AN OPEN LETTER TO THE INCOMING MINISTER OF AVIATION

My dear honourable minister, as I congratulate in advance of your appointment I want you to look away from those who may be debating whether or not you are the best man for the job and let us seriously get to work as there is a lot to be done.

Earlier this June we remembered families and victims of the last major accident in our airspace; pointing that our airspace has been safe to a large extent for the past three years and we passed IATA security audit of our airports. All these added to series of remodeling carried out by the last administration and the ability to retain our Category 1 FAA rating make a good foundation to build a lot of work you will need to do on.

I will like you to know that it will be very wise to make most of your policies around profitability of airlines without compromise on safety as airlines are the life-blood of any successful aviation system. Airlines support our economy by connecting people and ideas from one point to another in needed time, employing a lot of people and contributing a lot to the FG account in taxes and levies to mention a few.

Highly critical is to the operations of airlines is fuel price; airlines in Nigeria currently spend approximately 65% of their income on fueling leaving a meagre 35% to cover for all other expenditure including maintenance and overheads this is a far cry to around 35% of income airlines in the Arab gulf spend on fuelling improving airline profitability in that region and hence the great news of progress we always hear from that part of the world. While it is not wise for government to subsidise fuel price for airlines considering the state of the overall economy, my advice to you about this is to join forces with other key ministers to push for and support local refining of crude oil which will no doubt bring down the cost of Aviation fuel to our airlines, reducing their expenditure thereby helping them to do more for the better of everyone.

 According to channels television, Route development is the life-blood of the airlines, a means of promoting growth, securing profits and satisfying various constituencies. Nigeria is said to be losing over 200 billion Naira annually to international airlines that have been generously given more than enough flight rights into Nigeria at the detriment of Nigerian carriers which are left with just three per cent of the international market share.

The inability of Nigerian airlines to ply most of the routes has led to an imbalance in the over 80 Bilateral Air Services Agreement (BASA) between Nigerian and most countries. We need to start harnessing this potential and fast. My suggestions on that would be to either create incentives to assist private airlines to cover the other part of these agreements or create a national carrier for this purpose. Recently Rwandair started to operate a Lagos Dubai service dropped by Arik. I read the news and became so disturbed. People would speak to you about a national carrier all the time, please make sure it starts for the right reasons and it is run with a lot of strategy, we do not want a repeat story.

I have to let you realize if you already do not know that just before your appointment there was an ugly development; customs decided to start charging airlines duty for importing aircraft parts. Let me highlight that this duty was previously removed to help reduce the running cost of airlines as 99% of these parts are not available locally anyway and to charge them duty on these items that usually cost thousands of dollars monthly was to in fact plunge them into further debt. Honorable minister, this move will shorten the average life span of our airlines and is not good for a lot of our people, please look into this urgently.

Aviation industries develop through intentional efforts made with specific goals in mind, but I am sure you know this anyway. I want you to make intentional efforts to make aircraft parts available locally, it will require you and your office putting together a very rigorously prepared program but the good news is that it is possible; many countries in the world have done it, local Parts availability would improve the profitability of airlines and help our system. The venture is capital intensive and that is why it requires intentional support.

Finally we need MROs locally; my direct suggestion on this is for the Federal government to start one. It is a lucrative business that will create a lot of jobs and generate a lot of patronage from within Africa, most Aircrafts in Africa currently go abroad to get services that require us bringing down expertise and machinery to be able to perform here. If the federal government cannot start one, we can create incentives for private businesses to start one or enter into agreements with world class MROs to come to Nigeria.

I would be glad to see you succeed and I am very sure a lot of Nigerians want that view too.

Best Wishes.

Temitope Bolarinwa

June 25, 2015

OUR NATIONAL CARRIER

While the idea of a National Carrier is a thing of pride, some sort of legacy and a national brand, technically speaking (which is the sense in most ideas) it is not a viable venture for Nigeria, well at least not for now. So the next time someone talks about a national carrier for Nigeria, don’t just look away like it’s something related to landing on the moon or it is some far away idea. I entreat you to look closer and arm yourself with something to say.

