Nigeria: Nuhu - NCAA's Autonomy Has Guaranteed Effective Regulation

28 September 2020
interview

The Director General of the Nigerian Civil Aviation Authority, Captain Musa Nuhu, in this interview says the regulatory agency has been able to efficiently regulate the industry because of lack of interference in its regulatory functions. Excerpts:

Many industry stakeholders said the Nigerian Civil Aviation Authority (NCAA) has lost its autonomy and is now controlled by the Ministry of Aviation. What is your take on this?

Yes, NCAA has autonomy in terms of regulations but NCAA cannot totally remove itself from the Ministry of Aviation. The Ministry is responsible for policy development for the industry and we implement those policies through our regulations. So we must have a line of communication and consultations with the Ministry and also if you look at the organizational structure of NCAA, we have the Minister, the board and then the Director General, so we cannot totally isolate ourselves from the Ministry but l can assure you in term of implementing regulations and otherwise, NCAA is the only body that is doing that and we are doing that without any interference from the Ministry. There are some regulations that will be difficult to implement without the political support of the Ministry. In the past, when aircraft are grounded, the owners, usually highly placed, went over above the Ministry, they even went to the Presidency and have those decisions taken by NCAA reversed, but this time around, it is not so, we implement our regulations irrespective of who is involved and with the support of the Minister, the political support has made our work easier within our regulations.

So anybody that wants us to divorce completely from the Ministry is not being realistic, it is the Ministry of Aviation. Aviation goes beyond NCAA; we have other public service providers like the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA), the Nigerian Meteorological Agency (NIMET), Accident Investigation Bureau (AIB) and the Nigerian College of Aviation Technology (NCAT), Zaria. Then there is the private sector, airline operators, ground handlers all under the Ministry. We regulate them, so there must be some connection between the Ministry and us. You cannot say because we are independent in implementing regulations, we must not have some relationship with the Ministry. It happens everywhere in the world. In the US, the FAA (Federal Aviation Administration) has some connection with the Department of Transportation (DOT). What is important is for the regulatory body to be able to do its statutory responsibility of effective oversight of the system without interference and we are doing that.

What is the economic health of Nigeria's domestic airlines?

The economic downturn of airlines is not only in Nigeria; it is a global thing. In the airline industry, the profit margin is very minimal, if you make five percent profit margin in the business, you are considered to have done excellently well, but however, with the COVID-19 and the difficulties, airlines financial positions are not the best, it is a global phenomenon and there are so many other issues that affects the financial health of airlines that is neither in the control of the Ministry of Aviation nor in the control of the civil aviation regulatory body.For instance, the provision of foreign exchange does not come from us. If a country's foreign earning goes down, the central bank prioritizes, and you can understand due to the lack of aircraft maintenance organisations in Nigeria, pilot recurrent training institutions in Nigeria they have to go outside to do these and that entails a lot of foreign currencies, so it is not easy.

Also is the issue of the availability and cost of Jet A1 (aviation fuel), which is a major factor that airlines have been having difficulties with. Sometimes we see induced scarcity and escalatory price, so there are factors that affect the health of the airlines that are not in our direct control. The Ministry has tried; it went to the Central Bank of Nigeria (CBN) when this government came on board. Then Nigeria owed foreign airlines about $600 million in arrears, the Minister through consultations was able to get that off our back and all the foreign airlines were paid. We visited the Nigerian National Petroleum Corporation (NNPC) to see what kind of arrangement can be made for the production of Jet A1 and in addition, there is the challenge of interest rate.

When airlines go borrowing at a very high interest rate, which we know is very high in Nigeria it affects their profit margin. If my profit margin is 5 per cent, explain to me if l takes a loan at 20 per cent interest rate, how I can break even and pay the bank and make profit? So these are the micro and macro factors that affect the health of the airlines. We try through our economic regulations to do the financial audits of the airlines and advise them where we see areas of economic difficulties and see how they can be tackled. One of the things we are doing is that we want to really strengthen the function of the economic regulation through more training of the staff of the directorate. As you are aware, we are having some restructuring going on, it is to reposition the regulatory body to be able to carry out its responsibilities in a more effective and efficient manner.

