13 October 2017

Nigeria: Usman - Improved Facilities, Competitive Fares Will Boost Air Travel


Director General of the Nigerian Civil Aviation Authority, Captain Muhtar Usman says efficiency in airline operations, sustained safety and modernsiation of airport facilities will attract more air passengers. Excerpts:

It is indicative that many people in the aviation industry see concession of airports as a solution to the protracted decay of infrastructural facilities in the industry, but industry stakeholders are also sceptical about the method of concession. How does government plan to ensure transparency in the transaction?

Well, it is very interesting and I am happy to hear that people appreciate the need to try something else in the proper management of the airports because if over the years, for the past several years. Our airports have not been able to achieve that potential especially in view of the fact that God has made us a natural hub for air transportation. And we have not been able to take advantage of that natural position given to us freely by God because everything was centred on the government; even though we know that aviation is a major contributor to the gross domestic product(GDP) of any country. But we all know also that where the resources are limited there are other priorities. Now having said that, the only way forward, which is what is done worldwide now, is the concession of the airports. This is whereby the airports are not actually sold but a genuine investor or a group of investors are allowed to come in and invest, taking advantage of our natural location whereby the investor will make his money and also government will make its own money based on the agreements reached between the two parties. When this is done well it frees the federation account for other things to be used to meet other social needs. And also with that we will be able to have modern facilities for travel.

So if we all agree that concession is the way, going forward, we all know that this current administration believes in transparency, in fact the government came into power mainly because of that transparency and believe that things will change for the better. Procurement in Nigeria as we all know today is governed by the Procurement Act which is an Act of the National Assembly and government has been saying consistently that all relevant laws will be followed to ensure transparency in this project. As of today, transaction advisers have been appointed, and they have since commenced work. And I think Nigerians should expect nothing less than a transparent process and our belief is that after this transparent process is completed, Nigerians will have the kind of airports that they deserve.

It is believed that more than 60 per cent of passengers that move around the West Coast are Nigerians, and that if we have modern airports with low charges, since concessioning is expected to lead to competitive charges, that Nigeria could become a hub. Now Ghana seems to be edging Nigeria out. What is your view on this?

Well, Nigeria has woken up and a lot of things are being put in place, like the executive order on the ease of doing business, which will go a long way in making it possible for Nigeria to regain that position as a leader. The implementation also of the Yamasoukoro Decision (which is open sky for Africa, whereby airlines from the region will have unhindered access to the airspace of the countries in the continent), that will open the airspace in Africa for competition. And of course we know with competition you have improvement in efficiency and that also comes along because if you have so many choices there is a good chance you have also lower fares and better services. And we all know that Nigeria, when it comes to population it is almost half the size of West Africa itself and Nigerians are very mobile because we move a lot. And once we make our airports attractive for even transiting, we will now make Nigeria a hub. And I believe with the implementation of the executive order and also liberalisation of our airspace in line with the African Union (AU), will go a long way in making that very possible.

Why is it that some Nigerians in the aviation industry express apprehension anytime the US Federal Aviation Administration (FAA) come to audit the country for the renewal of Category 1 safety status despite the fact that Nigeria has been doing well all these years?

First and foremost, let me make it clear that aviation is international in nature, the world is a global village. We fly to other places, other people fly to our place. Standards and Recommended practices are set out by the International Civil Aviation organisation (ICAO). In the last security audit that was done by ICAO, Nigeria did excellently well, scoring over 96 per cent, which is by far a big achievement. In addition to the ICAO assessment, we get assessed by various other organisations such as the Transportation Security Administration (TSA) of the United States. And because we have been able to maintain that required level of security in our aviation system, we have continued to enjoy that direct service between Nigeria and the United States. And of late, precisely on August, we had a visit to reassess our own capability in terms of retaining the Federal Aviation Administration category one status which Nigeria got in 2010, retained it in 2014 and in 2017 again they came to look at us. The process is still ongoing even though for the physical part the auditors have left, we are still communicating. Just like any audit system you will always find something no matter how little. And our aim is to ensure that we can get that 100 per cent. It is not normally possible, so any time findings are made as long as they are not major findings, a corrective action plan is put in place and once it is acceptable on those action plans come with time lines for you to be able to close those findings. And that we have been working along with the Federal Aviation Administration auditors to ensure that whatever findings are, we are able to close them so that we can continue to maintain that category one status.

Also when they came they assessed Nigeria on three annexes of the ICAO, namely: capability in personnel licensing, capability in flight operations and our capability in the air worthiness system and also on eight critical elements were involved in that. So when they came, they came but they did not have to go through annex 14 which has to do with the airport certification as was wrongly credited to them that they came and they saw that we didn't do well in the aerodrome. And now as you can see, the first airport to be certified in Nigeria is Murtala Muhammed Airport and it is the first certification carried out in Nigeria in line with the international civil aviation organisation standards and recommended practices and of course it has its own advantages.

