Events that Shaped Aviation Sector in 2017
Chinedu Eze writes on events that dominated the aviation industry in 2017, which may also influence activities in the sector in 2018
There was no pivotal event that characterised the aviation industry in 2017 but the industry maintained the good record of zero accident in the year. The image of the sector went a notch higher because in 2017 two Nigerian airports were certified by the Nigerian Civil Aviation Authority (NCAA) for the first time in the history of air transport in Nigeria. Similarly, the rest of commercial airlines in Nigeria obtained the International Air Transport Association (IATA) Operational Safety Audit (IOSA), while others became IATA members.
In 2017 also Nigeria hosted the International Civil Aviation Organsation (ICAO) World Aviation Forum (IWAF), the first time it was held outside Montreal, Canada, the headquarters of the world body.
But there were also issues that brought dark clouds to the industry in the outgoing year. One of such issues is the habit of arbitrary picketing airlines’ operations by labour without exhausting discussions, a trend which took ugly trend in 2017. According to industry observers, this trend may threaten the future of the sector unless such actions are stopped by government.
While the federal government would be commended by improving the sector in some ways, it failed to set up a mileage for its planned concession of airports and also did not kick-start the establishment of a national carrier, which it claimed was a key issue in its aviation policy. So 2017 ended without transcendental progress in planned airport concession or establishment of a national carrier. Not many in the industry are optimistic these will be realised in 2018, which is practically the election campaign year as election would take place early 2019.
Airport Certification
For over a decade there have been efforts to certify Nigeria’s international airports. But before they could be certified, they must meet ICAO Recommended Standard Practices. This means that the airports must have critical facilities, they must meet security and safety standard and they must enhance passenger facilitation. However, within a period of two months, NCAA certified the Murtala Muhammed International Airport (MMIA), Lagos and the Nnamdi Azikiwe International Airport, Abuja in accordance to ICAO standards.
The certification is very important for Nigeria because the International Federation of Air Line Pilots’ Associations reviews airports on a continuous basis, evaluates their safety standards in accordance with ICAO regulations, and disseminates such information to their members all over the world. It is their evaluation that determines whether commercial airlines would agree to fly to certain airports or not.
With the certification of the Lagos and Abuja airports, Nigeria’s rating has not only improved but these airports can also serve as hubs in West and Central Africa because they are the only certified airports in the sub-regions.
The Director-General of NCAA, Captain Muhtar Usman said the certification would reposition air transport to contribute more to the Gross Domestic Product(GDP) of the country because it would boost passenger movement in domestic and international destinations.
Abuja Airport Runway
What really jolted Nigeria’s aviation industry in 2017 was the closure of the runway of the Nnamdi Azikiwe International Airport, Abuja for six weeks between March and April, which prompted the federal government to upgrade the Kaduna Airport to international status and it became alternative to the Abuja airport. What was remarkable about the rehabilitation was that government kept its promise and got the runway ready before the given date.
But airlines incurred huge losses in terms of revenue; hotels in Abuja lost patronage and so do other businesses, collectively put into billions of naira. Government also spent huge resources on security, the rehabilitation of Abuja-Kaduna expressway, which was good for the country. On the flip side also, government was able to upgrade and modernise facilities at the Kaduna airport, making it one of the best airports in the country.
ICAO Confab
For the first time in the history of ICAO, the ICAO World Aviation Forum (IWAF) was held outside Montreal, Canada, the headquarters of the organisation. This was made possible by the negotiating power of the federal government, which expressed its ability to hold the conference in Abuja, the Federal Capital Territory(FCT). However, the President of ICAO Council, Dr. Bernard Aliu, who is a Nigerian, made the choice of Abuja a possibility. It could be said that IWAF was moved to his home country in his honour.
The forum witnessed the gathering of aviation experts all over the world and representatives of member states and international aviation agencies who converged on Abuja from November 20-22, 2017.
In a communiqué at the end of the conference, ICAO called for planned, strategic, consistent and long term funding of airport infrastructure in Africa in order to build capacity that would be able to process the increase in air travellers on the continent, projected to double from 120 million passengers in 2015 to 300 million by 2035.
