Bankole: Some Governors Misplace Resources by Building Unprofitable Airports
Chief Executive Officer of MedView Airline, Alhaji Muneer Bankole is of the view that the federal government should appoint an aviator to guide the industry out of the present quagmire. He spoke to Chinedu Eze during the recent International Air Transport
What do you think about the future of the aviation industry in Africa?
I think first we should understand that there is a body that is known as African Airlines Association (AFRAA) and they need to do a lot of work. From what I have seen it has been broken into sub-regional level now, you have what we call African Airline Association of South Africa. If the whole continent, which is over 50 something countries, can be broken into sub-regional level, that will make a very good impact.
I did say that for us to meet most of these expectations in Africa, we need to bring all the leaders together, we have so much political problems which have drawn us backwards; that is our major sickness. And we have self-centred leadership where they don’t see the citizens right as their business, they just want to be there and they want to be there perpetually and that doesn’t help the growth of any business anywhere in the world.
The gulf airlines are having so much in road into Africa, why are African countries not encouraging their own?
It is one of the regrets of today, and I still feel so, to say that the Nigerian government in particular needs to do a lot. I mentioned that you have almost 27 airlines coming into Nigeria, 70 per cent of these airline are from Europe and the Middle East. There is no two ways to it, they are not bringing anything, they are taking out of our economy. I stand to be corrected, Emirates alone operates three frequencies to Nigeria daily, monthly that is about 90 flights and when you calculate it annually that is about a 1000 flights. Etihad does the same, so if you put all the other airlines together you will be seeing them taking over 6000 flights out of Nigerian economy annually with total revenue which I cannot estimate but it is close to a trillion Naira. Emirates alone gets over N60 billion of the share market in Nigeria.
So we find out that Nigerian government and African leadership need to sit together and do something to realize that we are living behind the scene, we are not there at all. If Emirates fly daily, business class ticket starts from $6000 and first class ticket goes for as far as $10,000 and economy ticket goes for $2000 to $3000. So merge everything together with full capacity they run daily, what did they give to our economy? And we have stopped the commercial rights (payment of royalties), we have stopped everything, we just opened the sky, we don’t get anything.
So what the government should do is to encourage the local carriers. And I still repeat that local carriers benefit the government because we create jobs and that reduces the problem for the government because we create jobs for them. As I am, I have over 350 employees on my payroll, bringing some people out of the streets. So what the government should ask from me, rather for government to help they are just giving double taxation. I pay to Lagos State internal revenue, pay to federal government internal revenue, pay charges everywhere. So the African airline will not grow in this environment, it is very, very difficult. The foreign carriers are buying fuel from 20 cents in some countries. These Middle East carriers are being favoured by their government. They are getting fuel at subsidised rates. Where are we? We are buying from a local marketer. You can see the game. Buying from a local marketer you are at their mercy. Two days ago they increase the price again from N130, N140, and N160.
Federal government cancelled commercial rights so foreign airlines are no more paying royalties, which means Nigeria is not earning anything from the operations of these airlines. What do you advise the government to do?
We cannot march those foreign carriers. First and foremost commercial rights are every government prerogative of business economy. Government ought to charge royalties on unreciprocated frequencies. Such monies earned ought to be ploughed back to develop the industry and also support local carriers that create jobs for the country. We need to grow our own industry, like I did say many times ago that government needs to put in something. We are not saying go and start national airline, they have no business establishing a national carrier; it should be a partnership.
If the government goes back to say I am spending the government’s money to open up a national carrier without have a strong strategic alliance with any strong airline, it is just like drawing water and putting it in a basket. For instance MedView is a private owned airline and I don’t see why we should not partner with government. Because what it takes for us to be there is that we benefitted from the resources of government to get trained and to get to where we are today. We should give it back to them and say okay we have some Nigerians who have started and doing something in a little way, we can partner with them.
You are the only Nigerian airline that attended the IATA AGM. Why are you here today?
First and foremost we are here for three missions. We are beginning to realize that aircraft manufacturers, the major aircraft leasing companies are not there in any part of our continent. So we are making a strong partnership with these people in as much as we want to drive our new generation aircraft to our new fleet. Some of our aircraft today were bought and some were leased but these are financed by our strong partners. So we have come to discuss in another environment where we say okay, you have seen it from the different story, we are Nigerians, we have got four aircraft from you, we have been able to deliver, we want to grow more. So we want to look at two other options; that is one of our major businesses here.
We have been talking to them, you can’t believe that MedView started with two and now we have five and three of these five are owned by us. And we have just got a Boeing767, already it is being painted now, it is in
we need to bring all the leaders together, we have so much political problems which have drawn us backwards; that is our major sickness
Arizona, US. This is an aircraft with world class entertainment, work on it is almost completed and our engineers are on site. We want to talk to the lessors. What modern thing do we need to talk about? We want to talk about the next plan level; that is number one. Number two is to form a strong strategic alliance with the any strong airline in any of the regions. This is because the whole world is divided but it is coming together.
