MONDAYBUSINESS CEO INTERVIEW Investors deserve respects from public servants, officials – Air Peace CEO
Barr. Allen Onyema, is the Chairman of Air Peace, the biggest local carrier, in this interview he speaks on the challenges confronting airline operators in the country and why the expected changes by the Buhari-led administration are yet to be seen in the sector.
WPeace? hat is your evaluation of the Nigerian travel market visa-vis the performance of Air
The aviation industry in Nigeria is not at the level we expected it to be, but it is still growing. There is a lot of improvement needed in the industry. When I was coming in, I was warned about the harsh environment under which Nigerian airlines were operating. I dismissed such warnings with a wave of the hand, but now I have seen it all.
Air Peace will be three years on October 24 this year. In less than three years I have received my own baptism of fire. I have gone to the school of Nigerian aviation, I have seen it all and I make bold to say that there is a lot to be desired. However, Air Peace, as I promised during our launching on October 21 in 2014, was coming to revolutionise the way scheduled flight operation is done in the country. We have lived up to that promise.
From the depletion of operational aircraft and the suspension of services by some airlines, it is very evident that if Air Peace had not come at the time it did, one wonders what would have been happening in scheduled operations today. Our coming helped to sustain competitive fares in the domestic travel market. We have contributed our quota to the economic development of this nation and we are proud of what we have been able to achieve as an airline.
We have caused a lot of changes in the aviation industry; we brought with us on-time departure that was lacking before we came in. We provided several frequencies right from the first day. It was the first time an airline will be doing 14 flights on their first day of operation. We opened up five different stations the same day. So we took the bull by the horns right from day one and we have never looked back. So, to a large extent, Air Peace has contributed in changing the face of aviation in Nigeria.
What is your fleet size now and what is your plan for expansion?
We started with seven aircraft; four Boeing B737 and three Donnier 328 jets. Today, we have been able to acquire 15 more aircraft. So we now have a total of 22 aircraft in our fleet. So Air Peace is Nigeria’s largest carrier today fleet-wise. We have 13 Boeing B737s, six Embraer 145 regional jets and one Donnier 328 jet. We also have two Boeing777 for our international operations, which are still domiciled outside the country.
This feat could not have been achieved without the cooperation of our banks. And it is also the evidence of our integrity. If we are not effectively servicing our loans, I doubt if the banks would have been supporting us. Today Fidelity Bank has supported us massively, we are keying into United Bank for Africa (UBA) too. I am sure they will come on stream when they see what we are doing.
With your long-haul aircraft delivered, why are you not operating international services yet?
We will go into international operations very soon. We planned that we would go into international operations two years after we had started. So it was in our business plan to go international, to help conserve Nigeria’s foreign exchange and to help create Nigerian wealth for the people of Nigeria. Air Peace is not unaware of what the foreign airlines have been doing to our country. A nine-hour flight from Johannesburg to London would cost less than a six-hour flight from Lagos to London. This country has been raped; our foreign reserves have been depleted in the hands of foreign airlines. All foreign airlines are making a kill out of Nigeria because Nigerian airlines are not firmly operating international destinations.
The local carriers have complained bitterly about alleged multiple taxation. I know that the Airline Operators of Nigeria (AON) has been championing this. How far have you gone in this?
The Airline Operators of Nigeria took this matter to the then acting President, Prof. Yemi Osinbajo, and he called for a meeting and we met with him and gave him details of our grouses. And he called for an enlarged meeting of all the agencies and the Ministry of Aviation and the airline operators. We held a second meeting where we presented our issues. Osinbajo set up a committee to look at these issues and the committee is yet to meet. The committee comprises the Minister of Aviation and the agencies and maybe about three representatives from the airlines. We are yet to meet and I think from the Ministers’ office they said we shall be meeting immediately after the Sallah break. So I am sure government is trying to look into our complaints. This is because aviation has to grow in this country.
The industry is beset with a lot of problems, which we believe government will help us to tackle. There is the issue of multiple taxation; poor airport infrastructure is there, the attitude of civil servants to investment in Nigeria and to investors is also a matter that calls for concern. In Nigeria people look at the ownership of investment instead of looking at the investment and its contribution to the economy and job creation. Civil servants in government should start looking at investors as patriotic people. Anybody who looks at the investment climate in Nigeria and decides to put his money here should be respected, supported and not the other way round.
The International Air Transport Association (IATA) has recommended ways African countries can boost the aviation industry to create more jobs and generate more revenue. The organization also talked about some government policies which do not aid the growth of indigenous airlines. What do you think is the way out of these challenges as an operator?
Government must protect the investments that create and sustain jobs for the citizens. That should be the priority behind government policies. In aviation, government must ensure that local airlines are protected. Foreign airlines don’t create jobs for Nigerians; they don’t pay huge taxes that we pay; so government should encourage these indigenous companies.
A government official recently told me that allowing foreign airlines to fly to many airports as they want in the country is good for competition. That did not make sense to me because those airlines that come to Nigeria are protected by their host countries. They do not allow foreign airlines to dominate them, that is what our government should be doing for us. I don’t know why Ethiopia Airlines is being over celebrated in Nigeria. It does not do us in this country any good, we should be proud of our own. Nothing stops Ethiopian Airlines from doing code-sharing with any of our airlines like Arik and Azman. They can bring these people from wherever in the country and Ethiopian Airlines will take them from there. By so doing, you will be creating capacity for the indigenous airlines. No country anywhere in the world allows this kind of open rape of their aviation skies.
