Market News

By Wole Oyebade

President Muhammaudu Buhari was clearheaded in his plan for the air transport sector, for which he appointed an aviator as minister – the first ‘round peg in round hole’ in the 95-year history of aviation in Nigeria. Eight years after, not only has the uneasy tenure failed to deliver on Buhari’s core promise of a new national carrier, the much-vaunted airport concession plan, aircraft leasing agency, maintenance and repair organisation, new airport city projects, aviation university, new condition of service for workers, among others, have plunged the critical sector into turbulence, and blighted achievements in the areas of safety, infrastructural uplift, and revised regulatory framework. Stakeholders reckon that landmines and tough decisions await the next administration. WOLE OYEBADE reports.
 
President Muhammadu Buhari made a solo pledge to the aviation community pre-2015. It was to deliver a befitting national carrier in the status of Nigeria Airways in its heydays.
 

Six months into the administration came Captain Hadi Sirika as Minister of States for Aviation, and later, a full-fledged Minister of Aviation. Like Buhari was to the presidency, Sirika was perceived as a breath of fresh air to local aviation administration. He is the first insider to lead the pack, and also turned out to be the longest serving Aviation Minister in the country.
 
Shortly after his confirmation in 2015, Sirika did hit the ground running with the Aviation Roadmap agenda. At the top is the new national carrier that Buhari promised, followed by the plan to concession airports for efficiency. Also, a Maintenance Repair and Overhaul (MRO) facility, and aircraft leasing company to service local operators. In addition is the creation of aerotropolis at major airports nationwide, among 15 other components of the “aviation transformation and modernisation plan”.
 
Fast forward seven years later, findings by The Guardian showed some improvements in major airport infrastructure, navigational facilities, and regulatory framework across the agencies. However, most dominant is the gross underperformance of key deliverables in the Aviation Roadmap initiative, with implementation rate still running at 20 per cent, contrary to high appropriation rack up over the years.
 
More disturbing for aviation stakeholders is the opaque nature of the project implementations, dodgy policy directions, and oddly familiar absence of transparency in the mix.

Progress, against all odds
Indeed, it was a chaotic era in which two major events of devastating proportions hobbled aviation growth globally. COVID-19 happened and shattered all plans and projections by cutting off air transportations for months. Shortly afterwards was the Russo-Ukrainian crisis that disrupted energy supplies, which is one of the major operating components of the air transport sector.
 
Indeed, it was an era when the U.S. Dollar – the currency of global aviation business – ballooned to N950 against the Naira on the black market end (the most reliable source for forex!). Aviation fuel also hit the N1000/litre mark. Local air travel buckled at the sight of a N200,000 ticket for a 55-minute one-way flight. Operators lost 70 per cent of fleet capacity and some distressed airlines closed shop. Foreign airlines were also hit over stuck funds that climbed to $800 million – the highest in the world after Venezuela. It was an industry in unprecedented disarray!
 
In between, the air transport sector in Nigeria recorded some cheering moments. Despite the chaos, the industry proved its resilience to weather shocks. Notably, airlines managed to stay in business with new ones coming onboard. Regulators were firm and kept tabs on the safety rules. Service providers also improved on some airports, and aeronautical services got better nationwide.    

Specifically, infrastructure got a significant boost with the eventual opening of the Chinese new terminals in Abuja, Port Harcourt and Lagos – all of which started before 2015. Similarly, Abuja airport got runway rehabilitation. Murtala Muhammed Airport (MMA) in Lagos restored Runway 18L lighting and night operations after 14 years of blackout. The airports also got 10 new fire trucks at a whopping cost of N12 billion. 
 
The Nigerian Airspace Management Agency (NAMA) was very busy deploying advanced Instrument Landing Systems (ILSs) across nationwide airports to enhance night operations and safe flights even at low air-to-ground visibility.
 
Besides the upgrade of ILSs, the controversial Total Radar Coverage of Nigeria (TRACON) and Safe Tower facilities also got new equipment, all estimated to worth N36 billion. Similarly, the agency got two mobile state-of-the-art control towers at the cost of N1.7 billion.
 
