Airport concession should top FG’s 2022 priority in aviation – Adewale
Seyi Adewale is the chief executive officer of Mainstream Cargo Limited, a company that connects Nigeria to the rest of the world through its partner Freight Forwarding (FF) representatives globally. In this interview with IFEOMA OKEKE, he speaks on projections for Nigeria’s aviation sector in 2022.
Can you give an assessment of aviation in Nigeria in the year 2021?
Our aviation sector was largely positive in the just concluded year (2021). The positives include the lower impact of covid-19 as compared with Europe, UK, USA, Turkey, Brazil, India and many other countries. The NCDC figures reveal this and this has impacted positively on our travel industry. Many countries have eased their travel restrictions against Nigeria and flight schedules and frequencies were gradually getting back to the pre-pandemic figures. Similarly, cargo volumes are returning back to the pre-pandemic figures and our passenger travel figures were at least 50.7 percent higher than the 2020 (pandemic) figures.
Importantly, our local airlines improved their fleet with brand new aircrafts such as A320s and E-195s and some with newer ATRs aircraft that are more fuel-efficient and we began to witness the entry of low-cost carriers into the sector. The passenger began to be the beneficiary of these good developments with increasing options, choice, destination, on-time-departures and reach. We did not record any commercial airline mishap and kudos to the Nigeria Civil Aviation Authority (NCAA) that is the regulating body for airlines/ aviation. They appeared to be more independent in their regulatory functions in 2021.
Furthermore, the federal government procured and invested in critical assets and infrastructure and new airports were built and commissioned by state governments. Also, the federal government came up with a 5-year development plan as it affects the industry that includes the inauguration of a national carrier and the planned concession of at least four international airports.
However, we witnessed a few negatives which include our diplomatic row with United Arab Emirates (UAE) and the implied Bilateral Air Services Agreement (BASA) issue that appears skewed to the detriment of the country. Also, the interference of the National Assembly into the tariff issue between airline operators and ground handling companies which is within the scope of economic regulation of the NCAA is a negative from our standpoint.
Nigeria was badly hit by COVID-19 in 2020. Recovery commenced in 2021 but Omicron slowed the recovery process again. Compared to other countries, do you think Nigeria’s recovery process was fast?
Yes, I believe our recovery (process) was fast. The reasons may include the very strict travel entry and departure protocol set by the Presidential Task Force (PTF) on Covid-19. The quick ‘red-Listing’ of highly infected countries like Turkey, Brazil and India during the ‘heat of the Covid-19 moment’ assisted us in limiting the Covid-19 spread. Also, many state governments especially Lagos State, the Covid-19 Epicentre stopped middle-junior workers from physical attendance in offices and many companies followed suit. Similarly, the high restrictions, penalties for violators of PTF regulations especially as it affects social and religious gatherings were effective. All these summed up, led to the relatively low transmissibility of Covid-19 within Nigeria and this aided our quick recovery process.
The aviation sector has a lot of projects it hopes to clinch in the year 2022, including national carrier, delivering the new terminals, airport concession, Maintenance Repair Overhaul (MRO) etc. Which of these projects are more urgent for us and why?
In my view, three of the highlighted projects stand out and my order of priority is first, airport concession. International airports are major gateways to any country and country perception via the gateway is impactful and it sticks. Our international airports are significantly below par when compared to airports in Egypt, South Africa, Kenya, Ethiopia, and even Ghana. The concession will gain us the opportunity to rebuild, develop, improve, upscale and upgrade all aspects of our international airport infrastructure. We should be the West African Aviation Hub and Gateway. Second is the national carrier. The positive and beneficial impact on our Bilateral Air Service Agreement (BASA) is huge. We will also reduce Forex outflows due to foreign airline fund repatriation. Others include job creation to reduce unemployment amongst the youth. Third is the MRO. This also will reduce capital FX flight from aircraft repairs, maintenance and overhaul.
Which of these projects do you think the government can deliver in the year 2022 and what will be the ripple effect on Nigeria’s aviation sector?
The federal government could close out on the first two priorities mentioned earlier (airport concession, and national carrier) early enough in 2022. The federal government proposed the national carrier to take off Q1 2022 and airport concession follows a similar timeline. The closeout and commencement of the two priorities will be a catalyst for growth and development of the sector, create new jobs, upgrade/upscale our infrastructure including ICT, the implied knowledge transfer embedded, new or improved revenue lines (opportunities) for government, regional hub status, development of adjourning airport areas and potential innovation and new business modelling by entrepreneurs who take advantage of opportunities.
Nigerian airlines may be bringing in new planes in 2022 as orders have been made and delivery processes are being mulled. What will be the effect on this on the country’s aviation sector?
There are great advantages regarding our local airlines procuring new aircrafts. The advantages or benefits include cost of aircraft maintenance being significantly reduced, delight to passengers that should be willing to pay for increased fares noting qualitative services, attracting further investments and development into the sector and encouraging aircraft manufacturers to build MRO stations in Nigeria. Embraer is already mulling building one in partnership with a local airline and state government. The acquisition of new planes will also reduce carbon emission and fuel efficiency and up skill and enhanced training for airline workers/staff.
Some stakeholders have raised concerns that the major airports such as Lagos, Abuja, PH, Kano, Enugu and Owerri do not have adequate parking spaces to accommodate more planes. How will this affect airline operators and the sector?
This is the reason why we need new investors into the industry/ sector. They will bring new funds to build or expand runways, develop unoccupied airport (land) spaces to build aircraft parking space or hangars, introduce slot management in order to manage imminent traffic and remodel the airport for better efficiency etc.
Do you see air freight increasing in the year 2022?
Most definitely, I foresee an increase in air freight. This will be driven by e-commerce, new manufacturing plants, creation of special economic zones including the proposed agro-processing zones and FG/ CBN/ NPC supported Agric produce or product exportation.
What do you think the government can do to encourage exports by air in Nigeria?
Already the AfDB is supporting the federal government by committing great funds ($520million for Phase 1) into the creation of Special Agro-Industrial Processing Zones in the six geo-political zones of Nigeria. This will bring Agric producers, aggregators, and distributors to operate within the same vicinity and reduce transaction costs and share business development services for increased productivity and competitiveness. We will begin to export local produce/ products in a good, accepted, traceable and validated manner.
How is Mainstream Cargo Limited bridging the gap in facilitating cargo imports and exports in Nigeria?
For us at Mainstream Cargo Limited, we use our vantage or privilege position to educate our client-customers on the right and proper ways of doing importation and exportation of their cargoes in a cost-effective, safe and secure manner. We are determined on this cause because it would be to their benefit (advantage) in the long run and they will appreciate or value us even more. Our client-customers save cost, improve efficiency, reduce customs clearing delays or detention, improve their procurement, logistics or transport divisions etc.
Furthermore, we are very fast and efficient because of our broad knowledge, technical prowess, global network, ability to handle, process, label and pack dangerous goods, sound advice on Form M or NXP processing, advice on right HSCode, paying correct customs duties and seamless delivery services remain our cutting edge. In addition, through our client-customer engagements, we expand the opportunities for them via Temporary Importation Permits (TIP) which they believe it’s difficult to get amongst other options we explore or introduce to them. In summary, it is our quality service, technical know-how, global reach, good communication (feedback) mechanism, excellent client compliant management and resolution strategies that stand us out. Many of our staff are A Grade with many including myself having distinction in IATA (Certificated) Courses.