In line with the Oronsaye Report, there were plans to merge NAMA and NCAA. What is the update on this plan?

I read the report in the papers the same way you did, nobody has informed me of any merger. I have enquired from the Ministry if there have been any confirmation of that. I understand this is an old report done over ten years ago, somebody just sat down and brought it out. I am not aware of any merger between NCAA and any agency and I cannot comment on what seems to me an unofficial matter. And by the way, in the US, FAA is the regulatory body and it runs the air traffic services, which is the equivalent of NAMA, so it depends on how you run it. I am not saying we are going to do it here because I don't have anything official; but there is this misunderstanding that there is something like that, no Sir. FAA has a specific structure design in its own case to ensure that there is no conflict of interest. I am not aware of any merger in Nigeria because I have not been given any document officially.

Some Nigerian airlines that planned to operate into some countries said they faced hostility, none or delayed response by some of the countries. Is there any way NCAA can tackle this problem?

The advice I will give the airlines is this: if you are going to another country to negotiate your services, you should involve the regulatory body, the Ministry of Aviation and also Nigeria's embassy in that country. If you as a private organisation you go and negotiate with a government entity that is trying to protect its own airlines, you are going to run into difficulties, but if you involve the Ministry of Aviation officials, NCAA officials and embassy officials, the country would know that if they make things difficult for our airlines, we will apply the same reciprocity measures to their airlines, so it makes a big difference.

But a lot of airlines go and do the deal themselves. They should involve us, carry us along, brief us; we are here to help our airlines grow both domestically, regionally and internationally. I hear them talking about aeropolitics, yes, an airline from Nigeria want to go compete with an airline of another country on their route; of course, they will make it difficult for you but when you carry NCAA officials along, it make a difference, if you make unreasonable demands on my airlines, I will apply the same to your airlines coming into my country, so it is to the benefits of our airlines to carry everyone along to come out with good terms for all the airlines.

You took over at the cusp of Coronavirus pandemic. How is it affecting your job as Director General of NCAA?

The meeting I had after my hand over from the acting Director General, the discussion I had was on COVID-19, by then it was not yet declared a pandemic but we could see the trend coming, so we had started putting measures in place, firstly, how we are going to run the NCAA as an organisation and business continuity plans put in place; how our staff would be working with the development to ensure that whatever happened, we would have people that would be running the organisation regardless of the COVID-19 challenge. We ensured we had somebody who would step in, we prepared to reduce the workforce coming to the offices, a lot of them would stay at home and we have what we determined was enough that would run the organisation. We were already working on that when the government came out with the directives.

Basically, at that time, it was the issue of survival, whatever plans had to be put in place, because whatever plans you have, if you didn't survive, your plans were of no use. First of all, we have to survive, ensure the organisation survives, and to put measures for the industry to survive, it certainly delayed our plans but now with the successful resumption of domestic flight and we have not had a significant spike and contamination cases, so all the plans have been delayed but we have successfully resumed the domestic operations, perhaps one or two minor hitches there, nothing significant, and I know you will all agree with me that it is so far so good and the response from the public complying with the protocols have been excellent.

We started the international flight operations, with time we are going to increase the number of flight coming in as things stabilize. We identified hitches that were rectified and we hope things will get much better going forward. So part of the plans we had is repositioning the regulatory body to make it leaner, more resilience and a body that is flexible to react to changing situation and part of the restructuring we have had is part of this process and in the coming months, we will see the organisation in a good position to deal with challenges and the emerging challenges and as you are all aware, the COVID-19 has changed the global industry. The rapid changes in technology is also changing the industry, not only aviation but also the ways businesses are conducted, so we have to reposition ourselves to fit into that so that we can really effectively conduct our regulatory responsibilities.

Has any of the countries whose airlines were barred from operating into Nigeria, approached the NCAA for negotiation?

