By Kenneth Ehigiator
Recently, the Director General of the Nigerian Civil Aviation Authority (NCAA), Dr Harold Demuren spoke on a range of issues relating to regulation of the aviation industry in Nigeria.
His thoughts, during the interaction with aviation journalists ranged from matters of audit of airlines in the country to that of debt owed b y airlines to service providers in the sector, which had been a sore point to efforts at airport infrastructure renewal.Â Excerpts:
We have opened a searchlight on them, we are looking at some issues like defaulting in the payment of salaries, fuel, payment on insurance, a lot of bad debts. The truth is that you can owe a fuel marketer, for instance, if you buy a N200 million worth of fuel everyday, you can not pay that everyday, you already have a credit line with the marketer. If you are credit worthy, you can owe but if you donâ€™t service your credit, you donâ€™t pay your debts, it shows that you are not credit worthy.
So, that is very important. Those are the things we are going to check. However, insurance, is a no go area because you are not allowed to carry passengers in public transport category for hire and reward without having adequate insurance cover and we have learnt our lessons from what had happened in the recent past. Then, the other one of course is how much you are owing the various agencies; are you paying your landing and parking charges, rent navigational charges to the Nigerian Airspace Management Agency (NAMA) for those doing international operations, charges to NCAA, the Nigerian Aviation Handling Company (NAHCo) Plc, the Skypower Aviation Handling Company Limited (SAHCOL)?
If you are owing in all these ones, it shows something is wrong, you can owe but you must be credit worthy. We are watching these very carefully and the oversight team is already looking at this. Let me say what is the most important, we must ensure that safety is not jeopardize because if safety is jeopardized, the industry is gone.
In this meltdown, we want to ensure that safety is not relegated, you must do your maintenance, train your crew and you must pay your bills. This is the economic audit we are talking about, we donâ€™t want a situation where you donâ€™t have enough funds to run a safe operation. If you donâ€™t have this, you canâ€™t be here and this audit has started about a week ago and it is going to be an ongoing exercise.
The main thrust of this exercise is to ensure that the airlines have enough funds to carry out a safe operation and if NCAA is convinced that an airline can no longer carry outÂ a safe operation, that airline will close shop. The concept is about safety and safety can not be compromised and jeopardized. At the initial stage, we said that safety was number one and our goal has not changed. The goal is zero accident and that is what we want to achieve.
We downgraded the airport then because the fire cover was low, but now, the Federal Airports Authority of Nigeria (FAAN) has rectified that and they now have adequate fire cover for that airport. As at today, the airport can handle Category 9 aircraft type which is B747. And we are watching all the airports in the country.
Yes, the airports we have now can handle the aircraft coming in. The Dreamliner is not too big, itâ€™s a medium size aircraft but with advanced technology, I think the question is what will happen when we have the A380 aircraft and the number of passengers processed quickly through our facilities or not. That will be a great challenge and itâ€™s going to create a major challenge to us but, that is sometime to come. However, we are struggling with ageing infrastructures at our airports and itâ€™s not a problem of FAAN but rather, it is much known to us. The Lagos Airport, like I said, is 1970 architecture. It was completed in the end of the 1970s when we moved in. Then, you have to understand that things have changed, the way we built the airport, we donâ€™t build an airport in such a way again.
Let us remind ourselves of something, our airports are now embracing the Public Private Partnership (PPP) to make sure that we have good terminal buildings, runways are being modernized to meet the International Civil Aviation Organisation (ICAO) standards, we have fire fighting equipment, we have done a lot on the perimeter fence, upgrading the airports and we have also made a lot of progress as far as navigational aids are concerned. The radar is coming in now; the Total Radar Coverage of Nigeria (TRACON) in Abuja is okay and we are still moving on to Lagos , Kano and Port Harcourt .
By the time we do all these things, we will begin to see the dividends of all these things we are trying to put in place into aviation. There are two things in aviation â€“ you have the airside and the land side. Bi_Courtney is on the land side, which you can clearly see and itâ€™s a good facility for the industry and now, we want to improve on that area. We will continue to pursue PPP. Look at what we have been able to do with our airlines, Nigeria Airways is gone but we now have private carriers, what we need to do is to support these airlines to make sure that they are viable and our policies should be done to give them enabling environment for them to operate. To do that, is to make sure they have good routes where they can make money. I think you know that the biggest asset of an airline that is not written in their balance sheet, is the route they operate.
Airlines owning terminal
That has to do with the policy of the government. The government wants to turn Lagos and Abuja airports into hubs, which means we will need more airlines coming in. Again, if there is an existing agreement on the construction of a terminal, that might prevent that. I believe the government is looking at a way of resolving this issue. I have a strong faith that this would be resolved because we are all partners in progress. We have a lot of aircraft and airlines coming in and we have to operate them safely. Iâ€™m not unaware of that but government will resolve it and will make a pronouncement on how this problem can be resolved.
I think they have done very well and Iâ€™m very proud of them. All my colleagues in the world see me and commend our airlines. That is one area they give kudos to Nigeria.
You see, by passing the Civil Aviation Act of 2006 by the National Assembly, it has made the industry developed rapidly. See what has happened to Nigeria , see how new aircraft are coming in.
Look at Arik Air with B737_700 and B737_800. I was in Seatle(USA)Â to receive the brand new aircraft of Arik from the manufacturer and it makes a strong interest to me because the last Nigeria Airways aircraft that we took was the last one that I did and that was over 20 years back. The thing now is to make sure that our airlines are solid that they can break even, get good routes to operate and government give them enabling environment. You must have a safe, secure but profitable airline to be successful.
Crashing of airfares?
An airline is not just the fare, there is what is called the yield. At the end of the day, how much do you make from your flight? Say from Lagos to Abuja , the cost of fuel is N400, 000, how much can I gain if I sell off my ticket at N20, 000 per fare? It shows you need to sell 20 seats, so, you can say it with confidence that at this price, you can make profit but if you are not selling and flying empty, you can then think of crashing the price to about N15, 000 and you are able to sell 40 to 60 seats, you will be making more money than that person who sells at N20, 000 and flying empty. That is how it is. It is a game, which is called yield management.
Donâ€™t forget that fares have been deregulated in Nigeria . The only time we will intervene is when one starts selling ticket at N2, 000 or N5, 000. Then, you must tell us where you are getting your money from. We have everybodyâ€™s airfares on record because the airlines file it with us. So, when a passenger starts complaining on fare, we check our file and inform such that this is what they filed.
Private jets operating charter
It is a grievous offence for anybody to do that. Even in vehicles, there are private licenses, if you are using your car as a private one and along the line, you divert it to kabukabu, it is wrong because you have turned it to hire and reward. If you want to do a taxi, you must go and register, change the colour of the vehicle, take the necessary papers, you must have a metre because you must protect the consumer.
We donâ€™t do that in aviation and once you are caught, you are out because you can not carry passengers. The issue is that the public transport category license is different from other ones. If you have license for public transport category and you are carrying passengers for hire and reward, then you must have an Air Operator Certificate (AOC). If you donâ€™t have that and you are carrying passengers, it is a great offence.
We are watching that and any moment such act is caught, they will lose their license but NCAA must work on facts and not rumour. Actually, the agency has called them and issue a stern warning to them that if such act is truly discovered, such a person is gone because it is a great violation of safety practice in the sub-sector worldwide. Such is endangering the lives of people.