Nigeria: Protecting Nigeria's Aviation Sector

13 December 2019

Over the years there has been threats that the nation's aviation industry could be taken over by foreigners as many local investors have been discouraged from investing in the industry.

The air transport sector is known globally for its low yield in terms of return on investment, especially in the airline business and what is peculiar about operating airlines in Nigeria, according to industry observers, is that it seemed as if the policies that guide the industry is pitted against the operators.

The fear that the sector might be taken over by foreign concerns may not be unfounded when these facts are considered. Nigeria airlines contribute less than five per cent to international flight operations in terms of passengers airlift.

Nigerian airlines are not doing so well because of hindrances, ranging from poor infrastructure, absence of critical facilities, lack of incentives by government and failure of the airlines to build goodwill in the area of financing and accessing credit facilities from financial institutions.

These are the factors that make many industry stakeholders consider opening up the domestic market to foreign carriers.

But the last attempt by Richard Branson of Virgin Atlantic Airways to establish a local carrier in Nigeria failed after some years.

But there is still nostalgia about foreign airlines establishing domestic carriers in Nigeria.

Last week the Aviation Safety Round Table Initiative (ASRTI), a think-tank body in the aviation industry met to deliberate on how to sustain the industry and set target for the future.

The position of the group was guided by its President, Dr. Gabriel Olowo.

Olowo, expressed worry about the condition of the industry and a seeming weak plan by government to develop the sector, considering the funds earmarked for the air transport sector in the 2020 budget.

In the communiqué issued at the end of the meeting, ASRTI urged that industry stakeholders to project and promote the industry in every way possible with appropriate strategies and warned against the total surrender of the sector to foreigners.

The stakeholders may be apprehensive due to what is generally perceived as the arbitrariness in which government, through the Ministry of Aviation give frequencies to foreign carriers, that obviously dominate the airlift of Nigerians to international destinations.

"Nigerian aviation professionals should project the nation's aviation sector expectations into 2025 with appropriate implementation strategies in order to avoid a total surrender of the nation's tangible and intangible assets to foreigners.

"The NCAA (Nigerian Civil Aviation Authority) should encourage Nigerian airlines to restructure their business models towards a better passenger boarding experience and comfort to enhance business competitiveness beyond 2025," they stated.

The body also urged the Minister of Aviation to update the nation's aviation policies and implementation strategies to align with current global aviation realities and advocated that the decentralisation, digitalisation and devolution of the industry's operations in preparedness for the anticipated aviation standards of 2025 and beyond.

"The ASRTI should continually champion research on pioneer professionals in each segment of the sector, and document them for historical purposes.

"Nigerian airlines should form alliances to develop and entrench commercial comparative advantage principles to enhance their survival beyond 2025. The government should continually ensure the provision of an enabling environment for the growth of aviation businesses to reduce incidences of the loss of Nigerian aviation professionals to other climes.

"The Minister of Aviation should direct a centralisation and harmonisation of aviation related infrastructure and data system as the industry approaches the future," the communiqué also stated.

ASRTI said it recognised the need to reinforce the foundation of the Nigeria's aviation sector to succeed beyond 2025 and regretted the demise of numerous private airlines and the failure of government to effectively manage airlines in the past.

It noted that this formed the basis for the meeting to advocate a less government intervention and involvement in the business and a relinquishment of control of the future to a business oriented visionary private sector.

Furthermore, ASRTI expressed lack of confidence in government plan to establish airlines, urging that this should be left for the private sector.

"To this end, NCAA should review upwards the conditions of establishing airlines that will compete effectively by 2025," the industry stakeholders under the aegis of ASRTI said.

"The nation's airports should be upgraded and positioned to attract businesses that will take the airports beyond being mere ports to centres of tourism and commerce, and widen airports revenue sources beyond airport fees, charges and taxes. To achieve this, the meeting advocated the concession of the airports.

"There is a need to give more attention to the downstream sector of the nation's aviation industry for the sake of the future, while also advocating the review of the compensation package for civil servants," the body, which called for more collaboration among government agencies and industry operators said.

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