A former acting Managing Director of the Nigerian Civil Aviation Authority, Mr Benedict Adeyileka, speaks with TUNDE AJAJA on the state of the aviation industry, the new national carrier and what must be done to save the sector from its many challenges
The Nigerian aviation industry seems to be facing some of its worst moments in recent history, how did things become this bad?
I actually don’t see it that way, because whatever is happening in the aviation industry has a lot of momentum around it. The aircraft operation in its entirety is dollar-driven, and the higher the exchange rate, the higher the cost of operation, which will then impact many other things. Let’s start with aviation fuel. You cannot say fuel is expensive and then you cut corners. It is a very essential part of your operation that you cannot manage. For example, if you are to carry 10 tonnes of fuel from Lagos to Abuja, you cannot say let us use five tonnes so that we can save money. You can’t do that. Not only will you carry the 10 tonnes, you also need to carry enough fuel to your diversion airport. Does the diversion airport have fuel? If not, that means you have to carry enough fuel to take you back to Lagos. The Jet A1 forms almost 70 per cent of the cost of operation of an airline, so you see the interplay.
Many operators and stakeholders talk about the operating environment, can you speak to that?
Yes, there are several other factors, including the cost of maintenance, insurance, which is chargeable in dollars, and of course if the aircraft is on lease, you have to pay for your lease. We haven’t mentioned spare parts. There are components of the aircraft that whether you fly or not, you have to change because they are tied to a calendar time. The aircraft is such that if you park it, it costs you money; if you fly it, it costs you money. As little as the pin in the aircraft is, it is imported, and being an industry that is highly regulated, there is no room to cut corners. Pilots and engineers have to go for training, which is also done overseas. Like we say in the industry, if you think training is expensive, try accident; and if you think maintenance is expensive, try accident. On the issue of maintenance, we have to maintain the aircraft and every of its parts must work correctly, from take-off to landing, otherwise there will be a disaster. How else do you keep it going? Maintenance, which costs money. These are things airlines deal with.
The economic view is that the more the aircraft is in the air, the more money it makes, do you think the airlines prioritise this?
Yes, in our operating environment, we can argue from the economic point of view that why don’t we do more hours so we can make more money. Yes, you want to do volume, but how many airports operate 24 hours? You have Lagos, Abuja and Port Harcourt. There are some that when the sun goes down, you can’t go there anymore. Apart from that, the aircraft can break down and it needs to be fixed. Even if you have your money, you need to order the spare parts, they get shipped and when they land, you have to clear with the Customs and they may get stuck there. The Customs want you to pay duty even though the Federal Government says there is no duty. So, your aircraft remains on the ground. Insurance and other charges are rising, but you are not making revenue because you are waiting for a single spare part. The regulator cannot allow you to fly an aircraft that is faulty or unserviceable, just because Customs are sitting on your spare parts. The issues with Customs is one area I don’t want to go into now. People scream repeatedly about these things but eventually they keep quiet and move on so that they don’t lose focus.
The airline operators have asked the Federal Government to allow them to import aviation fuel, perhaps to eliminate some of the inefficiencies. Why do you think the government is reluctant to give them the licence?
I don’t have the facts, but looking at it from the operators’ point of view, I think the government should have done something about it. Like I said, Jet A1 forms almost 70 per cent of the cost of operation of an airline and you cannot afford to manage. The operators must know that they can do it before they suggest it, but it’s Nigeria. Somebody somewhere is making money, while some people are losing money. I don’t have all the facts. The oil and gas sector, like the aviation industry, is also regulated. However, I think they would have applied and let the government decide, but I don’t have the details. And in Nigeria, it is very difficult to control tankering, which is when you carry excessive fuel and you burn more fuel. You want to fly from Lagos to Jos, you look at whether there is fuel in Jos and the cost, because the cost is not the same due to the cost of transportation. If the fuel is not available there, the aircraft may have to carry enough fuel.
Since importation is part of what makes the Jet A1 expensive, do you think the cost will crash considerably when the Dangote Refinery comes on stream?
I don’t know if the difference will be considerable, but this is the way I look at it. Will Dangote be buying crude oil at the same international rate or will it be at a discounted rate? I’m asking because Dangote Refinery has a business to run. Yes, I know that the Nigerian National Petroleum Company Limited is a partner, but the company has invested a lot of money and it has to recoup its money. We don’t know what the cost of Jet A1 will be, but I know that we will eliminate the cost of refining and transportation. However, I must say that I have not got over the shock that we cannot fix our refineries. I look at the Nigerian Society of Engineers and our petroleum experts, yet we cannot get our refineries running. It’s sad that we have not developed our capacity.
