Airlines won’t survive continuous fuel price hike –COO, Ibom Air - PUNCH
The Chief Operating Officer of Ibom Air and former Managing Director of the Federal Airports Authority of Nigeria, Mr Goerge Uriesi, discusses the prospects and challenges of the aviation industry, in this exclusive interview with Funmilayo Fabunmi
Some analysts have said that more airlines may suspend operations or go under if the current industry trend continues. Do you believe in this projection?
You know that things are very unusual now and everybody is struggling to stay on top of the game. Not that I expect that airlines will go down, but I will understand if any one goes down under the circumstances. This is because I know what we are grappling with here. It is hectic and almost ‘a touch and go’ situation because if the prices had risen to a particular level and we were grappling with managing that level, it would be a different game. But you wake up tomorrow morning, and they’ve added more money, meaning you don’t know how far it’s going to go. If you survive today, will you survive till tomorrow? So, eventually, at some point, our prayer is that, first of all, it stops rising so that we can say that this is the demon we are dealing with. However, if it keeps rising, there will be a breaking point for everybody. That’s the situation.
In your presentation at the just concluded League of Airport and Aviation Correspondents (LAAC) Conference, you said that the Nigerian system was set up to threaten airlines. Could you shed more light on that?
I didn’t mean ‘threaten airlines,’ I just said it threatens the ability of airlines to be productive because a lot of things, if done better, would allow airlines to have the availability of runways across the country as at when they want to use them. So, it’s not enough for an airport to say it has an instrument landing system, but is it working? If it is working, airlines can say they want to fly in and fly out. So, just saying that it is there does not make any difference because the bottomline is that the airlines can’t fly in when there’s a little bit of weather, and because of that, we’re unable to utilise our aircraft to the optimum. Therefore, we leave a lot of revenue on the table and that revenue for the airlines, if you look at it from the airlines perspective, is revenue for everybody because the airlines pay everybody from that revenue. It pays the airport, the ground handler, Air Traffic Control, the Nigerian Civil Aviation Authority and everybody in that ecosystem. So, every time the opportunity for an airline to operate is not there when it could have been able to operate, it’s just a loss of opportunity in terms of revenue for the ecosystem. I gave numbers, very conservative numbers, to show what it means on an annual basis for an aircraft when we’re unable to utilise the planes because of one failure in the system or another.
That leads me to the next question. At the same conference, you did say in your paper that the country’s carriers were losing an average of N4 million naira per flight, N360 million in 90 flights and N4.3 billion annually on every flight to sunset airport operations. In light of this, do you think the sunset airport would save operators from losing this much money?
No, let me correct that, I didn’t say airlines lost that money, I said that it is the potential revenue that airlines could not get because they were unable to maximise the use of their airplanes. It is not that they are losing it. If the aircrafts were utilised in line with the rest of the world, that’s the potential additional revenue they would have had and that would have made the system much more viable. So, it’s not losses, it’s not like you’ve made money and then you lost it. It’s just that you’re unable to pursue that potential revenue because of that and I did not say it was as a result of sunset airports. The theme of the conference was ‘Sunset Airports’ but the topic of my presentation was ‘Runway Availability’. So, they are two different things. I was saying that even in the day time when the runway ought to be available, when there’s small weather, it’s not available because the navigational aids that will help you land in lower visibility are not there. So, the airport might as well have been closed from a used perspective because it’s daytime, but because there’s fog and it’s harmattan, you can’t fly in. But if the navigational aids were working, you would be able to fly in and because you can’t fly in on that airplane, you wait and wait. Let’s say you have a morning flight and you’ve ‘rostered’ that airplane to do an 8 O’clock into Calabar and back, and after that you do somewhere else and and back. If at 8 O’clock, the weather is bad in Calabar and the aircraft is waiting, it can then become 9, 10, 11 O’clock. It will impact on the whole schedule for the whole day and then the sunset will then meet you at the end of it. So, you will now have to cut your flights because many airports will not allow you to come into the night to catch up on all those flights. So, it’s all a mixture of sunset, runway availability and all of those things I quantified by saying that the lost opportunity is this N4.3 billion per aircraft per year.
