25 March 2019

Nigeria: We Have Completed Preparation to Start International Flights - Onyema

Photo: This Day
Airport Runway
interview

The Chairman/Chief Executive Officer, Air Peace, Allen Onyema, in this interview says the airline is set to start international operations. He also explains that for the airline to succeed, it requires the support of government, saying that no airline can succeed in the world without the support of its host government. Excerpts:

How far have you gone in your preparation for international operations?

Well, you know doing international operations is not the same as doing domestic operations. It is a different ball game entirely. A lot of things are involved. Besides your technical preparations, you will also think of the international aero-politics and you think of the cost of having to do these flights. When you want to do international operations the very first time, it is like you are obtaining AOC (Air Operator Certificate) afresh and trying to start airline operations for the first time. So, you must make sure that everything is in place before you go into it. We have been doing domestic operations for the past four years and now we want to go international. It is a different ball game entirely like I said, there are lots of factors that come to play and you must address every issue; you don't jump into it without looking. If you leap before you look, you may hurt yourself. First of all, the charges, are you prepared for the charges? Assuming you start operations and the passenger load factor is not there, how long can you take it? Like in Air Peace, we have told ourselves that the next one year, good or bad we must continue. The inability to continue has been the bane of most Nigerian airlines, we seem to go in and then run away. This was why we had to acquire four large aircraft for the long haul flights. So we want to prepare ourselves. We don't want to bite more than we can chew. We want to represent this country well. We want Nigerians to be proud of this airline. We want to be one of the best in the world. We want to set a standard, we want to be recognised globally as a reliable airline with reputation for safety and comfort of our passengers. This is why we are preparing heavily. The time we bought our first 777, some other airlines could have started and before you know it, one day the plane must go technical and you start disappointing people and they start shouting, oh Nigerian airlines. We don't want to do that. We have acquired four Boeing 777; the third one arrived on Wednesday (March 20, 2019). So this is Air Peace for you; we just don't want to go out there and just to be counted, no; we want to represent the country very well, so that if any aircraft goes technical at any time, we don't want to manage our planes. This is the same standard we have maintained at the domestic scene. We don't manage aircraft. Even when we have met all the requirements after maintenance of our aircraft, we still go beyond what the aircraft manual says by conducting test flight without passengers in the aircraft. This is to make sure that we are flying safely. So we are ready, we have done our over five hours of demonstration flight, flying our planes with only the Nigerian Civil Aviation Authority (NCAA) officials to Dakar. We came back, we did another return flight to United Arab Emirates, to Sharjah, we came back. We did another one to Johannesburg we came back successfully. NCAA has put the first two Boeing 777s on our operational specifications so we can start. That is what we are waiting for. And we hope to start our flight operations in April.

Nigerians are lamenting that no Nigerian airline is operating international service and because of this the country is losing forex revenue. Is there any support you are getting from anywhere for your planned international operations?

I don't see any help yet. I don't think we are getting the necessary support we are supposed to get. Because we want to start international operations next month and up till this time, I do not have a business or first class lounge in my own country, while other foreign airlines have. What it means is that these premium passengers would want to patronise Nigerian indigenous airline, but you don't expect them to do that at the expense of their comfort. They would rather fly another airline, which is a foreign carrier that already has such lounge at our international airport. They will have a place to sit down, enjoy themselves free of charge and then they go into the aircraft. Such passengers may not patronise Air Peace if it is not able to provide that. So the regulatory authorities and all the agencies of government that are in charge of aviation should do everything possible to support indigenous carriers. Indigenous carriers should be protected by government and its agencies because we are the ones providing jobs for the people in the aviation industry. If anybody causes Air Peace to shut down tomorrow, over 4,000 people employed by the airline would be out there in the job market. Half of them or three quarter of them could go into illicit activities in order to survive. I remember my wife going to Kogi and bringing over 200 orphans who have nobody to care for them. They are working here in air Peace earning their livelihood. If they were not provided jobs just think what some of them would become in our society where job is not easy to come by.

In every country, every investment that creates jobs is always supported and not frustrated. At times we feel frustrated, a lot of people are saying Air Peace has not started international service but we are being frustrated. I have had two Boeing 777, you know how much that cost, parked for over one year, going through the processes.