If the issue of Jet A1 is not sorted out, can it make more airlines go under?
Yes, it can if they are not properly managed, and that is unfortunate. It goes beyond Jet A1, but like I said, that plays a key role.
There have been opposing views on the national carrier, Nigeria Air, which was recently set up, and some are questioning the partnership with Ethiopian Airline. What are your thoughts on this?
It doesn’t matter how I answer this question, some people tend to be dissatisfied. First, a national airline is good; let us get our pilots, engineers, commercial managers and cabin crew to fill those gaps. Let us start flying to other countries and give Emirates a run for their money. But are we really competing? What kind of aircraft are we getting? Will the airline even compete with Air Peace or Azman Air, for example? It’s a good idea, but what product are they bringing up? Meanwhile, when you say something is national, there must be national interest. The British Government will not want to have a national carrier and ask Israel or Australia to run it for them. So, I’m not in support of this arrangement (with Ethiopian Airlines). I don’t like putting my property in other peoples’ garage, if you know what I mean.
Some people have commended that option. What are your reservations?
This is my opinion. In Nigeria, we don’t like ourselves. We always want foreigners in everything we do. We should be able to source the expertise for this national carrier from within, or are we saying that we don’t have the expertise from within? We do. I’m saying this because I’m a Nigerian. If I’m Ethiopian, I will be jubilant over that arrangement. You have your own airline and I have mine operating on the same routes. I then ask you to come and be my technical partner and competitor, and you will be the one to run my airline alongside yours. Competition is good. Like I said, I support the national carrier and our domestic carriers, but I think the government should do more to support the domestic carriers to do more international flights.
If Air Peace, for example, wants to go to London, the question is, do you have an aircraft to go there? If yes, let the government give it its full support. We have British Airways and Virgin Atlantic coming to Nigeria. BA will leave Lagos for London at night, while Virgin Atlantic will leave in the morning. So, why can’t Air Peace depart to London in the morning and Azman or any other airline go in the evening so that we can have reciprocity? Why should we write to Brazil, for example, and they won’t respond to us? What is the job of our ambassadors in those countries and our foreign affairs minister? I’m saying this because the owner of Air Peace has come out to say it; what is going on? We can do better than this.
Many industry players have complained that multiple entries for foreign airlines are depriving the domestic airlines of patronage, while some see nothing wrong with it, what’s your position on this?
I hope that some people won’t come after me based on my position on this. The fact is that the interest of Nigerians must come first. Let’s look at it this way; if you say for certain flights, no flight out of Nigeria except through Lagos. That means if you are not in Lagos, you have to fly to Lagos first and if the flight gets cancelled or you miss your flight, you pay for the resultant cost. Yes, multiple entries don’t favour domestic airlines and we need to develop domestic capacity, but what about the difficulties it causes passengers? I don’t want to be misunderstood; I love local capacity to be developed, but if you live outside Abuja or Lagos, do you want to fly to Lagos before you can fly to another destination? We need to consider that too. That is why I said we should explore reciprocity.
Do you think the Federal Government has done enough to create an enabling environment for the domestic operators?
They have tried but they can do a lot more than they are doing now. All the odds seem to be against the operators.
What are the priority areas?
We need to start by stabilising the naira. That will go a long way, because the moment we boost the value of the naira against the dollar, it becomes more competitive to run. Also, people talk about Dangote. When his refinery starts refining fuel, he becomes a monopoly. Who will compete with him? It means we will buy Jet A1 at whatever price he’s giving us. I will be more comfortable if we have the refining module in Imo State. Let there be competition. Imagine what it will be like if we have only one airline in Nigeria. But you cannot compromise standards and safety.
There have been complaints about multiple charges levied on airline operators, as a former head of the major regulator, what will you say to that?
We miss the point that most of those agencies operate on internally generated revenue; so, if they don’t charge, how will they pay their staff and run their activities? I understand the point and I’m not saying everything is right, but every agency has its charges. Somebody controls flying, another controls parking, another controls the cargo area, and each of them has costs.
Given that there are many odds against the airlines, don’t you think the agencies should review the charges, while the government supports them?