I would seize this opportunity to give you the ABC what makes civil aviation succeed then I would pick which part of this puts a capital no as the answer to the question of a national carrier.

Airport access vis-à-vis the potency of the competition of other means of transportation is very crucial to the survival and growth of a civil aviation system. For instance if there’s rail transport between Abuja, it takes 2 hours and it costs 30% of the cost of an air ticket. Majority of passengers would definitely connect Abuja from Lagos via rail transport especially if it is easier to get to the train station than it is to get to the airport. This however is not the situation in Nigeria, there is no other means of connecting major economic hubs of the country apart from road transport which is although cheap but not comfortable and takes far too much time. Hence the Nigerian civil aviation sector seems to have an advantage, this said with emphasis on ‘seems’.

The other crucial factor that determines whether or not a civil aviation sector would fly or stay flying is the propensity to fly of the population. Yes Nigeria has 170 million plus people but the question someone planning a successful civil aviation sector should ask is ‘just how many of this people can afford to pay for a plane ticket?’ Let me help you, UN say that 70% of those 170 million lots cannot afford a dollar a day, so that leaves only 51 million people above the poverty line, this does not mean all of this people have business flying or can afford to fly. So propensity to fly really talks about how many people in Nigeria have reasons to fly and can afford it. To break it down it is not a lot.

I said in my previous article called ‘adding real value to our aviation sector’ that the average cost of a 1 hour flight in Nigeria is around N13, 000. This flight is only one way and you have to book in advance to find a ticket at this price. So comparing that with minimum wage which is currently at N18,000 we can begin to estimate how many of our population can actually afford N26,000 (cost of an advance booked return ticket), and how many times in a year they will be able to afford it. The real problem here in airline terms is traffic. The economic factors airlines have to jostle to arrive at the price of their ticket is just too dire to have the ticket price within catchment for a wide audience of passengers so we have airlines that exist carrying very weak Pax load on their flights but guess what the key to continual operation is continual operation, either its leading to a positive balance or red.

This leads me to the destination of this particular article; I struggle to understand the factors considered before allowing a new entrance by an airline into the Nigerian domestic air transport scene. So that we can all be on the same page, a national carrier is simply put an airline that is state owned and either state managed or managed privately under some agreements. This means to launch a national carrier we would have another airline join the existing ones, to compete for the passengers that they already cry aren’t enough to balance books, I do not see how smart that is. The national carrier would operate under the same economic conditions but may enjoy some subsidy from the government especially in the form of waivers on some government levies which would no doubt mean that their own ticket cost would be arrived at cheaper which gives them competitive advantage. This is a direct threat to the wellbeing of other airlines and it is so unfortunate. The idea is simple; the suppliers in any market in the world would have a short lifespan if where supply is more than demand and this is the case in the Nigerian Domestic Civil Aviation.

The only model of national carrier that seems practicable would be the one whose objective would be to be an answer to our bilateral deficiency to international routes. Usually when international airlines start to fly into a new country, the two countries by bilateral agreements arrange for an airline from country A to service the route while Country A would allow an airline from country B to service the route as well, so u can start to ask which Nigerian Airline goes to France in place of Air France or which one goes to Germany as against Lufthansa or which one goes to Holland just like KLM, yes none. So all these airlines make a lot of money that should be shared with Nigerian airlines and this really means more than airlines to Nigeria if we have an answer to this. It would mean a hub here in Nigeria, it would mean thousands of jobs, and it would mean MROs moving into the country (more jobs) as an airline that would answer such questions would have considerable fleet size. And yes, the reason Nigerian airlines cannot be this answer is that it requires a lot of funding that is not practicable for a lot of them. Arik air has tried, for many of our African routes, JFK in America, Heathrow and Dubai until recently (this is May 2015 and Rwanda air currently operates a Lagos to Dubai service, for the records that is abnormal).

We welcome a well thought properly structured and adequately managed national carrier that would be given to experienced people who have and intend to keep their integrity. Our civil aviation sector can fly to new heights if the issue of national carrier is not looked at as the solution to the real problems of this sector and is not created for the purpose of national brand or national identity alone.

Temitope Bolarinwa

May 21, 2015