Another area we want government's support is the issue of designations being given to the foreign airlines. I am about to start going to Sharja, Dubai, just last week I read in the papers that another airline from that area has been given rights to be flying to Port Harcourt and given a second right to fly out of Abuja, making it five designations in a day out of the same country. And this is a Nigerian airline, the only one trying to operate international. We expect that for Nigeria to cut back the foreign exchange that is being repatriated government should support any local airline that wants to operate international destinations. If we are losing money to foreign airlines, then support your indigenous carriers; the best way to bring it back is not to allow foreign airlines to ravage us.

To be honest with you, some of these foreign airlines do this deliberately in order to run us out. Because if you look at the ones they are doing now they are not having full load but because they have state funds, they want to muscle you out, then when you die they go back to their normal frequencies and increase fare. That is what is happening. US has not allowed Middle East airlines to do that in their country. American carriers complain when they feel their business is threatened and their government responds and protects them. Their government responds to them in order to allow their indigenous airline to prosper and create jobs. If you like give the foreign airlines 200 frequencies into Nigeria, all of them put together cannot create 10 per cent of jobs created by Nigerian airlines.

I want Nigerians to put hands together and support Air Peace because it is our airline.

For years now India has been longing for a direct flight from Nigeria to India and it has never worked. So they usually follow other airlines and drop at their hubs then connect. Don't you see that, that is a potential market for a Nigerian airline?

The federal government has just signed Bilateral Air Service Agreement (BASA) with India and I thank the federal government for giving Air Peace rights to do direct flights to India. You must have heard the Indian High Commissioner to Nigeria making an announcement on it recently, saying that they expect Air Peace to fly to India. They have held meetings with us and they are eager to with us and we are also eager to work with them. To show their willingness to work with us, they are helping us to quicken the process. This is how things are done. So we are going to get cracking with India, once we start direct flight there, Nigerians will no longer have the problems of having to fly to some countries before they get to India. And again we are going to sign codeshare or partnership with an Indian carrier, so that when we take you to Mumbai, the other one will take you to your final destination in India.

This is what we are asking for in Nigeria. Instead of allowing foreign airlines to go to Port Harcourt, from Port Harcourt they go to Abuja before they go to their country, they should partner with Nigerian airlines to distribute passengers for them. They should operate to one airport and then look for Nigerian airline to partner with. If I want to go to Mumbai or New Delhi, Indian authorities will not allow me. They will want you to key in to one of their airlines. This is how these things are done and when you say Nigerian airlines slack capacity, these are the things that are making them lack capacity. You should lay the foundation for them to have capacity by making it impossible for them to have capacity. How do they grow if you allow them to be competing with airlines that are being funded by the states? Airlines that do not care about profit or about whether they break even. They have other reasons for doing the airlines business. So for us to have capacity government has to help us. For Air Peace with four Boeing 777s we have capacity now to do the number of routes we want to do. So, what we need is the support of everybody, government support, support of people and the support of even our staff to make sure they are doing the right thing. So that is where we are, we are ready to get cracking. After Sharja the next one is India, Johannesburg and others. And God will continue to help us; our banks are always ready to help us.

When the Boeing 737 Max cashed in Ethiopia, there were lots of questions and comments that Air Peace had the aircraft type in its fleet, some know that you have ordered the aircraft but you are yet to have it. So I want you to throw more light on this aircraft order?

May the souls of those who perished in that ill-fated flight rest in peace, amen. I commiserate with the Ethiopians, Ethiopian Airlines is one of the best carriers in the world, there is no doubt about that. It is one airline I respect so much, it was unfortunate what happened, happened. However, an air incident or accident happened in Ethiopia, Ethiopians have never taken their airline that was involved in the accident to the cleaners. Ethiopians have never up to this moment attacked Ethiopian airlines that bought this aircraft and this aircraft had an accident. South West Airline has so many of these planes, no country has ever attacked those who innocently acquired these planes and who are already using them. We have about 400 of these planes in active service; none of these countries where these plane are operating had ever risen up against their airlines for buying these planes. Not even Ethiopia and Indonesia that had accidents with these planes, their citizens never attacked them. However, Air Peace has been taken to the cleaners by Nigerians for what didn't even concern us. All the people criticizing are doing so deliberately because they know fully well that we don't have Boeing 737 MAX in our fleet. They just want to de-market Air Peace. Whether they are being sponsored or they are doing it on their own. But it is so painful that an accident happened in another country and Nigerians swooped on Air Peace.