Since 2013 Nigeria has maintained very high safety record and since then there has not been any major incident or accident, what is the secret and how do you intend as a regulatory body to sustain this good record?

Thank you very much. First of all, we have to give thanks to Almighty God for keeping us accident free since that time. Of course, we will not completely rely that God is there He will do it, we did a lot and we will continue to do a lot in terms of areas of training; in terms of surveillance, in terms of enforcement and regulation of safety concerns. So the target for us is to ensure and sustain zero accidents and we will continue to work towards that. We engage the stakeholders because the regulation alone will not do it. First of all, the regulation is a product of the industry, the civil aviation authority proposes, the stakeholders sit down and look at the relevance of the regulations and once they are accepted and promulgated into laws and then we monitor. We mount surveillance and we ensure that those regulations are obeyed. Where there are failures, we just have to go through the compliance system and the essence is not to punish but to correct to ensure that we have safe skies and safer airports and safe aviation industry.

Now that NCAA, in accordance to ICAO regulations, has certified the Lagos airport and subsequently other major airports in Abuja, Kano and Port Harcourt, what are the gains of the certification?

Well, this is interesting, that is why I mentioned earlier that this is the first time we are certifying the airports. Of course it comes with a lot of advantages, one: the world is a global village, therefore we need standards. ICAO sets those standards and recommended practices and the requirement is that all international airports must be certified, that is for uniformity. We are talking about safety because without safety nobody will come near the airport to fly. So that is one major advantage. Also, along with that comes the security because without the safety and security, there will be no commercial activities around the airport. In addition to those ones, once you are safe and you are secured your risk is much less. So, it is expected that the cost of insurance premium to those airports that have been certified will go down. And then that can cascade all the way up to where you have reduction in air fares for passengers going to those airports that have been certified.

The requirement for now in the ICAO is to certify international airports. So we are starting with the international airports first, beginning with Lagos, the next will be Abuja and then the remaining international airports. Once we have succeeded in doing those international airports, we will now go ahead and replicate with the other airports. But one thing that is very important is that when you are certified you are given so many privileges. Now, privileges come with responsibilities, so the responsibility is to continue to retain that certificate otherwise the certificate may be rendered null and void; just like any other certificate that always come with some kind of conditions to maintain that certificate. So we have been working along with the airport authority and also with the Nigerian Airspace Management Agency (NAMA). These are all part of the certification process, it was made possible also with the assistance of the ICAO, our regional safety oversight office in Abuja. In the case of Lagos, we have the owners of the MM2.

There is always this issue of which part of the airport will be concessioned? Now we have limitations in terms of air field lighting, then you talk about category 3 Instrument Landing System (ILS) to enable aircraft to land during the harmattan season. How do you think all these things will be achieved taking advantage of the concession plan?

First of all, when you are concessioning an airport you are not concessioning with the security because the security of the airport is still a responsibility of the government. So what will be concessioned will not include the security especially on the airside of the airport. And the instrument landing systems that will aid the aircraft to land in adverse weather condition in terms of visibility will be determined by the kind of operations you want to do. Now, the plans are to initially start with Lagos and Abuja the category 3 instrument landing system , that will enhance the airport and make it more attractive to people who wants to invest in that airport. The same thing the certification also will make it very, very attractive to whoever wants to come and invest. This is because once you know that whatever you are investing, you are investing in an airport that is internationally accepted and it has met the safety and security standard.

One admits that sometimes the airlines are full of complaints, one may agree to some level that there is no special attention or advantage given to local airlines by government in Nigeria. What is your view about this?

I will not accept that attention has not being given to them and as usual there will always be complaints and we in the civil aviation authority, there are means to settle whatever complaints when it comes. When it comes to charges, they are not set arbitrarily and people must pay for the services rendered. The same way that a passenger will not come and fly and say okay I will pay you tomorrow. So you know that to provide that service you will need to spend some money, so you have to make provision for all those. As far as I know, we have been working with all the airline operators to ensure smooth operations. And charges, as I mentioned, are covered in our own regulations, the process of putting charges and how they will be collected, they are all part of our laws. So we just want them to be a little bit more responsible when it comes to payment of those charges. This is because unless you pay those charges it will be difficult to render those services that are expected of the other regulatory agency or the other service provider like the Federal Airport Authority or NAMA and the rest. So we have a forum where we meet. The ministry has been facilitating this in fact, of late even the office of the Vice President got involved and government is willing to give concessions wherever it is possible. Of course, like I said once a service is rendered it has to be paid for because that is the only way you can continue to sustain those services.

