Minister assures Gov’t Commitment to Address Aviation Challenges, Promises Fare Reduction

• Urges investment in MROs in Nigeria’s Airports

 

The Minister of Aviation and Aerospace Development, Mr.Festus Keyamo, has assured stakeholders in the Aviation industry of the federal government commitment to address challenges in the sector and promised a reduction in ticket fares soon.

The minister gave this assurance during his brief remark at the 28th conference of the League of Airports and Aviation Correspondent (LAAC) in Lagos with the theme “Aviation Survivability amidst a Challenging Macro-Economic Environment”, adding that currently there is shortage of planes by local operators to meet the growing demand for air travel, hence the hike in fares.

He called for support for the five-pointer agenda they have set for ourselves, adding “If you think we have not covered any area within the five-pointer agenda, please be free to let us know. We are going to expand it to six-pointer agenda or seven-pointer agenda.

“But the first is that we are going to enhance and ensure strict compliance with safety standards. Because that is number one in the industry. So, we talk about safety first of all.” |

The second, of course, he said, would be to improve both the aeronautical infrastructure and the non-aeronautical infrastructure and the third would be to support our local operators.

Keyamo affirmed that local operators are facing numerous challenges, including a lack of access to aircraft, maintenance, repair facilities and difficulties in obtaining foreign exchange to purchase spare parts.

He ascribed the recent hike in air fares to these challenges and assured that the government is taking steps to address these issues as talks are ongoing with aircraft manufacturers to acquire more planes to service both domestic and international routes.

The minister said “there is a shortage of aircraft in Nigeria to service routes. That I think is the major problem we are facing. The local operators are struggling. They are struggling to cover their routes not to talk about our international routes. Air France is coming here ten times a week. We are not going to Paris. Lufthansa is coming here. We are not going to Frankfurt. Delta, United, is coming from America. Nobody is going to America.

“Even here, South Africa is coming here. Nobody is going to South Africa. We only managed to get the London route recently for Air Peace. And we are pushing also for them to take us to Heathrow now. We are pushing. We want to make a point to them.

“I am writing a letter to my counterpart in UK. You can’t tell me that you have a slot committee. If you concession your airports, people, they should know that you have existing obligations in that airport.

“And they should respect those existing obligations under the BASAs. If we give us, you our tier one airport, you should give us your tier airport too. If not, we will divert BA to somewhere.

“You can’t tell us it Is in the hands of other people; it is your airports before you concession it.

“You have the existing obligations before you concession it. Tell those people to respect their obligations.

“Without doing that, there can’t be real connectivity. You can’t do real connectivity. But when you get them into Heathrow, people can buy a lot of tickets and then they can co-share. That is the only way you can get our local airlines to co-share with other airlines. So that there can be connectivity and you can go to other parts of the world. Right? So, for them, how can these local people compete? They need access to aircrafts. They need the capacity to acquire the aircrafts.”

He promised to support our local operators to make sure they enhance their capacity in order to stop high mortality rate which has been there for many years in the aviation industry in terms of airlines coming and going under.

“I think more than 100 airlines have come and gone under in the last 40, 50 years. In fact, we have had some AOC holders who never came at all. They have AOC, but they never want to come at all,” the minister said.

Kayemo opined that there is a need to enhance their capacities, stressing that in the absence of a national carrier, in the absence of our own airlines, then we should have flag carriers within the aviation who will make us proud as well as service our reciprocal rights under all the different BASAs that we have.

He also harped on the need to enhance capacity for development in the industry by training, retraining our technical people within the industry to ensure that we raise their standards to global standards.

Speaking about revenue optimization, the minister revealed that without imposing extra taxes on people, they need to just optimize revenue and don’t see any reason why we should exclude some people from paying our taxes, paying our levies in our airports, hence he took a memo to the council.

In his words: “I said, I don’t like VIPs. You know, I am coming from civil society. I’m not coming from a privileged background.

“So, my reputation has always been that I don’t recognize VIPs. We are all the same, as human beings. So, I don’t see any reason why we should exclude some people from paying our taxes, paying our levies in our airports.

“I told Mr. President, I said, Mr. President, let us eliminate all these VIPs coming to the airports without parking in front of gates. I said, except the President and Vice President. He said, why should I be exempted? Put me and the Vice President.

