Sirika: FG Will Not Allow Unhealthy Airlines to Operate in Nigeria Again
Upon his appointment, the Minister of Aviation, Senator Hadi Sirika came up with a road map, which include; the establishment of national carrier, a leasing company, maintenance facility, aviation university and concession of major airports in the country. In this exclusive interview with Chinedu Eze, the Minister gave update on the roadmap and deliberated on other issues in the aviation industry, including investment in airspace management and other areas in the sector. Excerpts
What is your overview of the industry with the contribution of your administration so far?
Well, thank you very much for the question, but that is extremely broad question, but I will try to answer it, as briefly as I can and try to touch on all the issues that would come to my mind. First and foremost, of course, I will start from the end that aviation has grown during the time of this government from 2015 to date.
Growth is in many forms. For example, when we started, there was hardly any competent catering company that was well established in the country. There were quite a few but they were not as robust as they are now. We have grown the passenger numbers from eight million to 18 million in four years. We became the fastest growing sector of the Nigerian economy before COVID-19. And even with COVID-19 we are still the third fastest growing sector with about 33.5 per cent.
Generally, there is huge improvement in aviation activity within the country. There are more airlines now than they were before. There are more aircraft that are in the country now than before. There are more businesses springing up in civil aviation. There are more people trained in aviation at the moment. There are more airports being built than before. So the sector is exploding, if you like.
So this is growth in real terms. And for the first time we have increased contribution to GDP from 0.42 per cent to 0.6 per cent. We have a roadmap that we are driving in this administration, and the roadmap is in components and they intertwine with each other. We have the national carrier for example; we have the Maintenance Repair and Overhaul (MRO) facility. We have the aviation leasing company. We have the Aerospace and Aviation University. We have the cargo terminals that we are developing in all the airports and so on and so forth.
Each and every single one of these is intertwined with the other. Example, the MRO is dependent upon the feedstock, which is the airline and the airline is being established, plus several other airlines that are within the country. Then, of course, the airline will depend on the MRO itself and leasing company will provide funds and equipment at cheaper rate, affordable rates than before. And then the export also will support the business. All of these will be happening within the free zones of our five airports.
Federal government has developed and approved those airports to be free zones. And that speaks volumes as to the capacity of business that we will do. During our time, for example, we have made it possible that airplanes and spare parts, attracts zero duty and zero VAT. This is a contribution also to the business because our understanding is that we should develop all of this and help businesses to grow so that they can provide the service that is needed and also to employ our people. We are doing the construction or we are putting together the concession of the airports, and it has gone very far. So all these are within the context of the roadmap. So an overview for me is to say that yes, we have developed policies and programs of government that has resulted in an increase and making the sector to be the fastest growing in the Nigerian economy, which is a plus on us.
You have really advanced in all the roadmap and your plans for the industry. However, there are some still left to be done, do you believe you will accomplish them before 2023?
Absolutely, this is because currently if I take them one by one, we have the approval for the Aerospace and Aviation University by the National Universities Commission (NUC). We are putting things together for its kicking off. We found a temporary place for it. We are on our way to getting the first set of students to be admitted this season. So that is in place. The MRO and the leasing company, already they have done their outline business case (OBC). We have gone to market; we have selected partners. We have found people that have invested in it and it is going to start and then the full OBC is going to FEC (Federal Executive Council) to get approved.
So we hope that in the first quarter of next year, the MRO and the leasing company will start. The airline also the OBC has been approved. I will put it together before the end of second quarter next year. It will also be in place. So everything is happening at the same time. You know, it takes a long time to plan so that you once you start running, the whole programs will sustain themselves running. So, I believe that before the life of this government, everything will be in place. Don’t forget, most of the things that we do in aviation is from the Ministry. Passengers do not see most of the things that we do. What worries the passenger is to have functional airport terminal, the air conditioning, the toilet and the lift, and so on and so forth. Those are very, very important because they provide the conducive environment for our passengers, our customers. So that we make their travel easy and nice experience; so they come back.
But what is far more important than those nice things is that you know, how safe and secured when you depart point A and arrived at point B and everything in between. This is our main focus. So our main focus is the safety, the security, the efficiency of the sector, the sector must be very efficient in such a way that time is not wasted for the customer, for the passenger and also the man doing business, the owner of the airline also saves money, which means saved time, which means money. So all those things that happen from point, A to B, say from Port Harcourt to Lagos, or Lagos to Abuja or Lagos to London. So, all the things that will happen from takeoff to landing, how safe, how secure, how efficient you are is what worries us and everything that happen in between. So, the equipment we will put there is to ensure this happens, the systems, the programs, the policies are things that the passengers don’t see but they are extremely very important and more important.
