By NKIRUKA NNOROM
Mr. Richard Akerele is the CEO/Managing Director of Aviation Services and Logistics Plc, a major player in in-flight catering services in aviation sector in Nigeria with about 20 years operating experience in the aviation business. In this interview with Vanguard, he posited that the aviation industry is suffering from administrative lapses, lack of continuity and proper coordination among other things. Excerpts
What is your assessment of the Nigerian aviation industry in recent time
I think most Nigerians are disappointed with present position or disposition of the aviation industry in our country. This is being accentuated by the recent unfortunate accident of the Dana Airline some weeks ago in which over 150 people perished. I think it highlights some of the problems we have in our industry today.
I am not speaking as a technical aviation expert but as a concerned individual working in the aviation industry for over 20 years. I have been working in aviation since 1990, so I believe I have some knowledge of aviation in Nigeria. I think the Nigerian aviation industry is suffering from a lack of continuity and a proper plan: well thought out plan, taking account of where we are and we where will we like to be in the next thirty years.
I think this road map is important to give us direction. I also believe that those running the aviation sector should follow the road map and therefore having continuity as we move along the continuum. And what do I mean by this? I could be wrong but I believe in the last 12 years, since 1999/2000, we have had in Aviation/ Ministry of Transport, when we have Ministry of Transport running aviation, some 10 ministers, equating to almost one minister every 1.3 years.
You see without a road map followed, each minister has his idea of what it is he/she wants to do which means that progress is slowed and can be confusing. Over there in the Federal Aviation Authority, I believe we have had something like six managing directors in 12 years, which is one DG every two years. Again, it does not lend itself to continuity and therefore becomes a problem and can be confusing.
So, for you continuity is basically the problem in aviation industry. What of infrastructural development
Yes. The continuity is not there. What I have experienced in the last few years- in the last 15-20 years exactly- every new administration brings in new idea and always has a winning formula. We are yet to stick to a continuous programme. For anybody, it doesn’t matter whether you are in the Ministry of Aviation, it doesn’t matter whether you are in government, if it is in school or in your own personal life, you need continuity, otherwise you will tend to miss the goal you want to achieve.
That is why I think the fundamental problem is lack of continuity. There is lack of infrastructural development, there is lack of plan as well, but lack of plan is the main issue. You may realise that seven years ago, we re-laid the runway at the local airport.
Still, today, several years after, there is still no light in that runway which raises the question- what happened? There are numerous projects around the airport. The car park has been lying fallow for the past four to five years at least and the story goes on.
We need to really develop our airport and infrastructure at Murtala Mohammed Airport which is our main airport. We are doing this, but in a fashion I consider not a planned way. I think because of this, there is a major problem in aviation in Nigeria which falls into other areas.
In respect to security, we have made some improvement, but we have a lot more to do. We need to become more vigilant and more professional in our approach to aviation in general. I will like at this point to say that unless everybody within the aviation sector and indeed within the government and within Nigeria and all over Africa come together to work together with one another, it could be difficult to succeed in any meaningful level.
What do I mean by this?
You may realise that in European countries and other countries around the world, they work together to achieve their objectives. It is like a football team, everybody has one goal to meet. I have found out that in Nigeria, there is lack of cooperation between the officials of government and private practitioners. We should be working together to achieve the same objectives and our objectives should be one and the same.
How do you think the airlines can be adequately funded because as it is, there seems to be paucity of funds for their operations
That is no doubt. I believe that if you take the airlines, particularly in Nigeria, the local domestic airlines are inadequately funded and this leads to problem. Two or three aircrafts do not constitute an airline. I think this is a problem in itself.
I think there is not enough capital invested into these companies to make them viable and this has to be looked into. It needs to be looked into: to know if mergers are required, but we definitely need to have stronger, financially backed airlines in order to ensure that they are able to run their businesses.
Aviation is a highly technical business, it is not a trading business and therefore it must be taken very seriously. For the airlines to succeed, they need to cooperate among themselves and I also think that any subvention or subsidy the government wants to do must be specific. I do not believe in handing out cash to rescue our airlines.