Airport Concession
The Minister of State, Aviation, Senator Hadi Sirika said that government’s lean resources could no more support the maintenance and provision of facilities at the airports, therefore, it has decided to concession the major airports in order to attract private sector funds to maintain the airports, provide critical facilities and even modernise and expand the airports terminals. In deciding to concession these airports, the federal government has given teeth to the Public, Private Partnership (PPP) policy, which it said is the only way to effectively fund public infrastructure at a time government is recording depleting resources and cannot meet the funding of such critical facilities in addition to providing other essential and basic amenities.
But in 2017 no significant inroad was made to actualise any of these on the priority list of the federal government. The latest development was the inauguration of Transaction Advisers to oversee the actualisation of these objectives but no mileage was recorded.
National Carrier
Not much may have been achieved in the plan to establish a national carrier beyond the inauguration of Transaction Advisers. There is a new dimension to the clamour for a national carrier. And that is seeing a national airline as catalyst to the growth and development of other sectors of the economy. In this vein, the airline will not be established solely for profit but to support other sectors of the economy like tourism, manpower development, aircraft maintenance, catering, developing airports and creating a hub, while the airline is subsidized; maybe, not directly by government but from money generated by ancillary services, while government eliminates charges by the airline that could weigh it down.
But nobody is sure whether anything could be achieved under the present administration as Nigeria approaches the election year and government is yet to issue a timeline towards the actualisation of a national carrier.
Labour agitation
The agitation by the labour unions in the aviation industry took a new dimension in 2017 and pitted labour against airlines. Over the years it has become a tradition for aviation labour unions, especially the National Union of Air Transport Employees (NUATE), the National Association of Aircraft Pilots and Engineers (NAAPE) and the Air Transport Service Senior Staff Association (ATSSSAN) to disrupt the operations of airlines, when they infringe on labour issues concerning the welfare of their workers, or when the management of these airlines discourage the plans by the workers to join unions.
Although this may be in conformity with international labour laws and for many years the unions have been given the recognition due to them by the management of airlines and agencies.
But for the first time in such agitations the workers of an airline opposed the picketing of the operations of their company and at another occasion, security operatives were called in by another airline to bar the disruption of the airline’s activities by labour.
There are fears that this may permanently pit the airlines against labour, as many airlines staff has started disengaging themselves from the unions and the airlines lose huge revenues when labour forcefully close their operations, frustrating travellers in the process.
IOSA
Nigerian airlines made significant progress in 2017 as all the commercial airlines have obtained IATA Operational Audit (IOSA) certification and some of them have become full members of IATA. This is a milestone. IOSA programme is an internationally recognised and accepted evaluation system designed to assess the operational management and control systems of an airline. IOSA certification indicates that airline’s safety standard has met international standards and it can partner with any airline anywhere in the world.
This is an offshoot of the Abuja Declaration after the Ministerial Meeting of African states on aviation in 2012 and it was decided that any airline that would be certified at the end of 2017 in the continent must be IOSA certified. This was to curb incessant air accidents in the continent. Nigerian airlines have met this critical condition for being in IOSA registry.
AMCON Takeover of Arik
2017 also marked the take-over of Nigeria’s biggest carrier, Arik Air by Asset Management Corporation of Nigeria (AMCON) due to the huge debts owed it by the airline. It is generally believed that the takeover of the airline by AMCON saved it from going under and also secured over 2000 jobs that would have been lost if Arik had stopped operation. Many in the industry said that AMCON’s intervention was timely.
But the financial challenge faced by the airline, industry observers said, was caused by the crash of the value of the naira occasioned by the economic recession that reached its peak in 2016. The airline was also affected by aviation fuel scarcity that forced the airline to cancel its flights and lost millions of naira. The harsh operational environment which makes airlines with such high number of fleet to pay huge premium on insurance was also another negative factor.
Generally, many industry insiders give kudos to the Minister of State, Aviation, Senator Hadi Sirika, who in many ways, has supported Nigerian airlines, including the removal and enforcement of Customs duties on aircraft spares. Currently a committee set up by the minister is working on how to stop Nigerian airlines from paying VAT and other charges in order to make domestic carriers operate profitably.
Although 2017 was not a bad year for the aviation industry, it is hoped that 2018 would have better prospects for the industry.