Passenger traffic also rose from 12 million to 16 million as of 2022. The airline operators felt the positive impact in the removal of Value Added Tax (VAT) on aviation equipment, the COVID-19 palliative of N5 billion, and recent push back on aeropolitics.
 
Conspicuously missing on the roll call of achievements, however, are the deliverables contained in the Aviation Roadmap of the President Muhammadu Buhari-led administration.

Nigeria Air took off, landed in court 
Perhaps one of the biggest flops of the era is the handling of the national carrier project vis-à-vis the embedded ‘national’ over private interests.
  
Having been prepared as a worst kept secret, the national carrier project got off to a shaky start with the controversial christening and unveiling of the logo at the London Farnborough Airshow in July 2018. The launch was meant to draw foreign investors ahead of the December 23, 2018 commencement of operation.
 
Back home, the project soon ran into budgetary constraints, as it had no place in that year’s budget. The December 23 take off was aborted. But from 2019 to date, budgetary votes have continued to mount for Nigeria Air.
 
By 2022, the national carrier had racked up to N14.65 billion, out of which N6.25 billion was penciled for working capital, consultancy and transaction advisers’ fees. The minister said only N400 million had been approved out of the lump sum.
 
For the 2023 budget, another N1.3 billion, with N700 million as ‘working capital’ and N200 million as consultancy fee, also went to the national carrier for which the government was meant to own only a five per cent stake.

In November 2022, after five years of foot-dragging, Ethiopian Airlines (ET) – the biggest African carrier – got into the narrative as the “preferred” technical partner ahead of the December 2022 take-off date (the fifth that had been proposed). ET was actually the only airline that showed interest in the globally publicised invitation to bidders!
 

But unimpressed by the alleged tacit “giveaway” of Nigerian national carrier to fellow African competitor, local operators approached the court, technically throwing spanner into the works of Nigeria Air.   
 
A Federal High Court sitting in Lagos, in November ordered all parties involved in the proposed national carrier to maintain the status quo, effectively truncating the December take-off date as pledged by the minister.
 
The court gave the order upon receiving the application of Airline Operators of Nigeria (AON), urging the court to stop the national carrier deal and withdraw the Air Transport Licence (ATL) already issued to Nigeria Air by the Federal Government, through the Nigerian Civil Aviation Authority (NCAA).
 
Operators, like Air Peace, United Nigeria, Azman, and Top Brass, claimed that the firm that served as Transaction Adviser for the transaction was incorporated in March, last year, and alleged that the company was linked to the aviation minister. The local airlines further alleged that the ATL issued to Nigerian Air did not pass through normal security clearance.

Concession of major airports amid controversies
In 2016, the Federal Executive Council (FEC) approved the concession of airports in the country, beginning with the big four in Lagos, Abuja, Port Harcourt and Kano. Not until last year did the Minister announce the preferred and reserved bidders for the concession of three major airports – Lagos, Abuja and Kano.
 
The process has also not been spared of controversies. One of the bidders for the Murtala Muhammed International Airport (MMIA), Lagos, Sifax Group of Companies Limited, has filed a suit seeking disqualification of two preferred bidders – Tav Airports Holding Company and GMR Airport Limited.
 
Similarly, aviation workers’ unions have registered their displeasure against the Federal Government’s plan to concession four major international airports, coupled with the new agenda to demolish aviation agencies’ offices in Lagos.
 
The workers, under the aegis of National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and the Association of Nigeria Aviation Professionals (ANAP), said details of the concession plan have shown it as self-serving and anti-Nigeria.

Aircraft leasing company, MRO, aviation varsity
This week, at the Extra-Ordinary FEC meeting presided over by Vice President Yemi Osinbajo, the government ratified the establishment of a leasing company, a vital component of the aviation roadmap, which would allow existing investors and new entrants to lease equipment at affordable rates.
 

Sirika highlighted the significance of the aviation leasing company, stating, “Today in Council, something very significant happened in the world of civil aviation. Part of our roadmap, the aviation leasing company, has been established and approved by Council.”
 
