Uko: Modern Airports, Maintenance Facility More Important than National Carrier

Travel expert and organiser of Akwaaba African Travel Market, Ikechi Uko, in this interview emphasises that modern airports with navigational aids will drive more economic activities make airlines more profitable. This to him should be of greater priority

At the 5th Aviation Stakeholders Forum held recently in Abuja the Minister of State, Aviation, Hadi Sirika talked about bringing back the national carrier, saying it was temporarily suspended, what is your take on it?

From the beginning when they announced it in the middle of the year, I said it was not feasible during election time knowing how vicious Nigerian election environment is. It will be difficult for the government of Nigeria to give birth to that desired airline of ours without consequences. And I will not say I was surprised when it had such a stillbirth. For me it should not be a rushed project, we have already made ourselves not look nice in the eyes of the public. So I think it is something that we should take our time, after the election, and involve all the stakeholders not calling stakeholders after the project has failed.

We should be able to involve everybody all through. It is now after the project failed that we are hearing that some stakeholders were involved, and were consulted. If everybody was consulted who were protesting when the logo was launched? It was like the whole industry was up in arms, so I would prefer that this discussion can be re-established after the elections.

The minister said some investors were willing to offer Nigeria about 30 aircraft at $300 million, but they demanded for sovereign fund to guarantee it. Even if we are going to continue with the project, do you think Nigeria can provide such sovereign fund guarantee in such short time?

I know those sovereign things are wealth owned by the whole country not just the federal government. So there has to be an involvement of the states. I think we paid for petroleum subsidy and other things from such fund. I think we shouldn’t be having these discussions now, these discussions can be held in a better atmosphere and where it is an all-inclusive situation that involves every stakeholder, the National Assembly, state governments, federal government, the labour unions, and the airline operators. The national carrier is something that is owned by everybody and meant to represent everybody, so we shouldn’t be having such a discussion in a small group. So I don’t know how it is going to work or how they are planning to pull off but I would suggest that these discussions be held after the elections, in a much more calmer and peaceful environment.

The minister also spoke about bringing everybody in and also the existing airlines to buy into the planned national carrier, but how do you see the idea of getting everybody involved?

I recently read an argument by Captain Isaac Balami, who said domestic airlines fail for two reasons, cost of aviation fuel and maintenance cost, the absence of maintenance, repair and overhaul (MRO), and that a national carrier can fund an MRO and will also get involved in the fuel argument to help reduce the cost. That when he was in Aero, Aero spent N800 million a year for fuel, meanwhile, the fuel cost was supposed to be N300 million; so N500 million would have been saved.

So for the domestic airlines, if the national carrier is the vehicle that will deliver profit if they are part of it, I think they are business people, they will want to be part of something that works. But they already have challenges and the national carrier was viewed by both outside investors and investor within the domestic airline environment as something that will be a problem or eliminate the domestic carriers. This is because it is going to have rights that will not be extended to private carriers. So if the government decides to change the game now and ask them to be part of it, these are very astute businessmen, I don’t see anybody who has survived in the airline operation in Nigeria who has not learnt business in a difficult environment, so they will know how to adapt to it. But they will need sincerity on the part of the promoters of the national carrier. Did they mean what they say? Would their fears and challenges be accommodated? Will they be given opportunities to play as major investors? Will they be given a Hobson’s choice; that it is either you accept it my way or the high way. So I think they will be open to that kind of argument. But as at now the domestic airlines are not getting good cover from the government of Nigeria. And the national airline has the chances of getting the sympathy and the attention of the federal government. So it will be in the interest of the domestic airlines to have a stake in any airline that will represent Nigeria.

The minister also said he has given designation to domestic carriers to operate international destinations and then he criticised them over their low capacity and inability to take advantage of those designations. But the domestic airlines disagreed, saying they met a lot of obstacles on the way which they urged the Nigerian government to do address. What is your take on this?

I have already indicated the fact that yes the federal government of Nigeria has done well in granting them these rights, but it shouldn’t end at the point of granting them those rights. We all remember what happened to Medview in their London flight, if it was a national carrier that had such an experience the reaction of the federal government would have been different. We have heard about the complaints of Air Peace on Cote d’lvoire, if it was a national carrier the reaction of the federal government of Nigeria would have been different. And we have also heard Air Peace threatening to go to court over Togo, if it was a national carrier, the reaction of the federal government would have been different. So I think the expectations of the domestic carriers is that the government should go further after giving us the rights, help us go further all the way down so that we are able to operate. Not just operate, but operate in a profitable manner for Nigeria because we are flying on behalf of Nigeria. So they are right in expecting more from the government. The government is also right saying we have given you this what else are you waiting for? So there needs to be a closer collaboration between these airlines and the government of Nigeria.

Why so much capital flights from Nigeria by international airlines and why is it that our fares are very high?

First of all, the supply is limited and pure economic sense means that if the supply is limited, you either increase supply or you increase prices. So you cannot ask private businessmen or private organisations to begin to depress prices when they can earn more. Once they charge within acceptable boundaries on fares you can’t accuse them of any crime. They are not over charging, they are just taking advantage of the fact that there is scarcity of these business class and first class seats. When you don’t have options, if you don’t fly these foreign airlines to those destinations who would you fly? We talk about capacity but you also need to look at the fact that most of our passengers are not well served.

There are some many connections that people cannot make. A lot of people you see flying to France or to London are connecting to places that are maybe two hours away from Lagos. But there is no local carrier that flies to those destinations. So if you are going to Libreville, or Kinshasa, Burkina Faso, Mali or Niamey that you can walk across from Sokoto or Kano, you will have to use a foreign carrier, fly to another destination before connecting these places. So our market is not well served, we cannot now deny the foreign carriers the service they provide for Nigerian travellers.

We are a 180 million people, there are less than 40 aircraft owned and flown by Nigerians. So these 40 aircraft cannot serve the needs of the Nigerian travellers. And we cannot impose this burden all on domestic carriers, I don’t know any country where domestic carriers fly all their passengers, there is none. So when people say we are giving foreign airlines right to fly, can you tell me one country that foreign airlines don’t carry passengers? All the Africans who go to China don’t fly Chinese airlines. China can start complaining tomorrow; that only non-Chinese carriers are flying but China is not complaining. They run some of the biggest airlines in the world. And those airlines carry Chinese and carry other people. I think every African that goes to China don’t fly Chinese airline, so when some people start complaining that foreign airlines come here, I think that is the problem of every country. South Africa has higher volume passengers than Nigeria, but South African Airways doesn’t have up to 70 aircraft. So South African Airways doesn’t have up to a 100 aircraft like Ethiopian airlines and they cannot carry all their passengers, they fly less than 50 destinations in Africa, they are even shrinking their operations. So there are more flights by none South African airlines to South Africa than by South African airlines. And that is the most industrialised country in Africa. So some of the things we complain about are not correct, they are emotional, understandably.

But at the same time, you cannot stop people who are providing these services. But if we start the Fly Nigerian Act which involves code share with Nigerian carriers then Nigerian airlines can start making benefits from those volumes. This is because most of those carriers will now need a partnership with a Nigeria carrier to carry Nigerian government officials.

Uko