I want you to advise Nigerian airlines that wish to operate international routes, how can they grow and sustain that operation for a long time?

Well, it is always good to do feasibility studies and see how others are doing it. We are not going to reinvent the wheel. The foreign airlines start with a clear direction, knowing where they want to go and they work for it and most of the time when they come they remain in the business. It is unfortunate that some of our airlines start and they don't last very long on a particular route. We are willing to assist but one of the major things is payment of bills as at when due, that is one of the major problems.

Government has facilitated domestic carriers to operate international routes by approving airlines that believe they can do so. Almost all the airlines that applied to import aircraft were given the approval to import the aircraft. And of course they have to do that in line with the provisions of the regulations. It is the same thing for those who are being designated, based on the bilateral air service agreement we have signed with other countries, they are expected to abide by our own regulations and also the regulation of the countries where they have been designated to operate. Government has been very supportive of the airlines and I advise that Nigerian airlines should not seek to operate outside the country without fully carrying the regulator along.

We expect that before a Nigerian airline will start discussions with a country it should table it with NCAA and with that the regulator will not only be in the picture but give approval and support. You don't do these things along and when you have issues on the way then you start calling NCAA. You carry them along because we already have agreement with these countries. And as I said earlier, wherever it is possible to give further assistance to the operators, the civil aviation authority is open and I am sure the federal government is open to assist the operators.

Former Nigerian Airways workers are very happy with the federal government which recently approved N45 billion for their severence pay after several years of agitation which previous government failed to pay them. What transpired this time?

Like I said before, this government is a listening government. This agitation by former Nigeria Airways staff has been going on for some time and it will be better to settle this problem before creating another national carrier even though the previous carrier that was Nigeria Airway was government owned airline but the new carrier that is coming up will be private sector driven. So it won't be the same as Nigerian Airways. So this administration felt the need to provide succour to those ex-Nigeria Airways workers who have been suffering over the years. I believe more will come from the side of the government.

You mentioned that the new airline will be private sector driven, what will make it a national carrier if government does not have a stake in it?

Well, the stake government will have is that it is a Nigerian company and being a Nigerian company, the Nigerian government has a share. I cannot tell you the exact interest that government will have. We will leave that to the Transaction Advisers that will do the needful and make sure that all the necessary things are done to meet the agreed objective. This is because the advisers have been appointed to establish the national carrier. However, whatever they will come up with, it will carry the Nigerian flag and that is very, very important. For you to have an effective base or hub you will need a base carrier. So there is the need to have a very strong national carrier and that national carrier will take advantage of the modernised airport facilities, which obviously will increase capacity and efficiency. So there is the need to have your own airline that will benefit from this growth and development. It does not make any sense for you to build these facilities just for foreign airlines to benefit without your own taking advantage of it. Two, in line with the standard, we are going to have Maintenance, Repair and Overhaul (MRO) facility which is also a requirement that would boost a hub.

What are the factors that the new national carrier should avoid in other not to go the way of the past airline, recognising, however, that the new one will be private sector driven?

Well, it is very important that the new national carrier is run as a business entity. So there must be that proper corporate governance and also being that it is a private sector we believe they will attract the best hands in management. So once you have those two, you are very likely to succeed.

Aero have been certified to offer maintenance services up to the C-check level, that is a mileage, what is your view?

Well, we have been talking about the Nigerian economy, and that it needs maintenance facility and one of the major areas is the amount of money that we spend outside to do checks and services. Now that we have that capability in Nigeria, it is expected that it will reduce the capital flight. Two, the capacity is there to even attract other people to come and do their own maintenance here. So in addition to stopping the capital flight it will also be able to attract other airlines from outside Nigeria which will bring in foreign exchange. Three, another advantage is that it will create employment in the system. So there are many advantages, especially for us the regulator. We can also easily monitor the maintenance facility because it is near us. We need not travel overseas to monitor the maintenance of an aircraft. Of course, the time it takes to do the maintenance, the time lost in ferrying the aircraft, which is another cost then bringing it back and keeping people outside and so on will be saved, so all those are going to be something we are going to gain from.

How would government make more Nigerians travel by air because currently people who travel by air are still less than one percent of the population?

This can be achieved through improved efficiency, through competition and also trying other things that worked in other places. This concession issue that I mentioned, the liberalisation of the air itself whereby you have a lot of competition, and then prices will come down, services will improve and then more people can afford to fly. And the more people are flying the more your chances of expansion and the more the units in all the economics of scale will improve because the more people fly less will be the unit cost at airports.


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