ALIGBE: NIGERIA’S AVIATION CAN’T DEVELOP WITHOUT NATIONAL CARRIER

It is going to be a combination of citizen equity, foreign investor and state equity holding. It is a national carrier. There is no strong airline in Africa that is not a national carrier; there is none. It is either 100 per cent equity ownership, either a combination of state equity and citizen equity. These are the models in Africa. So there are three models of national flag carrier, if you want to call it that way. National flag carrier, full citizen ownership, it doesn’t exist in Africa. Full state ownership they exist in Africa, at least three major ones--South Africa Airways, Ethiopian Airlines and Egypt Air.

Then there is a combination of state and citizen equity, Kenyan Airways exemplifies that. And that is where Nigeria should go. We do not have the discipline for full state equity holding or even a high percentage of state equity holding, we don’t have the discipline. We have tried that model it failed; we should take the model that is current; that is one. Secondly, people who talk that there should be no national carrier, were talking about hub, check worldwide there is no hub anywhere in the world that was developed by flag carriers. I have given you the American experience it is a different thing. Look at all other models, all the hubs are created by the national flag carriers. And there is no other very well-known global flag carrier except Virgin Atlantic.

Let them judge the success of Virgin Atlantic. Let them also judge the success of such national carriers like Singapore Airlines which is state equity holding. Look at Cathay Pacific, look at Quantas Airways; they are all national flag carriers. And there was a time Australia sold part of its equity but in Sydney 2000 when we went for the International Air Transport Association (IATA) meeting, they presented a paper that privatisation is not a sin qua none to profitability. They took back their equity, go and check Quanta Australia and check Virgin Australia, they took back a lot of the equity on that. So those people that are talking I wonder what they are talking about. Losing the Hub

Now, we are talking about hub, unless and unless we have national flag carrier, we will never develop a hub in our country. And the danger is that Ghana is trying to do its own, it is already working on its own new national carrier. They are at our back door. Emirate is in Angola, it has written agreement with Angola to develop a new terminal that will be a hub. If it develops that and with what Ghana is doing, we can’t create a hub. We will not be able to create a successful hub; yet we are best positioned to create that hub.

Look at what is happening to the Yamoussoukro Declaration, which is open skies for African airlines; Nigeria in fact endorsed it at the last Transport Ministers meeting in Abuja that Yamoussoukro should come into place. So we are driving it, if we open up the skies here in Nigeria, we are a finished people, we have nothing to reciprocate. All our African airlines will clean us off which is happening today. Ethiopia is everywhere in Nigeria and then South Africa Airways will fly to anywhere. What domestic airline do we have that can respond? None of them is responding now; what will be their growth rate?

That is one. Again look at this situation of employment, we have over 500 young pilots and engineers looking for employment, they cannot get employment. On the one hand Airline Operators of Nigeria (AON) will complain about this situation yet they will say don’t bring in a national carrier. They cannot employ them; they want foreign airlines to start employing them. No foreign airline will employ your pilots, your engineers. Apart from that; many of them have employment policies dictated by their unions apart from that fact they have their own challenges. They establish their airline for their own interest not for us who have refused to see our interest. And so we sit down, we are crying every day that there are many unemployed pilots, government should take action to make sure that these pilots are employed.

You cannot force any foreign airline to employ any Nigerian pilot. Even Nigerian airlines are not employing them the way they should employ them. And many people are being trained under the Niger Delta amnesty arrangement. There are pilots, there are engineers and there are technicians and all sort, they will soon come. In the next three years we will have over a 1000 of these people floating without jobs and they were militants when they had no skills, when now becomes skilled and they have no jobs, they will return to what they were and become much more dangerous when you leave such people unemployed. And then we as a nation would have wasted the billions of naira we spent trying to rehabilitate them to take them out of the situation that made them militants.

And so the need for a new, very strong, national flag carrier or even two national flag carriers is so urgent. The concept of a nation is the ownership, once you remove that ownership when it becomes private ownership is a flag carrier and there is no sovereign cover. If you touch British Airways today the British government will bring its full weight of their diplomatic relationship on you. They will not do that with Virgin. So that is the difference, and so people who are talking about it they don’t know the kind of loses we are incurring. Capital flight from the year 2000, 2002 moved $600 million; today it is about $1.6 billion. In the next three, four years or five years if we don’t do anything capital flight will be over $2 billion in the airline sub sector alone. Open Skies

The world is moving away from Bilateral Air Service Agreements (BASAs). They don’t want bilateral agreements again. What they want is open skies and we cannot go back and we are in a position to explore this fully if we can establish the appropriate carriers that we need to benefit from this. That is why it should be one of the urgent things that the government should do, but in doing it they should do it well. It must be well done; they should avoid what was done with Virgin Nigeria where you leave a foreign partner to set every standard, decide how your airline should be and decide what the road map is.