Where will the government get the money from? From what we read in the news, the government has been borrowing. We are not only borrowing to pay salaries, but also to service our debt. The government needs money. It’s very unfortunate, but everybody has to manage the situation.
The NCAA DG, Capt Musa Nuhu, threatened not to renew the licences of airlines that were indebted to the agency. How did operators incur a debt of about N19bn?
The NCAA cannot drive a truck to block an aircraft from flying, so there is a process to address it. If I owe you, I have to pay. Even if you go to court, the court may ask me how I want to pay, then we will come to a settlement and restructure the payment. Some of the operators have facilities to pay back. How many seats will they sell, not to talk of the staff they will employ, and some of these staff members will pocket part of the proceeds from the ticket sales, because there is racketeering and luggage pilfering. These are the issues.
With the situation of things, does it mean it’s impossible for a domestic airline not to incur debts?
It’s not impossible. The debt is that much because there are different liabilities. Don’t forget that the management of the airlines are different and the injection of funds is decided by the ownership of the airlines.
What do you make of the suggestions that there should be a merger between some airlines to make them stronger?
I don’t think it will work. They have different business structures. So, who will merge with who? Two chairmen can come together to say they want to merge their operations, but who is taking over who and whose name are we going to adopt? It’s not practicable, in my view.
So many airlines have gone under in Nigeria, is the airline business really lucrative?
People have different business models. Where do we get our funds from? Am I using my personal savings or am I borrowing? So, before you can say whether or not a business is lucrative, you look at the return on investment. How many tickets are you going to sell to make up or do you have any other business that is supporting it? So, it depends. Mind you, people are still applying for the AOC (Air Operator Certificates) and there is a long list. I should add that some people look at ticket sales, but they don’t look at the cost. In aviation, you need to plan thoroughly. You can be making a lot of money in the first quarter, but it can go into maintenance in the second quarter. It’s even more so because we don’t have local capacity, not just for maintenance, but for operations. Have we developed our local engineers? No, we have not done enough. What about the MRO (maintenance, repair and overhaul)? If you want to try and get land at the airport, they will say there is no land or hangar. If not for the Air Force hangar covering our shame, what would have happened?
What of the hangar set up by Aero?
Aero Contractors has the capacity, but they don’t also have the capacity. They have technical capacity, but they don’t have volumetric capacity. They have only two hangar spaces. I wish they have space for 10 so that the airlines can bring their airplanes there for maintenance. That will develop their capacity and save a lot of money, even though the parts will still come from overseas. What we have done over the years; I’m so ashamed to say this, is that we have raised other countries’ economies significantly to the detriment of ours. We have helped to reduce their unemployment because we take our aircraft to them. We have pilots gainfully employed, but some people will tell you openly that they will not fly domestic airlines if the pilot is a Nigerian. They don’t have any problem flying British Airways or Lufthansa or any other, because the pilot is white. Do we love ourselves? I don’t think so. Sometime ago, there was an advertisement by a local airline seeking a foreign licensed pilots to come and work. Why do we do these things?
The issue of cancelled and delayed flights is no doubt a global issue, but in Nigeria many people seem to be dissatisfied with the attitude of the airlines when it happens. Sometimes, there is no communication or show of concern. What do you think?
Let me tell you where I personally blame the airlines. There is bad weather and you can’t fly. They will announce that this particular flight is delayed due to operational reasons. That is not an operational reason; it is circumstances beyond your control. Let’s assume it’s not bad weather, it can be presidential movement, which is when the sky is closed when the President or the Vice-President have to take off. We call it VIP movement. So, there is VIP movement in the sky. Rightfully so, it’s for security reasons, so they shut the sky. In this case, the airlines, without mentioning names, will pick up the microphone and say flight number this and that is delayed due to operational challenges. Is that an operational reason? I have an app on my phone showing clouds everywhere. Sometimes, we even see that it is raining and visibility dropped to zero. For safety reasons, you can’t fly. The same passengers will blame you for the delayed flight, even though the airline should still inform them of the constraint they have.
Many passengers get angry when others leave and they feel left behind. Perhaps that aggravates their anger.