An elated Sirika said: “So, I’m glad to see the full business case has been approved by the FEC. So the roadmap is gradually coming to 100 per cent completion. Therefore, entrepreneurs and civil aviation will have access to lease equipment at affordable rates within our country, Nigeria, and this is part of our roadmap.”
 
While there is no mention of the Maintenance Repair and Overhaul (MRO) facility at all, Hadi Sirika last year assured that the Federal Government was committed to setting up a University of Aviation which will commence on September 26, 2022.
 
He said President Buhari had concluded all the necessary preparations for the establishment of the African Aviation and Aerospace University in Abuja. Sirika said the institution, which would be the first of its kind in Africa, will commence with 20 pioneer students with a BSc in Aviation Business and BSc in Meteorology in view and by 2023, the University would start an MSc in Air Transport Management programme.
 
“For this year’s (2022) academic session, we are going to start BSc Aviation Business and BSc in Meteorology, then each of the courses will start with 20 students for now and by 2023 the University will start MSc in Air Transport Management,” Sirika had said.
 
Just yesterday, the minister announced that the commencement date of the university has been shifted till September 2023 – four months after the expiration of the President Buhari-led administration.

Performance rating: Poor
But the minister has given a verdict of 100% delivery of the aviation road map – without the takeoff of the national carrier, airport concession (despite endorsement of bidders), MRO, airport cities. Fillers from the stakeholders did not agree with his self-appraisal.
 
The Aviation Safety Round Table Initiative (ASRTI), in a recent poll, scored the President Muhammadu Buhari-led administration’s performance in the air transport sector only six per cent success rate in over seven years.
 

The rating was benchmarked on key performance indices like the aviation roadmap, critical issues identified by the stakeholders and recommendations made to the government since assumption of office.
 
ASRTI, a think-tank group, estimated that only six per cent of the agenda has so far been implemented successfully; 42 per cent still in the progress, while 52 per cent others remained unscratched in almost eight years.
 
Aviation Security Consultant, Group Capt. John Ojikutu (rtd) noted that there are about 12 items in the minister’s Roadmap, “but none of them seems to be up to 20 per cent in completion”.
 
Ojikutu noted that the 16 million yearly traffic would not even qualify as an achievement. “The Vision 2020 projected 20 million passengers traffic by year 2020 but unfortunately, in 2019, the passenger traffic was 16 million, and COVID-19 could not be an excuse for not attaining 20 million in 2020.
 
“We are in 2023, two years after COVID-19 had been declared ended in Nigeria, and we are still in the pre-COVID figures. The airfare is higher than pre-COVID. About 70 per cent of the air travelling passengers are government and corporate officials whose airfares are paid by their employers.
 
“The question now is, are the employers financially buoyant today to be able to be paying for the airfares of their officials to increase or sustain the passenger traffic figures? Only time can tell,” Ojikutu said.
  
Aircraft engineer, Andrew Sunday, is one of those disappointed with the state of the industry. Sunday said though the minister enjoyed good support from stakeholders, “attempts to implement unpopular and outdated ideas were his undoing”.
 
He said: “I’m surprised that he awarded himself a 100 per cent score for the Roadmap. Sadly, he came in as an insider and professional, but clearly missed the runway and crash-landed on his promises to the industry at large. It’s so painful for some of us who love him so much, to witness these episodes of unfulfilled promises. He should score three over 10, because on the overall, aviation is worse off than he met it,” Sunday said.

Where are the governing boards of agencies?
Indeed, one of the issues that agitated aviation workers the most is the conspicuous absence of statutory governing boards of directors for five aviation agencies. President Buhari had six years ago, approved replacements for the former boards but the new ones were not inaugurated, allegedly in preference for “a one-man” leadership at the helm.
 
The responsibilities of the board include fixing the terms and conditions of service for employees, reviewing yearly reports of the management for submission to the President, presenting yearly budget estimates of the agency to the minister, record-keeping, and auditing the agency among others.
 
Former scribe of the National Union of Air Transport Employees (NUATE), Olayinka Abioye, said besides the Roadmap “been a colossal disaster as the items became distorted with variations, wasteful, and avoidable controversies”, the tenure also treated the worker with disdain.
 
