Nigeria: 2020 - Rising Hope in Aviation Sector

3 January 2020

Chinedu Eze writes that there are indications that 2020 may be a better year for the aviation industry in the areas of infrastructure, aircraft acquisition and improvement in passenger traffic.

There were three glaring challenges in the aviation industry in 2019. Firstly, it became evident last year that lessors were no more willing to lease aircraft to Nigerian operators. Secondly, there were too many flight cancellations and delays. These were attributed to weather, dearth of operating aircraft and poor airport facilities. The third challenge was that although there were no accidents, but there were serious incidents involving domestic airlines.

The consequences of these problems were far reaching. Refusal to lease aircraft to Nigerian airlines by lessors led to fewer operating aircraft, high cost of airfares and the inability of the airlines to cope with their flight scheduling.

Poor weather meant that travelers had to stay too long at the airport and sometimes flights were subsequently cancelled to sunset airports due to lack of runway light.

And serious incidents involving many of the airlines disabled the aircraft and forced them to maintenance hangars; thereby further depleting the overall fleet.

Year 2020

Naturally it is good to step into the New Year with good feeling and optimism, but there may not be fundamental changes that can bring radical improvement this year because in aviation progress is marked by process, which could be long term or short term but obviously processes are a continuum that do not recongise end of the year and starting of a new.

It is expected that price of aviation fuel will oscillate the same way it did in 2019. But the expectation is that there would come a respite when the Dangote Refinery becomes operational in 2021.

Aircraft maintenance will follow the same pattern, but there are indications that more aircraft may be maintained in Nigeria at Aero Contractors maintenance facility and new one that may come up before the end of the year.

While there may not be clear agreement between lessors and Nigerian airlines, unless the federal government steps in with assurance, the operators must find a way to acquire aircraft and there is hope that the new aircraft ordered by Air Peace will start arriving in 2020. The increase in fleet hopefully would provide the needed succour for robust airline operation.

In the area of infrastructure, it is hoped that the new airport terminals in Lagos and Kano will start operation this year. This will ease passenger facilitation, especially in Lagos and also provide comfort to travellers as they would be exposed to modern facilities in the new terminals.

Airspace

The Nigerian Airspace Management Agency (NAMA) is expected to complete many projects it started in 2019 this year. The agency almost completed work on Aeronautical Information Service (AIS) to ensure the flow of information necessary for safety, regularity and efficiency for international air navigation. The project will be completed early this year. However, the AIS equipment in Lagos has been installed; but the agency is working on the installation of similar equipment in six other places.

Similarly, the Federal Airports Authority of Nigeria (FAAN) is expected to reopen the Akanu Ibiam International Airport, Enugu this year and also plans to install runway lights in some of the sunset airports under its management.

Autonomy

THISDAY spoke to aviation industry consultant and CEO, Etimfri Group, Amos Akpan on expectations in the aviation sector in 2020.

Akpan, said the Director Generals and the Managing Directors heading agencies in the sector should be allowed more time and autonomy with their management to implement solutions to existing problems from their agency's perspective.

He noted that FAAN, NAMA, Accident Investigation Bureau (AIB), the Nigerian Civil Aviation Authority (NCAA) and the Nigerian College of Aviation Technology (NCAT) as presently constituted by the Acts that established them, have the capacity to turn around the industry.

"They need to implement their agenda for the industry. If they are allowed, the funds available in their budget would achieve results and we will see the effects.

"Regular maintenance of existing infrastructure and continuous training of personnel will cut wastages, keep our facilities functional and make us reliable.

"Imagine a scenario where the entire airport is all lit, the bulbs are promptly replaced. It would be difficult for an activity in the apron to go unnoticed," Akpan said.

Corporate Governance

He said investors and managers of Nigerian airlines should imbibe and inculcate corporate culture in managing their airlines; otherwise, they would not be able to avoid bogus public relation expenses; urging them to also avoid diverting funds from their airline's sales into non-core ventures. He said discipline, focus, and innovation are the critical ingredients needed to remain in the business.

"The commercial banks need to reevaluate their approach to airline projects. Money from an airline should be programmed to flow in over a realistic time frame.

"Realistic monthly income spanning five years to 10 years will allow room for both the airline and the bank to pay for current running cost. Most important here is to keep the operations ongoing at times in that period.

"It does not help the bank and the airline if they enter into a funding arrangement that has 80 per cent failure possibility. Both parties can structure a win - win plan.