Why do we have European carrier struggling to come to Nigeria and distribute passengers to every destination? The international carrier should partner with MedView to distribute these passengers to other local airports. So that is why I am here, I am trying to talk to some of them. The third reason we are here is to secure a very professional advice in other financial ways of growing the industry because we don’t have that strong financial base out there. If you go to Nigerian bank to secure credit facility the least you can get starts from 18 per cent interest rate up to 26 per cent. How do you grow such industry? So those are the three major things that drove us here. We have been talking to them and we are looking at those areas. And again to seize this opportunity to wish IATA well for attaining this current status and of the good things to come tomorrow and that we should be alive to see the association clock 100 years.
To move the aviation industry forward, what will you recommend to the new government in terms of making policies aimed at improving air transport in the country?
I think our government should first set out a new drive. Let’s pray for the President that he brings in technocrats on board; the person who understands the language, who understands the industry, who deals with this business that we can communicate like you and I are communicating. Except that, we will not get it right from the beginning because we had had that mistake in the past. What we have always had is somebody being appointed minister and coming from a different background with different focus and he came here to make money and get out and the consequence is that the industry will not be growing.
It is politically motivated business to say I am zoning you to South-South, I am zoning you to South-East, I am zoning you to SouthWest. The industry does not need that kind of politics. Here we need professionals who know the implication of lack of safety in the airspace. All those regional political bases have no business; that is number one mistake we have been making over the years. If I tell you since 17 years down the lane we always have this problem. So let’s pray for the government to think. Thinking is something that makes you to believe that you can do something, so let’s do that and consulting and implementing. We make a lot of noise talking; we didn’t do anything to record significant progress.
A government will come with its own aviation master plan, another one will come with aviation roadmap; everybody will come and go away. First I keep saying that IATA people, the International Civil Aviation Organisation (ICAO) people are the strong body that should be reference points if you wish to do anything today. How did this airline perform? How did this airline meet strategic alliance? How did they motivate each other? You will see history to read. We are not going there to read anything; we don’t take anything for insight. So pray for this government to have the right people to put in the right place. Two, strong alliance with any foreign partner, what they are talking about is political instability. Nobody will want to put his money where there is no safety, no security, no guarantee for your investment. So that is what we are getting now, we pray the new government understands that the whole world is focusing on us, no game of politics any more. Wherever the man comes from, we should forget about this north, south, east, west dichotomy, we should provide that material to solve that problem.
Is Medview planning to comply with safety standards of the IATA Operational Safety Audit (IOSA)?
Suffice to say that we are almost getting there. I don’t like making too much noise; we are one of the five airlines appointed by IATA to give the drive to get IOSA. We have done the three workshops, we are running along with consultants, we have done the documentation and we are in the process of implementation. We will be calling very soon for IOSA mock audit, all these is in process so, as soon as we get back I wish you will come and visit and you will see the IOSA progress going on, so we are almost there.
Without IOSA you can’t have alliance, that is the game and hopefully before the end of the year we are done. We might be calling IATA to send the IOSA team to come finally. And we give thanks to God for giving us the energy and the drive. It is not easy because you have to work in the standard of IATA, which is the IOSA laid down policy, which mandated we disclose some of our manuals and we have almost done that. The reason is to sell Nigeria on the map; that is one of the reasons I am here.
We met some top teams here and in the cause of our discussion with them they found out we are doing well. Even one airline CEO said they can’t match us, he said we are moving too fast. We told them how we started and where we are and what Nigerian market is all about and that is why we are here. It is to let you guys know that the business is in Africa even the IATA Director-General Tony Tyler agreed with me that the business is in Africa.
Unfortunately we haven’t got there but we are moving. Now they are fighting between the American and the Gulf airlines. So why are they fighting? The Gulf players want to dominate the market, because their government policies have subsidized everything for them. You can’t match their market and they are not being fair, wherever they are they want to kill the route. They will deal with you decisively and go. But when we are going to start Dubai after Hajj you are going to see a difference. We are all going there to let them know it is our home and it is our business.
Immediate past Minister of Aviation, Osita Chidoka in his farewell presentation suggested that funds could be deployed from pension fund to develop the aviation industry. What is your view on this?
First I did not want to go deeply into this. If the former minister has presented a title document and gave us the genesis of how he derived the proposal of using a pension fund then we appraise his position. Don’t forget that the pension fund came out to give a new lease of life to Nigerian pensioners who over the years have suffered greatly, which I am one of them. We serve a government for 20, 30 years, we were sent away, we have no pension, we have no gratuity and we are still running today. So what government did was that for every employer of labour you must be able to provide a certain percentage (7.5 per cent) both ways and on the other side you have to donate it to an appointed pension or insurance company.