So, what I am saying is that these things takes time to plan and everything that is going to be good you don’t rush it. You carefully plan it because it is there to stay. And there is a system, most of these things are being done under public private partnerships (PPP) and there is a whole agency that is responsible, which is ICRC (Infrastructure Concession Regulatory Commission). So there is an act in the National Assembly driving all of these. And we are diligently following those so we don’t go wrong.
And of course, you know, that in this sector things have changed from what they were twenty years ago. The types of aircraft being produced currently are those aircraft that are eco-friendly. And then the entire sector also is turning green. And Nigeria is participating, big deal in all of those items. And I believe that we are doing very well in that sector. That I can take also in our next interview to explain to you, what we are doing in that regard, but to say that we have now put things in place. The new Civil Aviation Act is before the National Assembly. It has gone through the first reading, the second reading and the final third reading is going to happen within the month of December or even in this November. And once the act comes out, new policies will be driven from the Act and the whole thing will change.
We have new management in place in NCAA, in some of the parastatals and they are doing a great job and everything is changing. Just recently, last week at FEC, new software made by MPT is being procured and that will change and make everything to be digital and electronic, all the processes and the systems of NCAA.
Industrial stakeholders point out two issues about the national carrier plan, they observed that the 5 per cent equity of the federal government means that it will undertake the liabilities of the new airline and there is fear that the National Assembly can raise government shareholding anytime. Do you have clauses that can forestall such from happening?
No, first of all, you should understand that this is a fully private sector driven airline. The only reason why we have government in there is so that government will initiate the game and provide the necessary sovereign shoulder on which this airline will lean on and boost investor confidence. But federal government will not have any single control of the management of this airline. So it is a fully private sector driven airline. And there is no step in rights by government and government will have will zero management control. The 5 per cent that is reserved for government, it can take that five percent at any time she wishes. If government decided to delay taking it, they have five per cent; they delay, at whatever price that the company places on it in future, is what government will pay. If they pay today, they pay at the price of 5 per cent of today. If they delay till tomorrow, they pay the five per cent of tomorrow’s price. And so, it is a company.
Can you throw more light on the strategic equity Partners, which will have controlling share of 49 per cent?
Well, they don’t have controlling shares. 51% that belong to Nigeria is the controlling share, but the 49 percent will belong to the equity partner or equity partners. Strategic equity Partners will happen when we go to the next phase, which is the procurement phase. We will issue a request for proposals within the next one or two weeks. And in those requests for proposals, the strategic equity partner will be spelt out. And then they will have their 49 per cent. We evaluate and we choose the best.
What will be the operation level or collaboration level Aerospace and Aviation University and Nigerian College of Aviation Technology (NCAT)?
They are two different institutions and they are structured differently and set up differently. The university is to go into pure research and development and also the growth of necessary manpower to drive civil aviation in Nigeria at that level. While NCAT is a kind of a skill acquisition center, the engineers, the pilots, the cabin crew, the air traffic controllers, and all of those are being trained primarily ab initio from NCAT. So they are two different institutions, while one is a training institution for skill acquisition to give people licensing, to license them, to be able to carry out a certain function. For example, you are licensed to fly an aeroplane. You are licensed as an engineer to stamp your authority on a maintenance that is carried out on an airplane or you licensed to be an air traffic controller. This is what Zaria is doing. While the university is full-fledge university to develop future leaders, managers and thinkers that are going to go into research and development in not only aviation, but including aerospace. And there is no such a university in Africa. That is why the African Aviation and Aerospace University of Nigeria is being established. So, I think it is very different. So, the correlation between the two institutions, as spelt, one is a university, as with the core competence of aerospace, and aviation research and development, and then management skill; while NCAT will continue to serve as a center that will train people to acquire skills and become aviators.
Air traffic controllers and others at the Nigerian Airspace Management Agency are looking forward to your intervention on TRACON. What are the things you set out to do to upgrade the equipment?
Well, maybe perhaps you missed the news. We have approved recently about the N13 billion to continue with the TRACON process and we are taking it in phases. I am sure we have spent quite large sums of money in continuing with the TRACON process. And it is on course, if you follow up all the FEC approvals that we have been getting to drive this TRACON then, you know, that we are on our way to ensuring that it happens and it is completed and it is sustainable.