In view of this, what do you think the government needs to do ameliorate the challenges facing local carriers?
I said in the presentation that we should make sure that each airport has the right navigational aids for the weather pattern of that airport. Some airports need category one instrument landing and some need category two. It’s not just to install them as we normally do in Nigeria and then say it has been installed in the airport. Is it working? Those things need to be maintained; they need to ensure that they are working so that the airlines can rely on them and operate their flights on schedule. I gave the good example of Calabar. During the harmattan, Calabar is one of the worst-hit airport because every morning is foggy, but we operate normally in Uyo. If we fix the navigational aids, it’ll be very easy to fly into Calabar and out. You wouldn’t need to sit for more than the minimum. These are the simple issues. If we have the navigational aids working, then the runways are available all the time, especially during harmattan when our aircraft visualisation is forced to go down 50 to 60 per cent. We lose forty per cent when we are unable to fly into airports that do not have navigational aids to operate even in low visibility, which is something that is almost standard all over the world. So, those are the things that add up to preventing us from chasing those revenues I was talking about.
Why are foreign airlines not signing agreements with local carriers for the distribution of their passengers within Nigeria?
I don’t know for sure, but what I can tell you is that an airline will enter into an interlining agreement with another as long as that airline can relatively guarantee its schedules. So, you have to have a high level of schedule reliability, a high level of on-time performance so that when, say British Airways, wants to fly from London to Abuja and arrive at 5am, if they’re going to have an interline agreement with somebody to fly their passengers to Enugu and Uyo and all those places, they need to be sure that every time they book and deliver that passenger in Abuja ,you will catch the flight. But when they can’t guarantee that an airline will give them that kind of schedule reliability and on-time performance, then, they won’t take the risk of signing on with them. So, the onus is on our local airlines to establish a level of operational efficiency that others can rely on because interlining requires a level of predictability. I know that British Airways has a flight out of Lagos every midnight. If they enter into an agreement with me, can I deliver my passengers at 8pm. That, in a nutshell, is the difficulty of international airlines having local partners. On the other hand, the local partners are stifled from developing that level of efficiency because there are so many conditions locally that just make it so difficult to achieve the level of operational efficiency that an airline should have. So, effectively, an airline operating with operational efficiency is doing it against the tide. You have to run against the tide, you have very few things helping you, all the time you’re always surmounting obstacles. It’s almost like an obstacle to have schedule reliability and on-time performance. You have to negotiate an obstacle course because everything is an obstacle to that, whereas everywhere else those things just work like clockwork. We need to start removing all the obstacles to efficient operations, some of which I have told you already and there are others too.
In what way is the closure of the domestic runway affecting airlines. As a former FAAN MD, do you think the total closure approach was wrong?
I don’t want to pass a judgment. We have already mitigated that and discussed, so I think it’s in the past now. Our misgivings were expressed. I praise FAAN for responding to the airlines. We reached some good agreements. The consequences of it, though, is rather than just taxi to the domestic runway and depart or land and taxi back into the terminal, you now have to taxi all the way to the International runway and all the way back to domestic in the midst of massive increases in fuel. Of course, in addition to that, the longer taxing burns finish your wheels and your brakes faster than normal because you’re now doing long taxing and up and down, consuming more fuel. The fact that there’s only one runway now in Lagos means that sometimes when it is peak, you have to hold a little longer in order for you to land. So, as you’re waiting, your flights are longer and you’re burning more fuel. At the same time, sometimes when you’re departing, because all the traffic is on one runway, sometimes you wait for 15 minutes, holding for the runway to be available because so many aircrafts are coming. So, all those things have added significantly to the cost of operating out of Lagos, but that’s where we are. Having said all of that, I must praise FAAN for equipping fixing airfield lighting to the domestic runway, which is the best thing to happen to that runway in a really long time. It is a huge benefit to airlines into the future.