No Airline Can Grow without Government’s Support
Allen Onyema is a name that readily comes to mind whenever anyone mentions or discusses non-violent education of agitators in the Niger Delta as well as the successful amnesty programme of the federal government. At a time nobody could dare move near the Niger Delta creeks, he was all over the place encouraging the militants to lay down their arms. Not done, “out of sheer passion for humanity”, Onyema established an airline, covering major routes in the country and expanding to other countries. In this interview with Kunle Aderinokun and Chinedu Eze, Onyema, the chairman of Air Peace, bares his mind on issues affecting the aviation industry and specifically, the airline’s operation and he proffers solutions to the crisis bedevilling the sector. Excerpts:
Insurance, Aviation Fuel Bane of Nigerian Airlines
As the chairman of Air Peace, what is it like running an airline?
It is a very difficult business terrain. Airline business all over the world is not everybody’s call. In Nigeria over the years, airlines have come and gone. I learnt that over 50 airlines had existed here and have decided not to exist again. Out of over 50 or 70 airlines that have been established in this country only about four or five are in operation. And when you look at the health of those five, there is nothing to write home about. Could this mean that the owners of these airlines, who must have succeeded in other business endeavours, got it wrong? Could it be that they were responsible for the failure of their airlines? I think I disagree with that assumption. Inasmuch as I will accept that some of these failures could be traced to the owners, majority of them were out to do business, but some of the policies that they met on ground were not quite helpful.
So, running an airline in Nigeria is a very tough call and it is not something that gives joy to any of the operators. We operate in a very harsh environment. It takes the grace of God for some of us to continue doing what we are doing. The challenges are enormous; they are too wide and many. You don’t even know where to start from. So it is a tough one. It is a very difficult terrain.
What has been the relationship between the regulatory body and the airline?
The relationship between the aviation agencies and the airlines is that, for example, the NCAA is doing its job well. I have said it over time that, in fact, we are strictly regulated because of the tragic incidents and accidents of the past. The Nigerian Civil Aviation Authority tends to make sure that they bring up stringent measures to assure safety, which is good. But we overdo it at times – they are doing a good job when it comes to regulating the airlines, though there is still room for improvement in some areas which we have always been pointing out to them. But when it comes to their oversight function as regards the airlines, they are doing it even better than the EASA (European Aviation Safety Agency) and FAA (US Federal Aviation Administration). But because we come from this part of the world, people don’t believe that such things exist. I gave an example sometime ago about my flight having a bird strike in Kano and when my engineers got there and finished whatever they were doing – to do the test flight, NCAA insisted on being on that flight. Abroad, they don’t do that, all they need to do is for you to fill your papers to say you carried a repair on the airplane and they are satisfied with whatever must have been done.
But NCAA said no that they wanted to be onboard the aircraft to look at the parameters or the performance of the aircraft in flight. So they joined the flight, the pilot, Capt. Enahoro, took the plane into the sky and they flew with NCAA, when they were satisfied they brought the aircraft to the ground – that pleased me. The current leadership in NCAA is doing its best to make sure the airlines are up to speed in safety. Then, the other agencies too like the Federal Airports Authority of Nigeria (FAAN), they are trying. For example, the airport infrastructure is still very poor in Nigeria and that is a very huge challenge for us. When passengers complain of delayed flights, they don’t know of some of the things that contribute to these delayed flights. They think it is just the airlines. The airports should be expanded, that is the first thing we should be thinking of in this country – to expand the airport infrastructure. FAAN is limited to what they inherited except they plough back whatever they are getting from the airlines and with the help of the government and banks or the private sector to develop our airport. Airlines don’t make hubs; airports do. So it is very important that we pay serious attention to our airport’s infrastructure. The best airport in Nigeria today is MM2 which is a private terminal and that is why it is being run the way it is run. It is the best in the country. Then if you talk about infrastructure, you go to Kebbi Airport. It is one of the best in the country. The airport should be any airline’s delight.
