Shehu Iyal is the managing director, Afri-Air International Limited. He was also the Senior Special Assistant to the Presidency on the Presidential Fleet. In this interview with IFEOMA OKEKE-KORIEOCHA, he speaks on how demand, fuel cost and cost of aircrafy determines airfares. He also hints on what airlines and government can do to for the aviation sector to thrive.
What can you say about the scheduled commercial airline industry in Nigeria?
There is a great leap and great fulfilment in airline business in Nigeria; notwithstanding the circumstances and situation they found themselves. And you can see the number of airlines we have today and you can see the facilities at the airports from what we had 10 years ago. You can also see the new planes that are coming in. The aircraft are quite modern, cost effective and very safe to use.
Airline operators have always complained of high cost of operation in Nigeria; can you say the current fares charged by the airlines are commensurable with the cost of operations?
You have to be fair to the airlines. What about the cost of aviation fuel, which you know is a major factor? What about the cost of acquisition of these aircraft, which you know is very high and you pay heavily for aircraft leasing and insurance. If you are in Nigeria, you know what we go through. But overall, I think the fares should be looked into and stabilised for better conditions both for the passengers and the airlines.
But for now, I think the demand side is higher than the supply side. And sometimes, it determines the price. Most airlines in the world don’t acquire aircraft directly; they lease.
It has been agreed that Nigerian airlines pay more for insurance and aircraft leasing. Is there any advice you can give the government and the operators to bring down the high insurance to be comparable to what is obtained within the continent?
Yes there is. There is a need for the government to come in either with funding or to create some kind of guarantee for the airline industry. There is no way we can continue with the current rate. All over the world, the interest is single digit. I think the government should do what they are doing now. Government dedicated some funds to the Manufacturers Association of Nigeria (MAN), which should be disbursed to serious minded businesses and created at a single digit interest rate. Government should also do the same for the aviation industry. It should earmark funds to be accessed on a long term basis and on a single digit interest rate. That will go a long way to help airlines for the purchase and leasing of aircraft. If it is leasing the government should find a way or an organisation that can stand as a guarantor for these airlines. I think it should help a lot.
Read also: Flight delays loom as aviation workers set to join strike
Air travellers believe that all flight delays are caused by airlines alone. What are the causes of flight delays and what roles will the regulatory agency and airlines play to curb this?
There has to be a very strong synergy between the two. The infrastructure in some of the airports are not adequate. The check-in counters may not be adequate. So, sometimes those issues create delays. And again; other things that cause delays are the non-availability of aviation fuel and bad weather. But, for a passenger, all he knows is that the airline is responsible for the delays. So, normally, there are three variables that control flight operation; weather, technical issues and the availability of aviation fuel. Indeed, the most important factor in any flight, in any operation is the availability of aviation fuel as at when due or when needed. These are the things that the ordinary passenger doesn’t know. And so, there has to be a way of passing this information across. But there is another solution. Some of the infrastructure deficiencies can be reduced greatly if there is collaboration between the owner of these airports; that is the Federal Airports Authority of Nigeria (FAAN), and private investors on infrastructure development. This will enhance state of the art airport facilities, which everyone can benefit from: the airlines, the passengers and government, which will earn higher revenue, as the airports attract more users.
VIP movement, which is a very big factor in flight delays, seems to defy solutions. There was this consideration that instead of stopping for 30 minutes when there is a VIP movement, they could adjust it at that point in time to reduce the time for waiting, what is your say on this?
I disagree with you totally. It is not possible. There was never a time that the VIP movement was 30 minutes because I was in the presidency and I was involved in some of those movements. What happens is, in most instances it is not more than five or 10 minutes. But there is a backlog and a buildup and it affects the airplanes that are on ground. The control tower has to clear the aeroplanes that are up there before it starts clearing those on the ground. But, I think nobody in his right senses and nobody who is responsible for that will create a delay for 30 minutes because of VIP.
In the effort to curb flight delays, the airlines are thinking of codesharing, do you see this work in Nigeria?
Well, I think with time and maturity it can work. But it is not something anybody can impose on them. It is something that they, on their own, will decide to do. I think we are almost there, with the Airline Operators of Nigeria (AON) and other groups that are talking to them, they will realise the value. You know some of these airlines are created out of ignorance and most of the people that established them don’t know what is in there until when they get into the market. But, I think the plan is very good and it will help a lot.
Sir, what is your evaluation of safety in the Nigerian aviation industry right now?
I think from my own experience, which I think is quite reasonable; our safety level has greatly improved. When was the last time we had any accident in any of our commercial airlines? So I think it has greatly improved because of training and retraining, seminars, courses and the kind of equipment we are operating in the country now. And whether you like it or not, I think you must give kudos to the Nigeria Civil Aviation Authority (NCAA). Whenever there is possible infringement, they come early enough to stop it.
Commendation should also go to the Nigerian Safety Investigation Bureau (NSIB) for what it is doing. I think it is doing a great job. They are properly equipped now and they have a lot of training for their personnel. And from time to time, they give safety recommendations emanating from their accident and incident investigations. The same thing goes with Nigeria Meteorological Agency (Nimet) about weather. I receive weather reports daily from them. I also receive warning reports on safety. So, safety wise we have gone far, far ahead than where we were some five or 10 years ago because of training and retraining, proper equipment, navigational aids and landing aids that we have, runway lights that have improved even though there is room for more improvement.
How do you think the government can assist the airlines in terms of funding and credit facilities?
Certainly, I have said it and I will repeat myself. The government can come in by creating special funds that can be disbursed through the Bank of Industry (BoI) at single digits. This is strictly for airlines and strictly under the supervision of BoI. And if we have that, I think it will go a long way in improving the situation that we have here.
What is your idea of concession?
Well, my idea may not be the idea of everyone. But, I think the concession should be total. If I am going to take an airport and do the concession, and run it for a while, the concession should be total; not just the terminal. And when I mean total, I mean, inclusive of the runways. People may have a contrary view, citing national security, but I think there can be a synergy between what company is given the airport and the security and the regulator. The most important thing is that we must have a very strong, efficient, well-trained, well-equipped regulator and then we can move forward.
I have seen it in Niamey, Niger Republic. When the airport was under the state management, it was like any other airport in Africa. Then it was given out in concession and everything changed. It has modern facilities now and it is run efficiently. Most of the people that work in that airport are the indigenes of the country with expatriate supervisors.
What are some of the things or recommendations you want the government to do or the policies you want to see reviewed?
They should look into the taxations. There are too many charges, they should be streamlined or possibly reduced. If possible, some start-up companies can be given tax holidays because aviation business is capital intensive. This is something that will go a long way in helping to sustain businesses in the aviation industry.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