Yes, of course, we ordered 10 brand new Boeing 737 MAX 8 last year. Before we ordered it there was no accident involving the aircraft. The aircraft is the fastest selling plane under the sun. It is the most fought-after plane in the whole world. It is unfortunate that the accidents happened; it is the dream of every airline to have a B737 MAX 8 or 9. So we joined other reputable airlines in the world to order the aircraft. When we made this 10 firm orders nobody applauded us. We didn't see any celebration that, at last, another Nigerian airline has started buying brand new planes. There was no such celebration. What every country that has the plane did was to ground the use of the airplane pending when the result of the investigation comes out. We don't have the plane. Air Peace does not have the plane. When you order brand new plane you queue up. Boeing 737 MAX has hundreds of orders, we ordered just last year. Those that ordered last year will start getting their planes in 2023, which is four years from now. So we don't even have this plane in Nigeria, Air Peace doesn't have the plane. Our own is destined to come four years from now and we never told anybody that we will cancel or that we will not cancel, we never said that and we will never tell anybody that. Because it is not for us to say that now, except you want to run yourself into serious litigation and run yourself out of the industry; that is what they are trying to push us to say. Everybody is waiting for the outcome of the investigation. Don't forget that every aircraft under the sun, once it is a new model, is expected to have some issues and these are corrected over time. The Boeing 787 had lithium battery issue. Airbus A380 had its own issues, which were corrected. Boeing 787 is flying today as one of the best long haul planes. When something like this happens they go back to the drawing board and find out what happened and what they will modify and what they will change. They have not come up with that. But it is not for us now to jump the gun and say we are cancelling. So Air Peace never told anybody we are not cancelling; neither did we tell anybody that we are cancelling. So such statement is premature we are not going to make that statement now. And the federal government has come out to say that there is no airline in Nigeria that has the aircraft. So the sponsors of that propaganda against Air Peace now changed course and started saying 'Air Peace dares the world,' 'Air peace insists on not cancelling.' We never said that; neither did we say that we would cancel.

The Single African Air Transport Market (SAATM), which Nigeria is a signatory to enables other African airlines to come to Nigeria but when Nigerian airlines go to their countries, they introduce high and outrageous charges against Nigerian carriers. So is there any way there could be an agreement?

I have heard so many people say that the African market is a cash cow, those people are not talking from practical fact. A lot of people say the west coast is lucrative. People think of the years before, it is no longer like that and I don't know why. The cross-Sahara African trade is no longer there the way it used to be before. There were periods the routes in the sub-region were lucrative. Then, Nigerian airlines were the major carriers operating the routes but this is no longer the case.

Presently we have more airlines struggling for fewer passengers; then, of course, we have very inhibitive costs being put out there by these countries against Nigerian airlines. Nigerian airlines are the victims. The costs Nigeria charges these West African carriers is relatively little, about 25 per cent of what they charge Nigerian airlines. But you need to take a flight to Ghana, Banjul, Dakar, Liberia and come back and see what it is like. I have spoken to the chief finance officer and she said that we lose over N500 million monthly to the West Coast. This is money made from domestic operation that we lose to the West Coast. Except this SAATM is readdressed, Nigerian airlines will go into extinction. Any Nigerian airline venturing to operate West Coast should be ready to lose money; unless the Nigerian government intervenes. If Nigerian carriers continue to operate those routes with the way things are today it will affect their revenue base and they will crumble. That is why most Nigerian airlines could not succeed on those routes; but they did in the past. We are only trying and continue trying because we are going to do international soon and we want to see if we could mop up some passengers there and start using Nigeria as a hub, that is why we are still on it. So we lose over N500 million monthly to SAATM. The charges levelled on Nigerian airlines by the countries in West Africa are out of this world. The solution to this is if we can have uniform charges. Because when they are coming to Nigeria, I doubt if they pay those charges they ask us to pay in their country. And in Nigeria they are given something that is acceptable and affordable, so they can now afford to compete with us, bringing down their fares at will because they don't pay what we pay. African World Airline (AWA) of Ghana charges N40, 000 for Accra-Lagos ticket. But if Ghana takes over $100 from you as charges, how much do you use in buying fuel if you are going to charge N40, 000?