I think this is a failed approach. I think it is borne out of the recent N300 billion government bailout that was provided which has somehow has disappeared. I think government subsidy should be in place, and it should be inform of direct subsidy.
In other words, there should be reduction in landing and parking fee for the airlines or complete abolition of parking fee for local airlines, which is a direct subsidy by the government, which does not involve cash transfer, but nevertheless will reduce, significantly, the operating cost of these airlines.
With better funding, the airlines will be better able to service themselves and their customers. I believe that kind of subsidy is better than cash. I also think this kind of subsidy can make our airlines to fly internationally, and be more competitive. We must have a good, strong local domestic airline.
It is a prerequisite for a hub in any part of the world. Today, we do not have any strong domestic airline or national flight carrier, and therefore the idea of having a hub is yet to be realised and we will continue to be so until such time we have a strong domestic/international airline.
Now, having direct subsidy like free landing and parking fees for domestic airlines that fly internationally will give us competitive advantage, and will also reduce the cost of ticket which will encourage Nigerians to fly on the local airlines and therefore strengthen those airlines.
So, I believe direct subsidy like this will be very helpful. It will make our local airlines more competitive and if they become competitive, they will also grow and therefore we should have a hub.
What is your view on putting restriction on the number to times international airlines can fly into this country
I do not buy into the general thinking that we should restrict the numbers of flights which international airlines can make into Nigeria. I say this from my own narrow perspective because I believe it is hindering development in the industry and protectionism of the wrong type is not really beneficial.
Why do I say this? I think over the last few months this year, there have been on-going arguments over the prices of tickets to fly to Europe and rest of world from Nigeria. There have been arguments that compared to other parts of the world or our neighbouring country like Ghana, the prices of our flight tickets are higher using Virgin Atlantic and some other European airlines.
I find it difficult to compare Nigeria with Ghana: Ghana is a relatively poor country compare to Nigeria, and therefore cannot afford the same things that we have. Their country is smaller as am sure you are aware. Lagos alone probably has more population than the whole of Ghana, and therefore our demand is higher.
The basic economics of demand and supply will tell you that where you have higher demand, you are likely to have higher prices. So, from that perspective, I think the immediate question should be how to alleviate this problem. One way to alleviate it will be to allow international airlines like Virgin Atlantic, Virgin Air and such like to fly twice, or three times or as many times as they could comfortably afford.
An example will be the British Airways that has eight flights a day to New York from Heathrow alone.
There are eight flights a day in British airway to New York and we have one. Now, they have eight flights in a day for just British Airways alone to New York and we have one. In other words, if the Airway feels their flight from London to New York is more, they will reduce the price of their ticket to make sure they fill their slot.
I think with great supply, you might find that the price of the ticket will drop. What will that mean? The price of ticket dropping to the general public in Nigeria means that people can afford to fly more for holidays and business purpose and vice versa.
So, I think it will grow your economy as well because all the airlines flying more will mean more businesses for our hotels, it will mean more landing fees for the airport authorities and of course, those of us operating in-flight catering services will be providing more food.
So generally, the economy will gear up. I don’t believe we should restrict them. We should encourage more flights because I think an average Nigerian will benefit from it rather than saying we should restrict the flights to protect the few airlines we have at the expense of majority of people in this country.
I think it is going to rev up the aviation sector two, three, four folds if you are to open it up more. We are a large nation in Africa as you know; more populous and we are also the second richest nation. We are also geographically blessed. We probably have the best position than any other African country because of our geographical location vis-a viz Europe, North and South America and possibly in the middle east.
We have shorter distance to all of these destinations and in most cases, half the distance and therefore a lot cheaper. So, we have all the advantages, but we are not taking it. So, we should really be the number one destination in Africa but to do that, we need to develop our airports as well.
That should be in our 30 years plan; having long range plan that we have studied and have talked to international airlines; we have talked to everybody in the industry and not just doing it in isolation. We have asked the airlines what their requirements are and what they feel their demands will be over the next five, ten to thirty years period.
Another area I think we really need to consider is our airports generally. Several years ago, the government employed the IFC to do a study on how to commercialize our airports. They came up with a plan; a blue print which involves the commercialization and privatization of our airports.