20 November 2017

Nigeria: Experts Seek Corporate Governance Compliance in Aviation Sector

Aviation experts have called for strict adherence to corporate governance in the industry, insisting it is a key to the development and growth of the sector.

The experts also called for the increase of the number of aircraft owned by an airline from the existing minimum two aircraft to 20.

This was contained in the communiqué issued at the end of the conference organised by Aviation Round Table (ART), a think-tank group in the industry.

According to the communiqué, "There should be a culture of corporate governance and transparency in the business of managing the aviation sector, such that government and other parties in infrastructure-related commercial agreements in the industry should respect the terms of such agreements if the industry is to move forward."

The body therefore, recommended that the existing concession/agreements that have developed into controversies affecting the entire industry should be resolved immediately in the interest of the sector, taking cognisance of initial capital invested by the businessmen who brazed the odds to commit their for the development of airport infrastructure and services.

The body also urged for end of political interference in the sector's regulatory activities and noted that there is a need for the establishment of an inter-governmental agency, Stakeholder Group led by the regulator for the administration and management of Bilateral Air Service Agreement (BASA) funds and for implementing aviation development plans.

"Bilateral Air Service Agreements, Multilateral Air Service Agreements (MASAs) and International Routes are the nation's infrastructure and assets, while air traffic rights are like oil blocks and therefore, should not be treated with levity in administration or by unilateral exploitation. Therefore, BASA funds should be used for critical-safety infrastructure development as provided for in the Civil Aviation Act 2006.

"There is also a need to have surveillance cameras in and around every airport in Nigeria to be complimented with the establishment of Aviation Industry Cybersecurity Emergency Response Team (CERT) to enhance aviation security. Additionally, we need to enhance the airport perimeter fences where there are no security fences to sufficiently comply with Annex 17 of the International Civil Aviation Organisation."

ART noted that with the increasing importance of Information Technology for massive levels of efficiency, effectiveness and profitability in air transport, an integrated aviation communication infrastructure should be established.

The body also observed that with increase in traffic and number of aircraft in the Nigerian airspace over the years, the existing CNS/ATM (Communication, Navigation and Surveillance/Air Traffic Management) Systems need to be optimised while improvements should be made to match capacity at the airports with the adoption of satellite and digital technologies.

"There is a need to ensure the provision of regular public power supply at the airports and all en-route stations nationwide which will naturally facilitate the continuous provision of safety - critical services. There is a need for local airlines to pull resources together and establish a local maintenance hangar as a way of minimising their aircraft maintenance cost," the communiqué said.

The experts remarked that for Nigerian airlines to attract funding facilities from financiers and institutions that are predominantly based outside Nigeria, "Our airlines must be within these parameters: viability, capacity and the potential to earn more revenue from commercial agreements in view of the weakness of the local currency.

Therefore, we urgently call for regulatory consolidation process that increases the minimum fleet for AOC issuance for scheduled passenger airline operations from two aircraft to 20 aircraft.

Nigeria

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