So that is what is happening; the market is skewed against us. The federal government has to intervene if they want Nigerian airlines to succeed on this SAATM. Or slam heavy cost on all these West African airlines coming to Nigeria. If they don't do that they will kill Nigerian airlines. Air Peace loses N500 million on charges because of the heavy cost of landing in these West African countries. When you bring your passengers from Nigeria they charge you per passenger, when you take out any passenger they charge you. So they charge as much as $150 yet some of their airlines are charging N40, 000, which is little more than $100. They could charge that amount because they do not pay what we are asked to pay when we go to their countries. Before the treaty was signed Airline Operators of Nigeria (AON) criticised it and demanded for uniform charges, but those championing it told us we were going to benefit from it, but we are not benefitting.

Has there been any official notification about these differences?

I think our COO has written on this. It is a lot of loss and all these West African airlines are all coming to Nigeria because the competition is high and they are the ones gaining because they don't pay those cost. We have never carried more than 25 passengers on Abuja-Accra, but the other airlines come twice there because their fares are cheaper than ours. We pay exorbitant charges; they don't. I don't think I have seen more than 25 passengers on Abuja-Accra at any point in time. Lagos-Banjul is 17, 20 or 25 passengers. What you carry is not even enough to pay for your fuel.

But wont you consider stopping, when you start international you can code-share unless there is intervention from the Nigerian government and If there is no intervention, when you begin international operations you can partner with the other airlines to bring in passengers because it will cost you more bringing those passengers?

Let me tell you something, why can't we reciprocate in the same manner? What does it take? You can wake up and under 24 hours and do them the same thing. You will see they will beg. Give them the same cost as we pay over there and they will all come begging. Why won't some of them come here and stop here in Nigeria, it pains me. We cannot condemn Nigerian airlines without looking at what they are going through.

With the re-election of President Muhammadu Buhari, what are your expectations in the aviation industry?

The President has done so well for us in the aviation industry. He has done so well on issues of VAT waiver, customs duty waiver on commercial aircraft spares and engines. He has completed some airports but there is still a lot more to be done. Therefore, we expect government to pay very much attention on developing our airport infrastructure. And like I always said, no government has business doing business. I will want this government to pursue the issue of concessioning all Nigerian airports. That is the key solution towards the modernisation of airport infrastructure in the country. I know people are there to sabotage government's effort towards this, but unless airports are concessioned to private hands, we will continue crying in this country. Our airports will never be anything to write home about. Let the government be prepared and I trust President Muhammed Buhari, he does not care about political correctness, he cares about the future wellbeing of the country. Let him bring the same weight to bear on airport concessioning. Nigerian airports are not looking like what they should be; airports are run by private hands abroad. The way it is being run now, is not the right way. I am not advocating for people to be sacked because I know some unions will say they should not concession the airports, we must concession airports. For us to be ready to play big in this world, for us to be proud of what we have, then we must concession these airports. What is happening now is an aberration. Everybody must support government to concession the airports. The federal government should come full force to concession these airports. If the government want the airports to meet with international standards, let them send out expression of interest out there, a lot of investors will come in. these is a country of over 180 million people, a lot of investors will be willing to come.

Somebody might say, okay I will take up building airport terminal, concession it to the person even if it is 40 years, let the person build and be paying government taxes. The government might even make more money by doing so. The government will conserve its funds for other sectors of the economy. Somebody might even say, I will build the runway and collect landing charges for the next 50 years. The person might be taking 80 per cent of landing charges, reserving 20 per cent for the government. People will be willing to do that; then you will see better and world standard runways. The government will sit back and regulate to ensure things are properly managed. And if you concession for example, Lagos airport, the concessionaire or would be concessionaire will sit down and look the workforce, re-interview them if possible and know the ones they will use.

They may even recruit more people. They may do away with unskilled personnel because under government a lot of unqualified people will be employed because they have connection. When you go to the airport there are many of them that are not supposed to be working there. People who do not understand that airlines are their customers that they need to treat them well; they treat the airlines as if they are our bosses; they are not courteous to the airlines, no, it shouldn't be like that. So these people don't understand what it takes to work in an airport environment. So the concessionaire should not be forced to take anybody. The ones he cannot work with, the government should absorb those ones in the Ministry and put them where to work, they shouldn't lose their jobs. I don't support people losing their jobs. I am sure some of the unions at the airport are kicking against concessioning because they are afraid of their jobs, yes, anybody can be afraid of losing his means of livelihood. But the government should make it known to everybody that they are not going to lose their jobs. If the concessionaire cannot retain the staff, they absorb them in any ministry. That is the best way and money they are getting from the concessionaire will help in paying their salaries and the airports will be greatly improved.

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