“We will pay to you. It is optimized revenue. So, I am not imposing extra.

“I am just giving you one example of how we try to optimize our revenue lines. Those are five points I gave you. And if you think we are not covering any aspect of the aviation industry, please let us know.”

He highlighted that the MRO is at the heart of the improvement of our local aviation industry so we need to bring in the MROs.

Kayemo revealed that people are already talking with them and very soon, they are going to advertise and call for partnership.

“That is the only way to go. And I think we need to call in people with money. So, for our local businessmen, our banks, financial institutions, financiers, don’t say that foreigners are coming to take your business away.

“It is big business. Anybody that establishes a world-class MRO now, I know people will say something. But, white bodies.

“But we still need more. Somebody that can take the triple sevens up. If you bring them in, you will serve the whole of West Africa.

“You will serve the whole of Central Africa. You will serve a good part of Southern Africa. If you can get the MROs now into Nigeria.

“There is not so far in the whole of West Africa and Central Africa for the real big bodies. The white bodies. So, we encourage all of you.

“The Arabs are talking to us. The Chinese are talking to us. The Europeans are talking to us.

“The Americans, they want to invest. And you know why it has to be PPPs. It is difficult to establish an MRO at an independent venue, different from an existing airport.

“You can’t build it. Because you need a runway to get to an MRO. So, it is pretty difficult.

“So, you have to talk with us for us to give you one within one of our international airports. We are in the process of doing a master plan.

“So, we are going to mark out clear areas for MROs within the international airports. So, we are calling. I won’t say we are begging.

“We are telling you to come and make money. So, we are not begging for investment. Come and make money.

“There is money to be made here. If you bring an MRO. And of course, somebody just made the point that it is going to save us a lot of foreign exchange, sourcing for foreign exchange. Like somebody said, everything is dollar within the education industry. It is only perhaps catering and salaries, local salaries that is in naira. So, please, we are going to watch the world to come and invest in Nigeria in our MROs. We are pushing for it. It is going to be one of our major objectives to bring in the MROs into Nigeria. In so doing, the capacities of our local operators will be enhanced,” he added.

Speaking on the breach of the Cape Town Convention by detaining aircrafts here, the minister said, “Under my watch, I told them we will not detain anybody’s aircrafts. We will not, whether not Cape Town Convention. One or two of them tried that recently, I said, take these aircrafts out of here. And I got commendation letters from officials around the world.”

He pointed out that they are in the process of drafting rules now that will serve as practicing directions to comply fully with the protocols of the Cape Town Convention so that we can be in tune with global best practices and open the doors for a lot of people to have access.

“The same access that Emirates, the same access that Qatar, the same access that Ethiopia Airlines have. Instead of pandering after them and making them say they are big enough, let us go. Enhance your people. We have the capacity to be as big as Ethiopia or Qatar. They have the capacity. Just give them the capacity. Make policies, don’t have to give them money. That is the role of government. Just make policies. That is what we should be pursuing. That is my goal,” he said.

The second issue, the minister said they are pursuing is insurance which must be based in the local market,

Kayemo said “We bent a bit to ensure that we give lessors the assurance that they can place the risk in the international market and then we can still let them bring their aircrafts in. But the rule of NAICOM now, the Nigeria Insurance Commission, is that every risk must be placed in the local market in order to enhance our local insurance companies. But then, I apologize to say, and I apologize, most of them don’t have the capacity. So, when you give them, they go and reassure again.

“And that is a double amount for them too. And that is what you are seeing in all these airline tickets and all that. The cost is too much. That is what is translated to these high fares, ticket prices we are seeing.

“So, we apologize to Nigerians, but then we have a lot to do. But we will do it. Tickets will come down.”

He emphasized that prices will come down as they are also working on the issue, that the local operators should be able to codeshare.

According to him, “They don’t codeshare within the local markets. They should. Two aircrafts are going from Lagos to Abuja. One is taking off by 9 o’clock. The other one is postponing to 1 o’clock. But you have 20, empty seats going to Lagos. You can carry people on the aircraft and then go and sort out yourself. We should work out a mechanism like that. NCAA, who is here, they say they are regulators.”

He charged NCAA to go and work it out for people to codeshare, so that they can give succour to our local passengers.

The conference also featured experts highlighting other challenges facing the industry, including poor infrastructure, lack of data, and inadequate manpower.