Shock snowballed into anger at the at Murtala Muhammed Airport II (MMA2), Lagos, last Wednesday, after Aero Contractors’s unexpected decision to close shop temporarily in the latest incident of airlines winding down their operations in the country. Apparently frustrated by low patronage, and in the wake of the new CBN forex policy that has cost foreign airlines an estimated N64 billion in losses, the National Association of Nigeria Travel Agencies (NANTA), warned its members were considering relocating to Ghana, where their policies are consistent. No fewer than 15 airlines have withdrawn their services from Nigeria on account of the economic recession. The airlines, including United Airlines, Air Gambia and Iberia are among the 50 that operated the Nigerian routes some months ago. Unfortunately, the fleet capacity of local carriers like Arik and Medview is too low to accommodate the traffic. That being the case, it is proper to ask if with the shrinking number of scheduled commercial operators for technical or other reasons, there would ever be respite for the travelling public!
Although the Nigerian Civil Aviation Authority (NCAA), has decide to play the ostrich by refusing to admit that gravity of the situation, which now seem to have past crisis point, NANTA has blamed the current nightmarish experience the airlines are facing on the inconsistent policy of the Buhari administration, particularly naira devaluation. NANTA President, Bankole Bernard disclosed that travel agencies that sold about $1.4 billion worth of air tickets in 2015 have been recording losses as many more airlines quit Nigerian routes. The government last year introduced a fiscal policy through the CBN, restricting access to forex and funds transfer out of Nigeria. In the process, the International Air Transport Association (IATA) estimated that no less than $800 million belonging to foreign airlines was stranded in Nigeria. With devaluation, the $800 million from ticket sales when the exchange rate was N197/$1, was taken out of the country at the new rate of N320/$1. Consequently, for every $1m repatriated under the new policy, the airlines lost at least N80 million.
Aviation sources estimate that Delta and United Airlines have up to $180 million hanging in the Nigerian economy, while Air France-KLM is estimated to have over $150 million. British Airways has about $100 million, while Iberia, which had already withdrawn its services, has $5 million of its funds trapped. Foreign airlines remained a major stakeholder in the aviation industry, accounting for about 90% of air passenger traffic and for some airlines to lose up to 50% of their funds due to the forex policy, is completely unacceptable. Already, pilots and aeronautical engineers trained in the country are unfit for employment as a result of the unavailability of aircraft needed to practicalise their acquired knowledge.
Worried by the departure of foreign airlines from Nigeria, the Senate plans to summon Aviation Minister, Senator Hadi Sirika, with a view to finding lasting solutions to the problems of the aviation sector. This is laughable, were it not so pathetic! Have these Senators just woken up to realize the rot in the aviation sector? This is no time for rigmarole, which is what the planned hearing will be. That is not what Nigerians desire at this time as it amounts to an assault on the collective psyche of all citizens.
Over the years, the aviation sector has appeared too ridden with corruption with all the internationally accepted best practices in suspension. Too many questions hang over too many things: the award of concessions, the disbursement of intervention funds meant to improve the sector, the employment or summary dismissal of personnel, conscientious enforcement of rules by the regulatory agencies, the renovation of facilities, and the wasteful spending such as buying armored luxury cars for high officials even as some airports lack up-to-date equipment. It is no wonder that, in a manner of speaking, the sector is never firmly airborne but remains grounded.
Some points must be made in regard to the crisis in the aviation sector. First, Nigerians deserve an explanation for the inconsistent government policy somersaults that has engendered the current crisis for two reasons: in a democracy, it is a right due to the electorate from the elected. Second, it can be the Senators were living in another planet and just came back to Nigeria. If so, then all they need to do is to dust up the reports of past legislative hearings on the aviation sector. It bears repeating: Nigerians have a right to know how their country is run.
Besides CBN forex policy that has poisoned the enabling environment, the local aviation industry had been embroiled in a controversy on the propriety of the imposition of $4000 and $3000 tariffs per trip for foreign registered and Nigerian aircraft imposed by the NCAA on non-scheduled commercial airline operators. While businesses are bound to pay legally sanctioned taxes or tariffs, it is inconceivable that government would deliberately inconvenience citizens through imposition of high tariffs, or make it difficult for service providers or companies to operate. Nigeria cannot afford the luxury of its citizens travelling first to a neighboring country to catch flights on account of cheaper rates. In this case, there ought to be equilibrium on airfare tax ratio. A plethora of taxes on service either by governments at various levels, which impact, is eventually transferred to consumers is unacceptable.
The government must stop giving the impression that foreign airlines are being witch-hunted in the country. Their service to those who have the means is essential. The present quagmire was avoidable if the government had set out to find common ground to resolve the problem of forex crunch, which prevented foreign airlines operating in Nigeria from repatriating the stipulated five per cent profits. Huhuonline understands that the airlines had insisted on making payments in naira equivalent, but constitutional provisions prevented them from doing so; raising questions as to why the National Assembly failed to intervene by amending the relevant laws in this regard. This is more so at a time when government revenue is said to be dwindling and juxtaposed with the series of air mishaps that have recently claimed many lives; and the failure to ensure safety of air transportation, the extent of government’s contempt and disdain for its citizens becomes obvious.
Amongst the numerous problems bedeviling the sector includes the shortage of aviation fuel which remains a major problem in Nigeria. In spite of the country being an oil-producing one, it is embarrassing that airlines get their products from neighboring countries. Notwithstanding government’s clarifications, the implications for the aviation sector seem to be having dire consequences on the industry, especially in the transport sector as is being witnessed in the maritime sub-sector (forcing diversion of ships away to Cotonou in Benin Republic). The present challenges faced by the aviation sector make it imperative for relevant agencies to re-evaluate their policies going forward. The greatest fear, however, is compromising the maintenance of aircraft by the stressed operators and the safety of the flying public. What the time calls for is a comprehensive overhaul of the aviation sector to inspire confidence in the flying public.