When do you think Nigerians will be flying and landing normally under the harmattan haze?
Recently we have acquired some equipment that will help in landing in reduced visibility. So, 13 airports are being equipped with Category 3 Instrument Landing System (ILS). Category 3 Instrument Landing System means that you can land with zero, zero visibility. Meaning that even blindfolded, you can put down the airplane. But you see on this, I had during a conference with the air traffic controllers, I had highlighted more on this. It takes the two to tango. We will provide the equipment, but the airlines also must train their pilots to be able to use that Category 3. That is number one, number two, they also have to have inside the airplane corresponding equipment that can interpret the signals being sent by the ground equipment that we have installed on the ILS.
So the operator, let’s say Max Air or Air Peace, they must have in their airplane the instrument that would interpret the equipment signal that they are receiving for the Category 3. And they also have to train their pilots. So we have provided the equipment. It remains the airline to train their pilots and to put the equipment inside their airplane. So you can actually land in reduced visibility, in zero visibility in Nigeria.
And then, of course, you know, once you train the pilot, he also needs to go for is currency training, which happens every six months to ensure that he is proficient every time to fly this Category 3 ILS. But let me make this point very clear to you,
which I said the other day. If you are an operator, you will be faced with choice. You will be faced with economies of scale. One, you will say, okay the weather gets so bad in Kano, Abuja, Katsina, Sokoto, Maiduguri, and Yola, and Jos. These are the most notorious airports around Nigeria. And it happens, only maybe maximum of 10 days in 365 days.
So what I am saying is that the operator will be faced with economies of scale. He would see that maybe it is only about 10 days to maximum 14 days in a year that the visibility gets so bad. And then he will say to himself, okay I have 10 airplanes. If I have to equip all these 10 airplanes with the equipment, train the pilots to fly Category 3, keep them current and proficient, it will cost me X amount. In those 14 days, how many times am I going to attempt to enter Kano in daytime in reduced visibility? Then some of them will take the option of losing that 14-day market because it pays them more doing. I am saying it from practical experience. We try to enforce it on them and, you know there is no compulsion in this; it is the style and choice of business. So, what is important for government is to provide the equipment and if the operator feels so he installs on his equipment.
We cannot force him to put the equipment in his aircraft because it is not a safety critical. Well, yes, if he doesn’t fly in there it is not critical. But if he flies in there, then we will insist that he puts it in his aircraft. So that you won’t say okay, well, I was flying Max Air the other day, they delayed until night because they want to use the runway lights, because they cannot come in during reduced visibility. So it is to tell you that perhaps Max Air does not have that equipment in their aircraft or they don’t have a competent pilot. But so long as you want to operate in bad weather condition, in reduced visibility; your pilots must be able to have the competency to fly Category 3 and the aircraft must have the equipment on board.
Airline operators, and interest groups in industry are really in support of the plan to concession major airports in the country because they want better infrastructure at the airports. Have they openly supported you and how would you rate their support?
Well, I would say that they have given their support. And I would say also they are happy because the meaning of concession is that you are going to have new businesses, new way of doing business, better service, better airport environment and so on so forth in private hands. So ease of doing business will be tremendously improved and that is what entrepreneurs are looking for. All those entrepreneurs around the airport they suffer from so much bureaucracy of government that is slowing down their performances. So if we handover the airport to private sector who are driven by quality of service delivery, then it will be the better for all. And we have seen it in the seaport where efficiency has improved by over 3,000 percent. So I think they have given their support maximally and I think they will continue to give us support.
What is your reaction to the fact that after your encouragement, Nigerian Airlines have started acquiring brand new aircraft?
Well, our job or my job as a Minister is to continue to lead the industry and give the necessary advice and support so that they will continue to provide the services we need and to employ our people. That is the primary purpose of being a Minister and leading the policies of civil aviation in the country. So having said that, I truly believe that those that took to our advice would have seen the benefits and those that didn’t would have seen the consequences of ignoring advice. So we are here to guide them.
We are here to set the framework. We are here to create the policy to make them understand and see how things could be done. And so they improve their own efficiency and service delivery. I know of an airline that initially when we insisted that they must bring newer airplanes because it is more efficient for them. The direct operation cost of the airline would be much lower and the maintenance will be much lower on and so forth. They thought that we are being vindictive but later when they took to our advice, they wrote us a letter addressed to me personally, saying, Honourable Minster, We think that when we came in you did not like us.