The Nigerian Airspace Management Agency (NAMA) is trying with whatever they inherited, but we need to improve our landing aids – navigational aids – in the country so that we can even land in zero visibility. They are trying to improve the navigational aids. They need to continue doing that so that minimal weather conditions should not be our problem. The government agencies also should understand that they are providing services, some of them are acting like lords over the airlines and that shouldn’t be. In fact, I give the Minister of State for Aviation, Senator Hadi Sirika, kudos for coming up with airport concession policy. Unless we do something like private, public partnership (PPP) for our airports, we are going nowhere. So I support concession, but it must be done in such a way that it is transparent. It must be done in such a way that the current workforce is not sacrificed. I don’t want people to lose their jobs. But to say because we want to keep these jobs that we must continue the way it is going, then of course we are not going to make any improvement in this country.
So I support government’s decision to either privatise the airports or do PPP kind of arrangement. That is the only thing that can save Nigeria’s airports. The government alone cannot equip all the airports; the government alone cannot make all the airports world-class. Even abroad, governments don’t own some of these things. The government has no business actually doing core business. What government should be doing is providing enabling environment for business. So I support government’s call to privatise these airports or call for PPP to improve our airports. But to say we should leave the airport in the hands of people the way it is being run now, we will not make any progress.
In specific terms, what do you propose to get out of this crisis? To reform the aviation sector, the PPP system should be brought into aviation sector to invest, to change situations. It should not be left in the hands of the government alone. Government might not have the resources to run business. The government might not have what it takes to run business – the government all over the world; it is not only in Nigeria. What governments do is to provide enabling environment and allow investors to come in for the sector to thrive. I support government’s stand on concession even though I know the unions and other people are fighting the government. They should understand that the bigger stake is better for the entire nation. We don’t have to be selfish about it. Like I said it must be transparent. I don’t want people to lose their jobs. I am even in this business to create jobs, so they must do it in such a way that the interest of those workers is protected. But it is going to be run under a different platform so that you will understand that you don’t come to work to sit down and do things the way you like. Imagine if governments are running the banks: what do you think would have happened? Have you seen anywhere in the world where the government is running the commercial banks? It will collapse. The navigational aids also must be improved upon. A situation where our airlines are flying from 7am to 6pm in most of 90 per cent or 80 per cent of the airports is not good.
In many countries, you can easily link the aviation industry to tourism. In Nigeria, there is nothing like that. What is your opinion? Aviation is a major economic driver or should be for any country. There are so many factors that come to count why that correlation is not there between the aviation industry and the tourism industry in Nigeria. First of all, the advent of oil has destroyed everything in this country. Nigeria has not actually tried to tap its tourism potential, that is why we have neglected tourism so much and that is why we have neglected the aviation sector so much. All over the world, the government support airlines. The support is not just about giving airlines financial aids. There are so many ways to support airlines. This is because the movement of people from one place to another is very important in any economy. Our airports cannot attract tourism to this country the way they are at the moment. Our airports cannot attract that hub everybody is looking for. Nigeria can never be a hub under the present dispensation of our airport management.
Look at what Ghana is doing – that is why everybody is going there. Most foreign airlines will prefer to use their hub because you have a conducive airport environment to operate. So, until we improve our airport infrastructure, Nigeria can never be a hub for anybody. If you like, have the best airlines, Nigeria can never be a hub. And tourism begins and starts from the airport – that is your number one face to the outside world. The impression you get about Nigeria starts from the airport. If you get a bad impression it sticks and you know we don’t have good press outside Nigeria. They try to paint us black and now when people come to our airport, the first thing they see is the confirmation of that even before they now meet the good people of Nigeria. So we need to address our airports’ poor facilities. That is the most important thing to do. The government must seek ways to address the issue of improving on our airports’ infrastructure – once that is done it will attract tourism. Then the airlines – people will want to invest in the airlines business. It is not a profitable business that is why most people don’t want to go into it. It is business that you must have passion for. It is the passion that sustains you. It is not the business that sustains you. So, for someone like me, the passion and the creation of jobs, touching lives is what gives me satisfaction.
In the area of aviation fuel, what are the challenges and what are your recommendations for over coming them?
Outside Nigeria, in aviation they will tell you that all over the world aviation fuel takes 40 per cent of your income. That tells you that this is not a profitable business, if fuel takes 40 per cent. If you make N1 million today, N400,000 goes to fuel alone. You have not talked about spare parts, staffing and don’t forget this is a highly regulated industry. That will tell you that it is not a profitable venture, but it drives every economy. So they tell you that it takes 40 per cent overseas, but in