will depend on other carriers. In investment, South Africa earned about $200, 000 some years ago out of Nigeria, but last year they made $11billion, that tells you the skill of growth they have had.
The linkages are necessary; you put all of those together, because aviation drives business. There is no way Nigeria would have grown without movements. So everybody is building hub around you, and we are just talking. If Emirates starts up what they are trying to do in Angola; that is the West Coast of Africa, which is the nearest to Latin America, nearest to America, just like Ethiopian airlines have opened a West Coast hub in Lome and South African Airways is trying to open a hub in Ghana.
So the normal thing is to encourage airlines like Arik, Aero and Medview; give them whatever it takes to make them to expand and explode. There is no reason why we cannot create a billionaire out of aviation in Nigeria. So people should stop that attitude of, let all of us stay here, you see it everywhere. We will back foreign owned things but we will never back any Nigeria owned business.
You see such happening in our football, they even want to hire a foreign coach and the Minister asked them who is going to pay the foreign coach, they said it is sponsors. He said why couldn’t the sponsors pay Nigerian coaches? Why do they owe them? But you have money to pay foreign coaches. It is the same mentality; it is because if you pay the Nigerian coach, they will say why should we give N10 million to Stephen Keshi as coach? But you are willing to give that money to a foreign coach, which may not even give you the result a Stephen Keshi may give you.
The Jews said that their money stays with them and circulates among them 10 times before it goes out but here within two seconds it is out because the contractor you will give job is an expatriate, an expatriate personnel will do the job; you will import everything you need from overseas. I look at things this way because I deal more with foreigners; that is the more reason why I am fighting for Nigerian airlines; there is no other reason.
But Nigerians say that airlines are privately owned and like private business they should not expect any help from government?
When Nigerians say the airlines are owned by individuals and that intervention fund was given to airlines, they should realise that it was used to pay the banks the monies owed them by the airlines so that the banks would not collapse. Why did we set up Asset Management Corporation of Nigeria (AMCON), which took away all the debts of the bank so that the banks will not collapse? Are the banks not owned by individuals? So why is it necessary to make sure banks don’t collapse? It is because the banks are very critical to the economy, but so are the airlines. Two, why is it necessary that even the intervention fund that was given to the airlines was to pay bank debts. They were not given the money for running costs; they were given the funds to pay debts they owed banks so that the banks would not collapse.
The reality is that we are being ruined. I told people recently that Delta Air Lines pulled out of Dubai and their reason was that Emirates was being subsidised by the government. And Emirates responded by saying that Delta and United were also being subsidised by American government. So despite 400, 000 Nigerians that fly to Dubai regularly, Arik could not survive their operations to that destination. Arik has to pull out despite the fact that such number of passengers goes to Dubai from Nigeria. The Nigerian carrier did not survive. Doesn’t that tell you something? And now Med-view management says the airline is going to go to Dubai, has he not learnt a lesson?