In Africa, Nigeria seems to be too liberal; allowing all airlines from the continent to come to the country. Recently our request to go to Togo was snubbed until we threatened court action. In diplomacy, there is the principle of reciprocity. So when they are harsh to us, we should also be harsh to them; in that way we would protect our own and also be respected.
When we requested to fly to Cote D’Ivoire, the Honourable Minister gave us permission but Cote d’Ivoire didn’t want us to come in until we wanted to go to court to stop them from coming into Nigeria. They quickly gave us permit but they waited for us in their country. When we went there to set up, what happened? They slammed us with about $8,000 per landing. There is no airline all over the world that can sustain such charge. That means they didn’t want us to come in, they are trying to protect theirs. So why should Nigeria allow all these foreign airlines unfettered access into our cities?
I was shocked when I read that Ethiopian Airline is trying to take over Arik, but the question is, on what basis? If you are bringing Ethiopian management to become employees of Arik, to help them run Arik here separately, the question is don’t we have enough people here to do that? The Capt. Roy Ilegbodu management is doing very well. They are trying to turn around what they met on ground. We have capable Nigerians to run Arik. We thank the government for resuscitating Arik. Roy is doing well and we don’t need any Ethiopia to come in.
In giving out management contract to Ethiopia to manage Arik, we should look at the consequence. We should not allow our country to be taken over by foreign airlines that have the sole intention to exploit our country and make profits. If Ethiopia takes over Arik Air tomorrow the economy of Ethiopia will depend on Nigeria; this is because they are going to be carting away billions of dollars to develop their own country because Nigeria is a huge market. So coming in here to buy Arik or take over Arik is not for cheap. I don’t care about how much Arik owes, if Arik owes N300 billion that is pittance to what these people are going to cart away. N300 billion is less than $1 billion, Arik is worth about $12 billion in goodwill and opportunities. Anybody coming to buy Arik should pay down about $12 billion, excluding Arik equipment; I am talking about the goodwill and opportunities.
So $12 billion should be put on the ground for Arik owner to take. This is because the next thing you will see is that they now leverage on the airline to develop international routes from Nigeria to their country’s gains. All these celebration of Ethiopia as a successful airline is because no Nigerian airline has succeeded. Most of their passengers are from Nigeria. Get good Nigerian airlines to start working tomorrow, nobody will be talking about national carrier again because they will see the failings of Ethiopian Airlines. It will go down like every other national carrier all over the world which has become a moribund idea. What Nigerian airlines need is committed support by our government.
Nigerian airlines operate under the harshest environment you can think of, but with the right support we can excel. Air Peace has shown that with doggedness, integrity, perseverance, passion and good management you can succeed. And that is what we are doing. In Air Peace we know no tribe, no religion, no race, no creed, what we know is humanity in Air Peace. And that has shown in all my employment, we have trained about 14 northern pilots in this country, we have trained Yoruba pilots, Igbo pilots, we have been employing people
all over the country. If you come to Air Peace, it is a mini Nigeria and they are all happy. So we should be supported to support our own economy. Ethiopian airlines coming here to take over Arik is not in the best interest of this country.
A stakeholder in the industry, Group Captain John Ojikutu, rtd, recently accused Nigerian airlines of refusing to pay their charges to aviation agencies despite the fact they generate so much money. How true is this?
I believe there are certain people when you notice them over time, notice the kind of thing they say over time, it becomes unnecessary to give them the kind of acknowledgment they are looking for. What Mr. Ojikutu was saying is not true; it is absurd, bizarre and unfortunate. If I fail to respond to what he was saying, because he has been saying a lot of things over time; a lot of the gullible people in the society might tend to start believing him. How I wish that he could come and we have a debate on television on issues of aviation. It is unfortunate that he belongs to that organisation called Aviation Round Table (ART) that I respect so much, that has very prominent Nigerians who know what it takes to run aviation. People like Captain Dele Ore, Capt Porbeni, Elder Gbenga Olowo.
Airline operation has so many avenues for leakages, no government can run airline very well. Me as the owner of Air Peace, not just the owner, I man the day to day running of my airline. I have not been able to stop the amount of fraud going from one end to the other because there are avenues for these, not to talk of an airline owned by government. So national carrier is a moribund idea, countries don’t do it. Nobody tells you how much South African Airways owes and it is subsidized by South Africa. It is the same with so many national carriers. Everybody is talking about Ethiopian Airlines but without government protection and support the airline cannot succeed.
But even government support is not enough. Ethiopia has other things they are doing in aviation that is giving them money. Ethiopia has a very big maintenance, overhaul and repair (MRO) facility that many airlines in Africa and Middle East go to maintain their planes. What I will advise the government to do first is that it must facilitate the establishment of a very good maintenance hangar that can do up to D-check and the whole world will be coming here to maintain their plane and we will be getting foreign exchange. Air Peace alone spends huge foreign exchange to maintain our aircraft overseas. None of our planes comes back with less than $3 million for every C-check because we are comprehensive whenever we want to do C-check.
This year alone we have sent about seven aircraft overseas for C-check; that is over $21 million from one airline alone. You could imagine if the hangar is situated in Nigeria. If this money is domiciled here and used here the amount of jobs it will create. So we need a maintenance hangar, the government can support or bring investors; not the national carrier talk.
So we need our own government to show support to us, to be proud to talk about Nigerian airlines. Let’s start talking about Nigerian airlines, let’s stop talking about Ethiopian Airlines. We have people in the north; south and every part of Nigeria that can make it happen and develop the economy of our nation. The air fares they pay within these African regions are obscene and mostly paid by Nigerians. The government is doing a lot, they have given us these rights and I thank the government for that but we have to go beyond that to make sure that these countries allow us to come in.