It will sound good if it is suggested that part of that money is deployed to develop agriculture. Aviation is more complex. The government in the past had given airlines intervention fund, nobody asked questions how it was spent; that is why we find out that we are not honest and sincere people. We have had a cause to have over N100 billion intervention fund, some airlines accessed the money , they did not give account of that money and they are moving around freely and nobody asked questions. I am not saying they should crucify them but we should ask questions. It is not their money it’s our money. Ask me questions, okay you accessed N36 billion where is the money? So if you don’t give me back the money, give me the asset you have used the money to buy.
You are one of those who want a national carrier for the country. What model of airline do you want so that it will be a success story?
My brother we have said it, we need a national airline but the story should be in a different format. Government should have a minimum share, maybe 20, 30 per cent is not bad. Strategic alliance, 40 per cent local content 20 per cent alliance, I will go for it. So that everybody has something to deliver to the country. Strategic alliance is necessary because of the external support of maintenance, equipment; let them come in. That is the only way; we can’t match any of these carriers, even in local content we are supposed to merge. I have seen some of my colleagues’ running back to my destination Yola. I learnt they are coming there. I have been there alone and I survived. All I was telling them is that we have to drop passengers in Abuja then two of us will be carrying those travelling to Yola. We have to drop passengers in Kano, then three of us had to take them to Sokoto, Yola and Maiduguri, the Kano market is open. So we need to come back and make money at the centre using the IATA platform of code-sharing or interlining. I don’t need to deceive you; except some of our people realize that they can’t wash their hand along with one hand and get clean. So we should wash both hands together and get there through partnership. And that is why we are not here today.
There have been too many cancellations by domestic carriers. Some largely attribute to weather but we know some of the cancelations are due to poor logistics?
Gentlemen, there are periods in Nigeria you and I know there is this phenomenon with weather problem in some part of the country. Weather is a factor, we are now in rainy season and there are a lot of storms, you cannot deny the fact that weather is funny and this is a global environmental problem. But you owe that explanation to your client. I run this same business, I do not subscribe to a situation where somebody buys my ticket to fly Lagos-Abuja for 7am, right now I have done five flights (June 8, 2015) and they are all on time. On-time is the brand of Medview, no captain; no personnel plays around with this on-time performance, when you do you get yourself fired.
That makes everybody to sit up, the passengers have value for their money, they have other openings to go but they choose to fly with you, that is why you should be there. During the crisis period I was there 24/7, I owe passengers that duty, they bought our ticket, they are not the cause of the crisis, so it shouldn’t be there problem. It should be me who has collected their money. I had to go to Accra to go and buy fuel at 91 cent per litre, just losing money because I have to satisfy my passengers. There were some parents with children on the floor waiting to fly; I had to take fuel to Kano, to come back to Abuja and to be able to deliver passengers. That is why the passengers are still with me.
What is your projection of the future of Nigerian airlines, looking at such constraints as lack of airfield lighting at many airports and poor airport facilities?
Airports in Nigeria that are viable are not more than four or five. Most governors are not honest to their people. There are some states I visited, they don’t have anything and you are building an airport for N13 billion. Who is going to use the airport? We are full of deceit. There is Sokoto, there is Kebbi, which is just 15 minutes flight time, what do we need these airports for? You want to grow human being, who is buying something there? What do you have for me to come and buy? We paid N100, 000 for extension of time in Enugu. Why did I have to go to Enugu late? Enugu is supposed to be an international airport. For every little time I want to extend to night flight I pay. And I am not dealing with Enugu, the people should be able to understand that I am dealing with five eastern states , Abia, Anambra, everybody is aligned to this airport but when you shut me down how will the people be able to get home. And you want me to fly Enugu daily. Other than fly Enugu now I have been trying to bring Enugu in the morning that people from other region can come and take them from Enugu to Abuja or from Enugu to somewhere. This is one of our problems, you don’t close airports. Have you seen a country like Nigeria where by 6 o’clock in the evening the airport is shut down?
What is your view on privatisation of airport facilities?
It is the best choice. Let’s not negotiate it, open it to the market; open it to the world. Government in Nigerian cannot run airports efficiently; you and I know. Before the remodelling done by this past Minister we were using bucket to fetch water, is that an airport? Let’s give commendation to that woman, whether she did it half or bad way, she has changed the face of the airport in Nigeria. So let’s give that credit to her, I am not being partisan, I am not a politician. Some people come to condemn what she did that the airport is leaking, it is another story. Somebody should have taken it from where she stopped and improve on it that is what is affecting us. You came and you abandoned what somebody did and you came with your own story. What have you achieved? You came and talked story and you ran away. What did you give us? Nothing. You just brought another idea, aviation commit, this one commit, what did you commit? We just commit nothing. We should have improved on what we did before so that somebody will take off from there. People make mistakes no doubt about that; but don’t condemn. Our country is full of people who are condemning and it is taking us nowhere.