By Kenneth Ehigiator

Recently, the nation’s aviation industry was thrown into confusion, following self-grounding of operations by Arik Air, informed by the picketing of the airline by unions in the industry over debts owed agencies, including the Federal Airports Authority of Nigeria (FAAN) and Nigerian Airspace Management Agency (NAMA), amongst others.

The question is why should aviation ground to a halt simply because an airline refused to fly? The answer is simple: Arik Air has the largest fleet size in the country today, with over 30 aircraft of various sizes and range and operates no less than 126 flights within the country.

No other airline offers anything close to this. The situation was not helped by the disappearance of Dana Air, following its recent crash, and complementary efforts of Aero and IRS, the only other surviving airlines, were just not enough to meet with the volume of passenger traffic during the period.

The issue of airlines’ debts to aviation parastatals had been a thorny one which nobody had been able to address until things came to an head penultimate week. Agencies such as FAAN, which owns and maintains airports across the country; NAMA, which provides all navigational facilities for safe flights, have often raised alarms over the crippling effects airlines’ debts posed to their capacities to provide and maintain requisite facilities at the nation’s airports.

Not even the regulatory agency, the Nigerian Civil Aviation Authority, NCAA, is spared of this, as the five per cent passengers service charge (PSC) airlines collect on behalf of the agency is often not remitted. On the last count, FAAN alone laid claims to over N7.1 billion debt owed it by domestic airlines operating in the country.

It does appear that only domestic carriers are involved in this debt trap, since none of the service-providing agency is yet to raise a similar outcry against foreign airlines over refusal to pay for services rendered to them.

Unlike Nigeria Airways, the nation’s liquidated national carrier, which was set up by the federal government largely to provide social service for purposes of national prestige, all domestic airlines currently flying in the country are privately-owned and are, therefore, profit-driven.

In other words, the airlines were established by their owners to make profit. It does become very strange why airlines which are not offering free services to Nigerians would refuse to pay for services rendered to them by aviation agencies. It should be noted that in other climes, airlines offer, for example, complementary tickets to media practitioners, especially those in the aviation sector, to enable them move around to cover the industry effectively and efficiently.

Same practice had been extended to Nigeria by airlines operating into the country. But most Nigerian airlines have, as a policy, not to grant free or rebate tickets to anyone, all in the bid to maximise revenue, so why should such airlines want to use facilities provided at airports for free?

Stella Oduah, Aviation Minister

It is also important to state that debts have a negative bearing on safety, the hallmark of aviation practice. It is common knowledge that  the agencies would only be able to provide facilities for  seamless  flight operations by airlines, if they have the necessary funds to do so.

The Nigerian case is even more dire. Virtually all the agencies are at present self-subventing and getting virtually nothing from the federal government in terms of revenue allocation. Where there are interventions by government, such assistance take time to materialise because of bureaucratic bottlenecks.

In the days government made budgetary allocations to aviation agencies, funds were not made available until the third or last quarter of the year. Consequently, things were going wrong at airports, that was when much of the rots in the industry set in.

Therefore, the agencies need money generated from services provided to airlines to maintain and provide more facilities. Airlines make more money when facilities at airports are up to date. The importance of modern facilities at airports cannot be over-emphasised. Perhaps, the Sosoliso and ADC plane crashes in Port Harcourt and Abuja respectively could have been averted if both airports had such facilities as Anti-Windshear device and Doppler Radar.

Preliminary reports of investigations into both accidents revealed that they were caused by Windshear. It is, however, comforting to note that such facilities had been installed in the nation’s international airports. Other airports in the country need same equipment if accident related to weather are to be staved off, but this requires funds, and it is the reason the present situation of debts accumulation by airlines is inimical to safety.

The situation has also brought to focus the fact that the regulatory agencies have not done enough of economic audit. Safety audit without corresponding economic audit amounts to nothing. This is because an airline that is not able to meet its obligations to creditors, service providers and staff is an accident waiting to happen.

If airlines were being grounded for failure to pay for services, they would be careful not to accumulate debt. It is interesting to note that Nigerian airlines which operate services into other countries pay for services rendered to them in those countries, including ground rent, parking and landing charges, navigational and other charges. Why are they not disposed to paying here?

On occasions when Nigerian carriers defaulted in their payments abroad, they were not only grounded by aviation regulators of those countries but also had their aircraft seized. Liquidated Nigeria Airways, Bellview etc, for instance, had had their operations grounded outside the country for failure to pay for services. Government has not also demonstrated sufficient will to do aviation business in the country the way it is done in other climes. Aviation is an international business and has no Nigerian type.

Could the grounding of commercial airline services, which kept passengers stranded at airports across the country have been avoided? The answer simply is yes. If Nigeria had a national carrier, no airline could have held the nation to ransom.

At the time Nigeria Airways was liquidated, President Olusegun Obasanjo’s administration had the option of injecting funds into it and privatising it, as advised by the International Finance Corporation, IFC, an agency of the World Bank, but the government chose to do things differently. That led to the death of the airline.

Same model was recommended for South African Airways, SAA, which, at the time, had a similar problem with Nigeria Airways. The South African government did the needful and today, SAA has bounced back to life. Local airlines in the country have not shown that they can rise beyond the personal egos of their owners.

Besides, most of them are beset by management problems as they are not properly managed. Non of the private airline owner in the country today wants to hear of the phrase merger, which is the direction every airline in the world is heading currently. This is where government’s decision to float a new national carrier comes as a saving grace, if the process would be properly followed through.

It is not true that airlines floated by governments don’t do well, after all the best airlines on the continent at present are owned by governments, including Ethiopia Airlines, Kenya Airways, South African Airways, Egypt Air, Air Maroc. Though owned by governments, the airlines are privately-managed, with very strong corporate governance to checkmate corruption, which is, of course, the bane of Nigeria’s development in all sectors.

The federal government could do same. More instructive is the case of Emirates Airlines which, though owned by the government of Dubai in United Arab Emirate, had been declaring millions of Dollars annually in profit to its government. The government does not know how the airline is managed but simply waits for its dividends which comes in annually.

Therefore, to avert a recurrence of the incident of penultimate week, government needs to fast-track the process of floating a new national carrier and save Nigerian air travellers the trauma of being held by the jugular by a near private monopoly. If Arik can build itself to be a massive carrier it is today in just five years, government can with its resources achieve same in a shorter period.