I as the Director General of NCAA, I am not aware of any approach by any of these foreign countries. They might have been approaching the Ministry of Aviation or the Ministry of Foreign Affairs and they might also be contacting PTF on COVID-19. I am not aware of any but I have heard a lot of complains but no country have approach NCAA for this.

Why did NCAA scrap its Consumer Protection Directorate?

I think there is a misunderstanding. Consumer protection has not been scrapped; it was just downgraded from a full directorate to a unit under the Directorate of Air Transport Regulation, which is what it used to be. Consumer protection exists in full with all the function it has, so we still have consumer protection. It has never been scrapped. If you go to the airports you still see the staff from the unit carrying out their job without any reduction in their scope.

What is the update on the impounded aircraft in Dubai, which is being operated by a Nigerian airline?

It is not a Nigerian aircraft; it is a US registered aircraft that was brought to Nigeria to operate under the AOC (Air Operator Certificate) of Nigeria. We have started investigation and forwarded the documentations from our investigation to the authority in Dubai and the US FAA. They asked for additional information, which we have given them and I think I saw an email from Dubai, communicating with the US where the aircraft is registered. We have done our own part and our report has been submitted and we are going to take sanction against those who have violated our regulations. That is all I can say for now.

Is the NCAA better off with the merger and reduction of directorates?

In fact that is the whole idea of the reduction of the directorates, to make it a more resilient, more flexible and a much more effective organisation in the conduct of its oversight responsibility of the industry. Also we have to take cognizance of the changes in the global world aviation industry both caused by the Coronavirus and the rapidly changing technologies, including information technology; so certainly, yes; l see that.

What strategies do you advise airlines should adopt in order to run successful operations?

Each airline has its own business model. In running an airline there could be a number of issues that can impact on the business. One of these issues is corporate governance, which is the separation of ownership from the day-to-day management of the airline business. For a lot of airlines in Nigeria, that is a very blurred line because there are no definite guidelines separating the owners of the airline from it management. Over the years it has contributed to the difficulties and challenges a lot of airlines have. But once the Civil Aviation Act is passed by the National Assembly and we have a new mandate, we intend to look at that regulations. We may also work with the Corporate Affairs Commission.

We will sit down and see how we can apply some of these corporate governance issues in our regulations, strictly and resolve some of these difficulties we have been facing. One of the things we are going to do is that the Directorate of Air Transport regulations will be empowered and also enhanced with skills and knowledge to really study the business models and plans of airlines and see how effective they can be and we can have a more positive regulatory function. We are doing it now but I believe we need to build more capacity in that department.

Has NCAA been intervening on labour issues, as there is growing loggerhead between airlines and their personnel over welfare?

The challenge of financial health of airlines is not peculiar to Nigeria, gentlemen. It is a global thing. The airlines that have received billions of dollars of subsidies from their nations' governments are still laying off hundreds and thousands of workers. The entire travel and tourism industry has been greatly impacted by the COVID-19 in a negative way. Airlines have had to sack people in order to save cost, even the major airlines. British Airways is reported to have plans to lay off a third of its workforce, that is about 10 to 12 thousand people, Lufthansa is going to ground all its entire airbus A380 fleet and its Boeing B747 fleet. That is a significant number of redundancies. Emirate has laid off people, likewise Etihad and in the US the same scenario plays out.

Let us not make it a Nigeria thing but rather see it as a global challenge. I know the policy of the government through the Minister of Aviation is working to see if some king of palliatives can be given to the airlines. On the issue of relationship between management and the unions, on Monday (last week) Arik Air had issues with members of the unions who barricaded the airline's headquarters. We had some fruitful discussion and we had some kind of mediation between the Receiver Manager of the airline and the unions. We all agreed that they are going back to sit and discuss again. They will take each other's concerns into considerations and the union members have to understand the very precarious financial situation of Arik Air and other airlines.

The Minister has also had meetings with various airlines and the unions trying to settle similar challenges. We are working hard to see how we can maintain industrial harmony while resolving these challenges.

Telecom companies have been having issues concerning height clearance with NCAA. What is the situation now?

