Aviation is a catalyst for any economy to grow –Nogie Meggison

It is sad and pathetic that for the past three months now, we have been experiencing epileptic fuel supply. The fuel supply is affecting airlines in different ways. It is making us delay our flights and not being able to provide services for our clients. Almost 50 percent of our flights are being delayed. A businessman comes to the airport for 9’0’clock flight and departing at four. Most of them go back and those that go may eventually miss their meetings. There is also lost of revenue. This is inconveniencing the passengers who have limited disposable incomes and are finding others sources of transportation. People can transact using the internet or they can travel using the night bus than coming to sit at the airport, waiting for flights.

What are some of the overhead costs the airlines currently have?

We have taken a loan from the bank and we have to pay the interest of the loan on the aircraft and we are not utilizing the aircraft to do what it is supposed to do efficiently. Nigerian operations, holiday operations, most of our landing facilities and equipments are not working. In most of our airports, you can only fly from 7’oclock in the morning and 6.30pm in the evening and aircrafts are built to fly 24 hours. There is a lot of pressure on the airline because they have taken loan on an equipment to run for 24 hours because of inefficiency of the service providers like NAMA and FAAN, you are having to run for 11 hours shift, you now have a deficiency because of the fuel epilepsy to run for just  five hours. For a 24hours business projection, you now have just five hours, you don’t need to be a rocket science to find out what exactly is going to happen to that kind of business. So, the pressure is really on the airlines and unfortunately, the airlines cannot pass that pressure 100percent to clients with the economic situation we find ourselves as a country today. From the loss of revenue from the drop in the oil prices, the blowing up of pipes in the Niger Delta where we are producing 700 barrels below what the target is and the non availability of dollars, it is clear that something will have to be done. We have reached out to the government to come to our aid and we are hoping that the government will listen to us soon.

There is a cartel behind the increase in price of aviation fuel. We bought aviation fuel for N105 early this year and today, we are buying fuel for over N200 a litre. When you move from Lagos to other states, it goes as high as about N240. It is for sure that there is a price fix at the detriment of the Nigerian masses. You can go and look at the profit returns from the oil marketers, they are all making three times what they made last year at the detriment of Nigeria and I believe the government has to step in to stop and break that hold.

We have foreign exchange restrictions for them to import aviation fuel but when you look at the country next door that is also importing fuel like Accra, they have the government assistant. Accra sells fuel at N120 and we have no reason as a country if we want to grow our economy to sell fuel at N200 per litre.  If we want to shot down the economy of a country and sit down in a corner as fuel marketers, not taking the totality of Nigeria as a whole into cognizance, then we are just selfish. Aviation is a catalyst for any economy to grow. It is part of the pivot for any economic stand. Any country that is going through a recession, the first place it gets to is aviation and the government jumps in to subsidise it so that people can continue to travel because we need to spend money to make money. We cannot shot the doors, restricting people from traveling and expect the economy to grow. We can sell aviation fuel comfortably for 40percent less than what is being sold.

The Minister of State, Petroleum has promised that by the end of this year, the refineries will be producing JetA1. We hope this happens because in the seventies and eighties, Nigeria produced aviation fuel and with the price of oil today, if JetA1 is produced locally, we will sell it for at most N75 per litre, which will bring us down to another 65percent off what we are trying to sell. It is obvious the airlines will pass that bulk down to the Nigerian population. We need to do this if we want to get our business back and get the economy growing again.

Sadly the zero duty on importation of air crafts spare parts was announced, written out by the ministry of Finance but it is still not being implemented. I had a meeting on Friday with the Custom Area Controller at NAHCO, who also confirmed that as at 27^th of July, he got a signal to say the parts are now zero duty on airplane but according to him, it is not being implemented because their computer systems have not been updated from Abuja. So, for them to accept it into the system, they have to update it. This is why we are engaging the customs. We believe it is just in a matter of minutes to update and change figures but it is taking them almost a month to effect that change. After we got the letter and it was not implemented, we went back to Customs to complain that it was not implemented and the Area Controller said he got a signal from Abuja on 27^th of Last month but today is the 16^th of August and it is still not being implemented. He said he cannot implement the change on the computer because it is the central control system and he promised us that very soon it will be done. We just hope so.

Two airlines had to fly air crafts out of the country and went to Spain just to change an engine. Apart from the lost revenue as a result of flying air crafts six hours in and out of the country, the labour cost is lost. This also goes for other airlines in Nigeria.