COVID-19, technology changes rapidly transforming aviation sector – DG NCAA
Musa Nuhu is the director-general of the Nigeria Civil Aviation Authority (NCAA). In this interview, he speaks on how the authority is responding to the pandemic and plans for stabilising the aviation industry.
How has COVID -19 affected your plan for the industry?
I had a meeting after my handover from the acting DG, and my discussion was on COVID-19. By then, it had not yet been declared a pandemic but we could see the trend coming. So we had started putting measures in place. First, we discussed how we were going to run the NCAA as an organisation and business continuity plans in place, and how our staff would be working with the development to ensure that whatever happened we would have people running the organisation regardless of the COVID challenge. We ensured we had somebody who would step in and we prepared to reduce the workforce coming.
A lot of our staff would stay at home and we had enough number to run the organisation. Even before the government came out with the directives, we had already been working on that. Basically at that time, it was the issue of survival and plans had to be put in place because whatever plans we had, if we did not survive, our plans would be of no use. So, we had to survive, ensure the organisation survived, and put measures for the industry to survive. It certainly delayed our plans, but with the successful resumption of domestic flights now, you will all agree with me that the response from the public complying with the protocols has been excellent. We started the international flight operations, with time we are going to increase the number of flights coming in as things stabilise. We identified hitches and they were rectified, and we hope things will get much better going forward. We will see the organisation is in a good position to deal with challenges and the emerging challenges, and as you are all aware, COVID-19 has changed the global industry. The rapid changes in technology are also changing the industry, not only aviation but also the ways businesses are conducted. So, we have to reposition ourselves to fit into that so that we can really effectively conduct our regulatory responsibilities.
Would you really say the NCAA has autonomy?
Yes, the NCAA has autonomy in terms of regulations, but the NCAA cannot totally remove itself from the Ministry of Aviation. The ministry is responsible for policy development for the industry and we implement those policies through our regulations. So we must have a line of communication and consultations with the ministry. Also, if you look at the organisational structure of NCAA, we have the minister, the board and then the DG, so we cannot totally isolate ourselves from the ministry, but l can assure you in terms of implementing regulations and otherwise, NCAA is the only body that is doing that and we are doing that without any sort of interference from the ministry. There are some regulations that will be very difficult to implement without the political support of the ministry.
What is the economic health condition of the airlines?
In the aviation industry, the profit margin is very minimal. If you make five percent profit margin in the business, you are considered to have done excellently well. However, with the Covid-19 and the difficulties, airlines’ financial positions are not the best. It is a global phenomenon and there are so many other issues that affect the financial health of airlines that are neither in the control of the Ministry of Aviation nor in the control of the civil aviation regulatory body. For instance, the provision of foreign exchange doesn’t come from us. If a country’s foreign earnings go down, the central bank prioritises, and you can understand due to the lack of maintenance organisations in Nigeria. Pilot recurrent training institutions in Nigeria have to go outside to do these and that entails a lot of foreign currencies. So it is not easy. Also is Jet A1, which is a major factor that airlines have been having difficulties with. So there are factors that affect the health of the airlines that are not in our direct control. The ministry has tried, it went to the central bank when this government came on board, Nigeria owed foreign airlines about $600 million in arrears, the minister through consultations was able to get that off our back and all the foreign airlines were paid. We visited the NNPC to see the kind of arrangement that could be made for the production of Jet A1. In addition, airlines go borrowing at a very high interest rate which we know is very high in Nigeria. If my profit margin is five percent, explain to me how I can break even and pay them and make profit if l take a loan at 20 percent. These are the micro and macro factors that affect the health of the airlines. We try, through our economic regulations, to do the financial audits of the airlines and advise them where we see areas of economic difficulties and see how they can be tackled. One of the things we are doing is to really strengthen the function of the economic regulation through more training of the staff of the directorate.
How is the NCAA doing to reduce bad treatment of Nigerian airlines abroad?
The advice I will give the airlines is that if you are going to another country to negotiate your services, you should involve the regulatory body, the Ministry of Aviation and also your embassy in that country. If a private organisation negotiates with a government entity that is trying to protect its own airlines, it is going to run into difficulties, but if it involves Ministry of Aviation officials, NCAA officials and embassy officials, the country knows that if it makes things difficult for airlines, the other country will apply the same reciprocity measures to their airlines. That makes a big difference. A lot of airlines go and do the deal themselves. They should involve us, carry us along and brief us. We are here to help our airlines grow both domestically, regionally and internationally. I hear them talking about aero politics, yes, an airline from Nigeria wants to go and compete with an airline of another country on their route, of course, it will be difficult for you but when carrying NCAA officials along, it makes a difference. If you make unreasonable demands on my airlines, I will apply the same on your airlines coming into my country, so it is to their benefit of everyone to come out with good terms for all the airlines.