Height clearance is a regulatory function of the NCAA, which is in our regulations that has been signed and passed by the government. We are dealing with all the communication companies. We are in contact and we are having deliberations with them. Some of them have made part payment and we are working toward getting the remaining payment. Part of our statutory responsibility is to identify obstruction within and around the airports. In the past, there is all kind of erected masts constituting obstructions all around and we directed them to come to us to obtain a height clearance certificate. We are not using it to rake in money; it is based on cost recovery. These masts have constituted a lot of safety hazard for us. We are trying to do a better job to prevent accident by this oversight. Currently we are building a database called the electronic terrain and obstacle database. If we can implement it and go live, that will enable the federal government helicopter to fly at night. We are trying to capture all the obstruction that is out there because everybody flies.

How has your experience at the International Civil Aviation Organisation (ICAO) and under the Nigerian and past President of ICAO Council, Dr Olumuyiwa Aliu's influence on you contributed in enhancing your job as the Director General of NCAA?

It was a rare privilege to be nominated and to serve on the ICAO council as Nigerian representative for about three and half years from 2016 to end of last year, it was an amazing experience. I don't know how I can explain it. ICAO Council, which is the governing council constitute of 36-member states, which are elected every two years. Nigeria has been on that council nonstop since 2016, members come from different background, some have been ministers in their countries, retired generals, career ambassador and Director Generals and you have people like me who are technocrats from the industry.

Generally, Nigeria has always been represented by people from NCAA. You got to meet and discuss with people from corners of the world and you see the same problem, everybody has his own solution and ideas; we had our disagreement and agreed on issues. On the Council, we have eight members from Africa, we have the Afri-group where we sit down to strategise to protect and promote the interest of the Africa continent. Before I left I was the coordinator of that group. We were able to achieve a lot for the benefit of Africa. Dr. Aliu was the representative of Nigeria for about eight years from where he was elected president of ICAO. He was also a director in NCAA when he was sent to represent Nigeria in the council of ICAO. I was blessed to have something like that, having gotten into the Council with little knowledge of the working of the council.

Once in a while when I have issues I went to him and he would refer me to document to go look at. He had a good influence on me and I appreciate it and I was lucky to have a Nigerian as the President of a global organisation like ICAO; it is not easy. Also at the other end, everybody expecting me to perform like Dr Aliu, you find people like him once in a lifetime, there is no way I can fill his shoes, they are too big for me.

Can airlines no longer in operation benefit from the government's planned palliatives for operators?

What I can guarantee you is that anybody can apply, it is their right, whether they are functioning or not, but the issue of palliatives is a policy of the federal government being driven by the Minister of Aviation and they have their guidelines and one of it is that you must be a functioning and performing airline before you get any palliative. That is all I can say. If you don't have an AOC, the Airline Operators of Nigeria (AON), I believe, also have their guidelines; they are also part of the input and know who and who will get these palliatives from the guidelines. I don't expect them to put airlines that are not functioning into that list. I can guarantee you from the government side, if you are not functioning, forget it, you can try your luck, it doesn't mean you are going to get it.

Some time ago there seemed to be loggerheads between NCAA and AIB over job description. I hope that matter has been put to rest?

I don't know about the loggerheads between the AIB and the NCAA. There must be some misunderstanding of misinformation. If you have been following the trend, a couple of weeks ago we met with AIB we sat down, we spoke, we had a committee that had been in existence between the two agencies. We reignited the committee, the Commissioner and I met and spoke on common grounds of interest and collaborations. We pledged to work together.

AIB is in charge of accident investigation. Its responsibilities are clearly defined. NCAA is the regulator. If there is an accident, they are an independent body saddle with doing the investigations. AIB is independent so that it can be free to investigate accidents. There could be some cases where the regulator could be indicted for inaction or negligence and the Bureau will expose it. That is why it should be independent from the regulator.

In the US you have the National Transport Safety Board (NTSB) which many times has indicted FAA in accidents, so, that is why we have this separations so that AIB can do its investigations and make recommendations and when they do, our committee sits down to implement them. We might review them; the report is submitted to the Minister and NCAA implements.

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