• Wednesday, May 22, 2024
businessday logo

BusinessDay

Aviation sector still at infant stage

Aviation sector

As countries across the world invest in airlines and aviation sectors to facilitate the movement of people and cargoes across the world, Nigeria is yet to find its feet after 60 years of independence, as it has failed to leverage its population and geographical advantages to develop an aviation hub for Africa, thereby losing huge revenues annually.

Aviation hubs serve as transfer (or stop-over) points to get passengers to their final destination. Experts say for a country to become a hub, it has to have strong airlines, have adequate airport infrastructure and be a good connecting location to other destinations.

While Nigeria is blessed with strong geographical location for connectivity, the country has failed to build strong airlines and invest in airport infrastructures to get it to the status of an aviation hub.

In the last 50 years of commercial air travel in Nigeria, over four dozens of airlines have come and gone as a result of politics, mismanagement of funds, corruption, high cost of aviation fuel or financial loss.

Aviation experts over the years have expressed worry over the unfortunate development in the aviation industry; which they said portend a bleak future for the industry in Nigeria.

Some of the defunct airlines include ADC Airlines, African International Airways, African Trans Air, Afrijet Airlines, Afrimex, Air Atlantic Cargo, Albarka Air, Al-Dawood Air, Arax Airlines, Barnax Air, Bellview Airlines, Capital Airlines, Central Airlines, Chanchangi Airlines, Chrome Air Service, Dasab Airlines, Earth Airlines, EAS Airlines, Easy Link Aviation, First Nation Airways, Freedom Air Services, GAS Air Nigeria, Hamzair, Harco Air Services, Intercontinental Airlines, Kabo Air, Meridian Airlines, Nicon Airways, Nigeria Airways, Okada Air, Pan African Airlines, Skypower Express Airways, Sosoliso Airlines, Trans-Air Services, Triax Airlines, UAS Cargo, Virgin Nigeria and Wings Aviation.

Seyi Adewale, chief executive officer of Mainstream Cargo Limited told BusinessDay that airlines fail because they do not understand the realities of aviation as a very principled, controlled and scheduled industry regarding airline checks and its cost.

Adewale explained that domestic airlines do not have prior and appropriate savings, appropriate pricing due to competition, no proper cost outlay at the outset and continue to battle with undulating or increasing aviation fuel cost.

John Ojikutu, a member of an aviation industry think-tank group, Aviation Round Table (ART) and chief executive of Centurion Securities, told BusinessDay that poor and ineffective oversight of compliant on the economic or financial earnings and management of the airlines by the responsible agency have continued to hinder growth of domestic airlines.

Ojikutu further explained that poor management of the government policies on BASAs and Commercial Agreements by the responsible officials has continued to strangulate government revenue earnings and the domestic airlines.

Seyi Adewale recommended that the government implement policies that will impact the industry positively. He said the policies will include encouraging partnerships with local airlines, increasing the barrier of entry such that only well-funded, structured airlines operate.

He suggested that regulators look at airline lease contracts where applicable more closely and minimum number of aircrafts to start an airline.

Adewale mentioned some of the prospects for airlines to include growth of the middle class, increase in air traffic and general movement of goods and services as a result of African Continental Free Trade Area and increase in fleet size.

John Ojikutu explained that except for Nigeria Airways and Aero Contractor, there had been over forty domestic airlines in this country at various times between 1980 till now but not more than six have operated for more than ten years.

Ojikutu suggested that Nigeria needs to review its policies and government and private partnership on commercial aviation especially for the concession of the government owned airports and national flag carriers. Airports concession should be limited only to the non-aeronautical facilities especially the terminal buildings, cargo terminals, carparks, etc.

“No airline should be designated for regional, continental or intercontinental routes and therefore flag carrier except it has regularly fulfilled the requirements of the national economic regulations at regulated intervals of minimum of three years from the national routes to regional, continental to the intercontinental routes.

“Airlines so designated as national flag carriers must be quoted at the Nigerian Stock Market and may be called upon for national assignments and be entitled to government palliatives in the event of any global or national emergency,” he added.