Abioye noted that workers are the lubricant of the industry, and despite their grievances over the years, they remained steadfastly devoted to the provision of seamless services.
 
“As the maxim says, a disgruntled worker is an accident waiting to happen. It is disheartening that under the watch of the minister, workers service conditions nosedived arising from the failure of the Executive and the Ministry to secure for these workers the only ingredient that could add value to their lives and working conditions. This non-provision and approval of functional service conditions worsened following the arbitrary and unwholesome refusal, failure and reluctance of the supervising Minister of Aviation to inaugurate Federal Government approved Governing Boards for aviation agencies.
 
“The establishment Acts of these agencies provides for the existence of these Boards, who see to the day-to-day running of the agencies in consonance with the Act establishing them. And without the existence of these Boards, the Minister becomes the alpha and omega, de facto and de jure controller of the agencies and that’s where we have found ourselves in these past eight years, where probity, accountability, and transparency had taken the back seat.
 
“It is very frustrating for CEOs to be running helter skelter all over the ministry waiting to secure one approval or the other from the minister for days. I have witnessed occasions where the minister became the spokesman for the CEOs at several fora whereas the CEOs were present. Very humiliating, to say the least!” he said.
 
President of the group, Dr. Gbenga Olowo, said it was regrettable to find the “national carrier a stillbirth, MRO as unborn, and airport concessioning inconclusive”.
 

Olowo added that the government, however, did well in the area of regulatory bodies, with the status upgrade of the Nigeria Civil Aviation Authority (NCAA) and expansion of the Accident Investigation Bureau (AIB) into National Safety Investigation Board (NSIB).
 
He, however, said that: “the failure to establish some aviation agency boards as stated in the Civil Aviation Act (CAA) violates Section 29:1 of the Civil Aviation Act, as contained in Section 11:1 of the 1999 Nigerian Constitution.
 
“The New Airport Terminal Building in Lagos, commissioned by the President last year, was said to have had no apron for parking, ditto for the one in Abuja obstructing the control tower. The light rail line in Abuja does not connect to the airport terminal building either. Were there no plans before these projects were executed?
 
“We expected the government to have done at least 60 per cent and leave the rest to politics. To us at ASRTI, following our indices, we scored the administration below par. We didn’t see the national carrier. We started acquiring non-profitable airports from state governments, and some governments still want to develop their own. And we said no. How about the existing ones that are unprofitable?
 
“The Murtala Muhammed Airport (MMA), Lagos that is supposed to be our number one airport has been neglected. The one added by the Chinese, recently, some foreign airlines rejected it. How can we deliver a facility that operators don’t want? So, who is delivering facilities for who? No airline growth, no airport growth because I didn’t see a hub developed,” Olowo said.

Caveat emptor!
The president added that it behooves the incoming administration to critically review the aviation roadmap and make amends with the foreign airlines, to return air transport to the path of growth.
 
Aviation analyst, Olumide Ohunayo, said the current administration has demystified the age-long agitation for having aviation professionals at the helm of its affairs.
 

“Now we have realised the need for a change; to bring people from outside the industry but people with good flair for economics and commerce. What is actually lacking in our industry is that ability to attract FDIs and the need to push for the commercialisation of the industry and its agencies,” he said.
 
Ohunayo explained that with aviation agencies struggling with inefficiencies, each minister that comes on board has been loading those agencies with all manner of irrelevant staff.
 
“The staff structure is killing professionalism; we must address it. Again, we must get to the point of ICAO’s statute that says that revenue generated in aviation must be reinvested to develop infrastructure and delivery of quality services. We need sincerity of purpose. That much we lacked and you can see why all the concessions are failing.
 
“For me, we should return to those days when we had the Minister of States for Aviation, under transport, for accountability purposes and avoidance of dictatorial tendencies. I only pity the next minister of aviation because there are so many landmines that have been put in place for him or her failure. And all of them are coming from the Roadmap that is enmeshed in all manner of controversy just because the handlers put their private interest before national benefits,” Ohunayo said.