If you say operational reasons and they see other flights being called and everyone seems to be leaving them behind, what people don’t understand is that you must have departure weather okay, in case you need to turn around to land. You must have en route weather okay and you must have your destination weather okay. You must also look at the weather where it’s coming from, so you know what awaits you. The other aircraft on another route may fly at another altitude and have good weather. But you see the passengers waiting for their flight to be called screaming and sometimes calling the operators liars. Let’s say the weather looks good enough and the flight takes off and they run into some turbulence, the same passengers will be screaming, ‘You should have left us in Lagos’, ‘Didn’t you (the pilot) see that the weather wasn’t good enough?’.
Does it mean miscommunication is a problem?
It’s the biggest problem. Some airlines won’t even say anything, and some airlines will shout back at passengers for asking questions. It can always be better managed. You tell a passenger that you have a technical problem, then later you say the problem has been fixed. You have created a problem already. You start hearing things like, ‘Oh! You want to put me on an aircraft that is not good’. ‘That aircraft has just been repaired, I can’t board it’. Meanwhile, there are other factors causing the delays, like the safety checks, passengers that come late such that if you try to shut your counter, some people will fight you and destroy your counter. They can even beat the staff members, because they don’t understand that the earlier they shut it, the earlier people join the queue. In recent times, there have been times the queues extended to outside the terminal. What was the airline supposed to do? They have to wait for them. The availability of Jet A1 is also a problem. If you delay for one minute, you are in the news that you delayed their flight. Yes, we can scream, but there are so many factors beyond the airlines’ reach that will make them delay their flights. However, like I said, proper communication and show of understanding will help.
Some people also believe the regulators have not done enough to address the issue. Is this true?
What can the regulators do? You can’t start shutting down the airlines because of that. It is the same NCAA that says when you start your engine and you see a red light that shouldn’t be there, shut down. If you have started taxing and you notice that something is not right, you turn back immediately. Passengers will get angry with everything. If a plane takes off and they start hearing a sound they don’t like, they start recording videos and posting online. What we should start doing is to encourage and educate our passengers about some of these things. Some of the passengers that make trouble here, when they are overseas and their flight is delayed, they sit calmly. Or are we saying there are no delayed or cancelled flights overseas? They do, only that it is better managed there. The airlines need to invest more in training their staff members to handle delays and announcements.
What do you make of the proliferation of airports by states, is it a good development or is it a misplaced priority?
It’s better to look at it from a business and economic development angle. In New York alone, you don’t want to start counting how many airports they have. If you notice, most of the airports coming up are cargo airports, even though they can also do passenger flights. The fact is that jumbo jets don’t have to go to those airports. You can put a 35-seater aircraft on that route, and before you come out of Lagos traffic and get to Ojodu Berger, the plane has landed. Don’t forget, people will be employed and it will create jobs for some business owners.
If the route is not viable, will it not become a burden?
Airports are not only designed for passenger operations. I like them to develop cargo operations. Let me tell you something interesting. Some of our produce, like yam, orange, etc presented like they are from Togo or some other countries are from here. We need to develop our ease of doing business. In Accra, they have agro operations where they bring produce from the farm and package them ready for export. Do we have that? Do I have to start listing the different agencies you have to pass through to export your goods, from the NDLEA to NAFDAC, Customs and SON, etc. and all of them will work independently; no cohesion. We had a conference recently and I almost shed tears when people shared their experiences. Mind you, these agencies are serving the same government. The ease of doing business in Nigeria is still not good enough. If you go to the bank, maybe as a small business, you will fill different kinds of forms and it’s tiring. We need to streamline all of these.
There have been complaints that due to over regulation, airlines are not able to charge cost-reflective amounts for their tickets, which can make them operate at a loss. As a former DG of the NCAA, how true is this?
To the best of my knowledge, what the regulation says is that any increase in price has to be approved by the NCAA, but have they (airlines) applied? There can be a monopoly, in which case you and me can say let us carry Lagos to Asaba at this particular amount but that is illegal. But you can apply to the NCAA to amend your charges based on certain reasons. You can state your difficulty in getting fuel, the cost, your liability and such things. The NCAA will look at those reasons and decide. If for example you say you want to fly Lagos to Abuja for N100,000 per ticket, the NCAA can say charge N70,000. There is nothing wrong with that. It is when some operators come together and say this is what we want to charge, like a monopoly, that there is a problem.
How can the government rid the airports of the many disused aircraft there?
The Federal Airports Authority of Nigeria has made efforts to dispose of them but if they do, the owners will take them to court. What else can they do? I’m sure there are lawsuits on them already.