There was no Nigerian input in the formation and gestation of Virgin Nigeria. No country ever does that, even if you are taking foreign technical partners as start-up management, you need to have your people to set the rules. That is what is happening in the oil rich Middle East. They are in control, they know where they want to go to, they hire the managers, they pay them good money but the manager will do what they want them to do because they have a destination and they are watching it because they are the indigenes of the place. Whether it is Saudi Arabia, Qatar, United Arab Emirates (UAE), they are in control of it and they draw the roadmap and they use it achieve those objectives for business, tourism and for whatever.

They draw it out and then they get very high technical and efficient people to manage the business. So the question of saying Nigeria should manage, we should accept that we have been left behind, too many years behind. So we need to get the right people to set it up as start-up partnership. And it had better be an airline company because there is so much benefit to be drawn from such airline company. That was what the post-apartheid South Africa did. When they came out of apartheid they knew apartheid left them behind. They went and hired a team from US Airways who turned South African Airways five times over in terms of profitability, stayed there for five, six years before leaving.

So Nigeria should be able to say look, this is the situation and this is what it should be. I read your interview where my friend said that Ethiopian Airline is a different thing; that they are a socialist state. Ethiopian Airlines was setup with the assistance of TWA (Trans World Airlines) from the US. And it was setup under a capitalist Ethiopia, under Hail Selassie when America was there greatest ally. TWA wanted to do that in Nigeria but then Nigeria Challenge of Aviation Fuel Supply

I think that it is a shame that for over two decades, the pipeline that carries aviation fuel from the Warri refinery into the airports had broken down and government was unable to repair it. And Warri refinery also broke down in terms of refining Jet A1 (aviation fuel). So what happened now Jet A1 is imported and when they are imported they have to be trucked. I have never seen any country, any serious country where we truck fuel to the airport. I have never seen any serious country where such number of fuel trucks, such as we have, is parked. With some sheer luck I have been exposed, I have been in the industry, I have to travel over 48 airports globally and in over about 33 countries, I have never seen such a thing.

Ours is terrible. So what should happen is that they should a focus on restoring this pipeline immediately. Even if you want to do it on a public, private partnership (PPP), it will benefit the airlines, all the tankers will go away and the airlines will operate much, more efficiently. You know sometimes I pity Arik. Arik because it has four international flights in the morning, for each of their A340 they need three to four tankers to fill the aircraft for them to operate. So in the morning about 16 tankers must head to the airport for this purpose. And Arik has about 150 departures daily; they need other tankers to fill these. So sometimes they have these delays, I am not saying that is the sole cause of their delays. So they have these delays, Oshodi Apapa expressway is a mess; before the tankers get here the flight is delayed. And they cannot move without aviation fuel, so what we need to do in our country to sanitise the airport to begin to operate efficiently; to help the airlines reduce the cost they are bearing is to repair that pipeline even if it is on a PPP. We should do it, it is as urgent to anything that we can do to help the airlines. Establishing MRO

You cannot have an MRO without a national carrier. An MRO depends on the existence of aircraft fleet to be profitable. How many aircraft do we have here that can sustain an MRO? Maybe an MRO that deals on 737, how many of them do we have here? The MRO will close sooner than later or become highly expensive. There is need to establish an MRO in West Africa but what do you have in the West African region? An MRO that cannot have annually over 60 aircraft to maintain is not likely to make it. They will become more expensive for those aircraft to be maintained. So you will look at the possibilities, the developments that are coming. It is better for us to be able to maintain an aircraft at home or within the West Africa sub region.

We can have it in Nigeria because we have the population; we have the location, and the manpower, so we are likely to generate the manpower of an MRO faster than in any other place. But having said that, MRO must be able to say look, these are the possibilities I have and if I have these possibilities I am likely to be able to be competitive and profitable. If we have a national carrier, airlines can do their A and B checks. In Nigerian Airways we had got to C and almost D check but not to D checks in 737. We could do some checks but there were issues we couldn’t handle like corrosion and some other things we could not handle.

It was the way Ethiopia started but Ethiopia established themselves and from there they started maintaining for third parties. It was for their aircraft but now they are a major maintenance yard for third parties. And so we need to make sure that such an MRO will survive and will be competitive and profitable. We are in a position to do that but it is something that will not come immediately. A lot of feasibility studies, a lot of process in development and I believe sincerely that when we setup our own national flag carrier, the MRO at least will begin to look at that and say yes I can have this as a customer, that is what I think.