"The minister of aviation should give attention to maintenance repair and overhaul facilities. Existing capacities in this regard should be examined with the view to growing them. If aircraft are maintained in Nigeria, if there are workshops to repair spare parts and put back into service in Nigeria, then the cost of operation will be reduced. Reduced cost means profit, profitable airline have the resistance not to cut corners, and safety is guaranteed," Akpan said.

Airport Facilities and Service

The Managing Director of FAAN, Captain Rabiu Hamisu Yadudu said that in 2020, the agency would revamp decaying facilities at different airports in the country under the agency's management.

"We do know we have a lot of infrastructure and equipment all around Nigeria. It is clear to us that a lot of our equipment and infrastructure are dilapidated, and we have been working to resolve all issues, from the smallest to the biggest. An Example is Enugu Airport."

Continuing, Akpan said he expects an improvement in airport facilities and services rendered to passengers in 2020 by FAAN.

"Just to remind us that aviation in other continents have moved on. Airports have achieved 100 per cent self-check in services. Aeroplanes land in zero visibility. Non-compliance to regulations is detected by remote monitoring.

"Accident investigation bureau covers air, sea, rail and land transport. Manpower training now concentrates on managing flying machines without pilots on the flight deck. Maintenance is based on diagnosis with 95 per cent accuracy than on trial and error, trouble shooting. Security checks and profiling of passengers and cargo is function of available database that is reliable," he said.

Maintenance

Akpan expressed the hope that government would show greater support to maintenance facilities being developed in the country like the Aero Aircraft Maintenance, Repair and Overhaul (MRO) owned by Aero, adding that government in addition to what Aero has, should make conscious efforts to establish modern maintenance facility in the country.

"Beyond the Aero facilities, there must be conscious steps to create repair workshops in Nigeria. There are skills in Nigeria that can do what I see repair workshops do in South Africa and America. Those willing to invest in tools, training of technicians, and certification should be encouraged. Nigeria Airways had workshop that was functional so it is not new in Nigeria.

"Collaboration between NCAT and manufacturers should develop useful technicians training curriculum in this regard. Whatever must be done should be done to have flight-training simulators relevant to most aeroplane types flying in Nigeria. Pilot's recurrent training outside Nigeria is a huge cost to airlines.

"We know that 65 per cent of the commercial jet operation is Boeing 737; 15 per cent is (Embraer) EMB 145-90; 10 per cent is CRJ and the rest aircraft types share 10 per cent. It is easy to determine the two training prototype to invest in. It cost about $18,000 per pilot, and it must be performed twice a year per pilot.

"If you add the theory of refresher on operations and crew resource management, this will make a profitable business unit on its own. The argument that our pilots in the regulatory agencies frustrate the establishment of one is faulty. Accessibility to recurrent training benefits the pilot more because it gives him job security.

Leasing

Akpan noted that investment funds and aircraft lease issues has to be addressed.

"Nigerian operators have not performed creditably in the past on repayment of loans and honouring agreements on aircraft lease. We should stop giving excuses for breaking financial/equipment lease agreements. We should retrace our steps. Do not sign an agreement when the odds are against you especially in our type of environment. Do not borrow money with unrealistic non-implementable feasibility or cash flow projections.

"You must understand and capture every thread of possible outcome: Multiple taxation, high cost of aviation fuel, unstable foreign exchange regime, 95 per cent foreign input to cost of operations, planned and unscheduled maintenance, political environment, and human resource issues. The key is to know you will be judged by industry's global standard, not by Nigerian standard," he said.

Akpan, however noted that the potential for the aviation industry in Nigeria remains untapped. According to him, aviation business in Nigeria has many areas that are yet to be explored.

"When I hear people talk about Ethiopian Airlines, or Ghanaian aviation, I feel they need to know more about our industry. If Nigerian aviation grows Ethiopian and Ghana will become appendages to Nigerian aviation.

"Check the traffic Nigerians give to Ethiopian and Ghana in a year. British Airways will feel the impact of our growth. South African aviation will actually shrink if our aviation industry grows because of the volume of transaction with us on training, maintenance, and leases," he added.

It is hoped that 2020 would provide a platform for a new trajectory in the industry. Among the aviation agencies, it is expected that that there would improvement in air safety, security and possibly, as FAAN Managing Director noted, more airports might be certified by NCAA this year.

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