There is a growing agitation for the federal government to declare a state of emergency in the aviation industry, to drastically reduce, if not stop the high mortality rate of indigenous airlines.
Aero Contractors is the oldest airline in Nigeria, established two years after the defunct national carrier, the Nigeria Airways. The airline was established in 1959 and registered in Nigeria in 1960 to provide support for oil companies before venturing into passenger operations. Since inception, the airline has been a household name in the aviation industry.
But on August 31, 2016, Aero Contractors suspended operations and ordered over 1000 workers to proceed on indefinite leave. The chief executive officer of the airline, Capt. Fola Akinkuotu, said the development was to reposition and return it to the part of profitability.
Akinkuotu said the airline had faced grave challenges which impacted negatively on its business in the past six months. According to him, the challenges, which included internal and external environmental factors, made it difficult for them to continue operations. In fact, the airline was left with one aircraft, a situation that was confirmed by the Nigeria Civil Aviation Authority (NCAA).
Another airline, First Nation Airways, equally announced suspension of flights, 24 hours after Aero suspended operations. However, it resumed after two weeks. The airline attributed the temporary suspension on difficulty in raising foreign exchange to carry out maintenance of its aircraft. Few days after, there was confusion in the industry as Arik Air also went off air for hours over insurance- related issues.
Prior to the suspension of operations, Aero, alongside Dana Air, had earlier suspended Accra, Ghana flights amidst difficulty in getting aviation fuel. They cited high cost of the product and foreign exchange challenges.
Experts have continued to express worry over the developments, which they said portended bleak future for the industry in Nigeria. Speaking to Daily Trust on Sunday, many observers lamented the dwindling fortunes of the aviation industry despite that the fact that the country has the largest air transport market in West Africa, with over 3000 Nigerians leaving the shores of this country for other African countries, Europe and America on a daily basis.
According to a recent statistics of local and international flights released by the NCAA, out of over 35 airlines in operation, only eight were indigenous. The eight Nigerian airlines are Arik Air, Med-View Airline, Aero Contractors, Dana Air, Air Peace, First Nation, Overland, Azma. The statistics thus revealed how the market is dominated by foreign airlines. Few other local carriers like Skypower Express, Max Air and Kabo strive hard to fly with Nigerian flags.
Experts said it was worrisome that Nigeria, which could boast of over 50 indigenous airlines 20 years ago, allowed them to go into extinction.
The defunct airlines are Flash Airline, Kabo Air, Hold Trade Airline, Gas Air, Jambo Express, Chachangi, IRS Airlines, Savannah Airline, Albarka Airline, Intercontinental Airline, Air Mid-West, HAK Air, EAS Airline, Nicon Airways, Virgin Nigeria Airline, Air Nigeria and Falcon Air.
Others are Sosoliso Airline, Zenith Airline, Barnax Airline, Space World International Airline, Dasab Airline, Fresh Airline, Triax Airline, Bell-View, Freedom Airline, Okada Air, Concord Airline (owned by the late Chief MKO Abiola), Associated Airline, Air Taraba (serving Taraba, Borno and Adamawa).
The list also includes United Air Service, Aras Airline Ltd, Nigeria Global, Nigeria Eagle (which commissioned an aircraft but didn’t fly and had to take the aircraft back), Harco Airline, Premier Airline, Al Bashir, Trans-Sahara Airline, ADC, Oriental Airline, Axiom Airline, Forward Air, Slok Air, Das Air and Cargo, among others.
Some of the owners of the defunct airlines who interacted with our correspondent said they were not willing to talk about the situation.
They wondered why government would fold its arm and allow airline businesses to collapse. They mentioned the challenges of foreign exchange, high taxation, fuel scarcity, among other factors, as what contributed to the high mortality and morbidity rate of the airlines.
An owner of a defunct airline from the southern part of the country who preferred anonymity simply said, “I have really decided to move on. I don’t want to talk about the industry again.”
Also speaking to Daily Trust on Sunday, the former chairman of Trans-Sahara Airline, Alhaji Salihu Yinusa, said government had no policy that would encourage indigenous airlines. According to him, while airliners buy aircraft and spare parts in dollars, they price their tickets in naira.
“We buy aircraft and spare parts with foreign in dollars. And our people actually have likeness for very cheap tickets, almost free tickets.
“Secondly, here in Nigeria, we fly only for few hours. But an aircraft has hours it needs to be utilised. In foreign countries, an aircraft flies 24 hours. It only stops when they have to service or carry out maintenance on it. So the aircraft is usually parked when you are supposed to be flying. That actually contributes to the failure to get revenue to pay for our needs.
“In addition to that, the dollar we were getting at N170 and N190 now goes for N470 and N500. And there has not been fare increase for the last two to three years. Also, fuel price has increased. The fuel price constitutes more than a third of the cost of the aircraft. The airlines want to increase their prices, but they are also afraid that they may have fewer passengers. These are some of the major problems we are facing.
“The Nigerian government does not help matters either. In fact, government does not take the aviation industry seriously. It does not see it as good business. But as a government, you cannot prosper without having airlines flying in and outside your country. Our people are being ripped off by foreign airlines. A ticket that would cost you about N200,000 before is now about N1million. These major issues forced some of us to crash out after spending millions of naira to establish airlines. It is painful. It is just by sheer luck that some airlines are still flying.’’
Some industry players who spoke to our correspondent also faulted the business strategies and models adopted by some of the airlines.
Capt. Ibrahim Yunusa Kazaure said, “Most of the investors in aviation are cajoled into it. They didn’t know that running an airline was highly capital intensive. Again, some use the airline as a front. After looting government treasury, some of them invested in aviation, using fronts that are not aviators.
“Another challenge is that they sell tickets in naira but buy spare parts and do maintenance in dollars.”
Mr. Chris Aligbe said government should grant tax waiver and concession to players of the aviation industry. He also said the models adopted by some of the airliners were wrong.
“Their models were not right. And some of those who entered the airline sector early were not professionals. They were pure business people who also used the airlines for other purposes.
“As at today, our airline subsector is still in infancy. In fact, the whole industry is not where it should be,” he said.
Also speaking to our correspondent, the chairman of Airline Operators of Nigeria (AON), Capt. Nogie Meggison, said the defunct airlines were killed by the “queer methods” adopted in regulating the industry. He said the remaining ones must be protected so that they would not go the way of others, adding that government should encourage the growth of new indigenous airlines.
According to Capt. Dele Ore, government should create an enabling environment for the airlines and come up with a maintenance, repair and overhaul policy, as well as address the foreign exchange challenge facing the airlines.
Ore said there was the need for improvement in manpower requirements of the aviation industry. He advocated that the federal, state and local governments should collaborate to achieve the manpower needs of the industry.
“Government should ensure that they don’t give preference to foreign airlines at the expense of our local airlines. We need to support them to grow,” he said.
Many analysts said there was the need for government at all levels to do the needful and ensure that indigenous airlines are not only encouraged to grow, but supported to compete favourably with their foreign counterparts flying into the country. – Daily Trust.
