DG NAMA Urges Partnerships Amongst Airlines, Airports, Regulatory Bodies, Stakeholders for Better Service Delivery

• Says NAMA proposes to increase its fees, charges by 800%, review the extension of hours of service

The Managing Director/Chief Executive Nigerian Airspace Management Agency, Engineer Farouk Ahmed Umar has said that the challenges being faced by the Aviation industry are too great for any single entity to tackle alone and harped on the need to foster partnerships amongst airlines, air navigation service providers, airports, regulatory bodies, and other stakeholders.

Engr. Umar stated this in his keynote address at the League of Airports and Aviation Correspondents Annual Conference 2024 with the theme: “Aviation Survivability amidst a Challenging Macro-Economic Environment,” held in Ikeja Lagos on 26th July, 2024.

DG NAMA said that the theme of this year’s League of Airports and Aviation Correspondents conference: “Aviation Survivability amidst a Challenging Macro-Economic Environment,” cannot come at a better time than now and resonates deeply with the current realities we face, not just in Nigeria, but globally.

He affirmed that “By working together, we can share best practices, pool resources, and develop strategies that benefit the entire industry. International cooperation is also vital, as global connectivity is the backbone of our aviation.”

He expressed deep appreciation to the League of Airports and Aviation Correspondents (LAAC) for their unwavering commitment to reporting on the aviation industry with professionalism and ethical integrity, which has been instrumental in educating the public, shaping public perception and informing stakeholders.

He highlighted that “the aviation industry supports over $3.5 trillion or 4.1% of the world’s GDP. It supports about 87.7 million jobs the world over. In Africa, aviation supported 7.7 million jobs and $63 million in economic activities in the pre-COVID period. Nigeria has about 241,000 supported jobs contributing $1.7 billion to the economy.

“The Nigeria’s figures are nowhere comparable to say South Africa with 472,000 supported jobs and $9.4 billion contribution to the economy or Kenya with 410,000 supported jobs and $3.2 billion GDP contribution.”

He stated that the industry has always been a barometer for the global economy, and recent times have tested their resilience in unprecedented ways, as the COVID-19 pandemic brought unparalleled disruptions, grounding flights and emptying airspaces and airports worldwide, but noted that though recovery is underway, the path is uneven and fraught with challenges.

According to him, “In Nigeria, the situation is further compounded by economic volatility, unprecedented hike in fuel prices, and currency instability. These factors, combined with high operating costs, have put significant pressure on our aviation sector. As we navigate these turbulent times, it is imperative that we adopt innovative and sustainable strategies to ensure the survivability and growth of our industry.

“To survive in this challenging environment, we must prioritize operational efficiency and cost management. This involves streamlining our processes, optimizing resource allocation, and embracing technologies that enhance efficiency. The aviation industry requires collaborative approach to operational efficiency and cost management.

“At the Nigerian Airspace Management Agency (NAMA), we are committed to continuously improving our air traffic management systems to ensure safe, efficient, and cost-effective operations.”

He advocated that innovative and technological approach is key to improving the survivability of the industry, adding that implementing advanced technologies, leveraging artificial intelligence for predictive maintenance, and enhancing cybersecurity measures are critical steps.

He also stated that by embracing these technologies, they can improve safety, reduce delays, and enhance the overall economic performance of Nigeria’s aviation, adding that at NAMA, they are implementing advanced surveillance systems, communication and navigation systems that will enhance cost effective flight procedures.

Robust and modern infrastructure, he said, is essential for the growth of the aviation sector, stressing that NAMA is dedicated to upgrading our airspace infrastructure to accommodate future demands by introducing modernizing navigational aids, enhancing radar coverage, and implementing satellite-based systems.

He emphasized that these upgrades will improve safety, efficiency, and capacity, positioning Nigeria as a key player in global aviation.

DG NAMA maintained that the industry requires a very efficient pricing of products and services because it is a critical lever for enhancing affordability, driving competition, supporting infrastructural development, promoting sustainability, and improving operational efficiency, noting that price for services must reflect the value of these services.

Speaking on the role of Nigerian Airspace Management Agency, Engr Umar said the Agency’s mission is to provide safe, efficient, and cost-effective air navigation services, supporting the growth of Nigeria’s aviation sector by enhancing their capabilities and adapting to the evolving needs of the industry.

The Nigerian Airspace Management Agency, according to him, relies on statutory fees and charges for the management of the airspace and without these funds NAMA can’t discharge its responsibility of ensuring the safety of our airspace effectively.

He stated further that the Agency majorly generate these funds through the airline companies and the largest percentage of NAMA’s revenue comes from en-route navigation charges (domestic and international flights) and terminal navigation charges (domestic and international flights), while international flights pay in US dollar, domestic flights pay in the Nigerian currency.

He hinted that as a service provider and in accordance with ICAO best practices, NAMA does not make profit as ICAO Doc 9082 recommends cost recovery for service provision to cater for the cost of equipment, personnel, trainings and other ancillary costs.

However, he revealed that “For 2023, NAMA has an expenditure of about N21 billion in personnel costs alone. It spent over N12 billion in capital costs and over N10 billion in overhead costs. All these were to be (and were) funded from fees and charges (no FGN budgetary allocation).

“NAMA has been charging as low 11,000 Naira per flight when a one-way domestic ticket cost only 16,000 Naira. While ticket prices today have gone up astronomically to as high as between 150,000 to 200,000 Naira for a one-way economy ticket owing to the prevailing economic circumstances, Nama’s navigational charges have remained the same since June 2008.

“Also, NAMA charges 50,000 Naira for every hour that it has extend services beyond the stipulated hours of service at aerodromes that do not have 24 hours service. In 2008 a litre of diesel was sold at around 113 Naira, today it is well over 1,400 Naira per litre which represents over 1,000% increase which makes the current charges unsustainable. Same goes with personnel costs and other costs.

“Currently, our unit rate for international flights charge for service provision is about $70, domestic flights are charged 6,000 Naira. While, NAMA recognizes the difficult economic environment aviation operates in Nigeria, it is equally a part of the ecosystem. It goes to the same market to procure equipment and other services like trainings. If NAMA is to survive and continue to guarantee safety and efficiency in the airspace, IT MUST BREATHE! IT MUST BREATHEEE!” he added.

DG NAMA mentioned that it is in the light of this, and in the spirit of this conference’s theme of survivability that the Agency announces the review of its fees and charges, adding “ Even though most costs in the economy have increased by more than 1,000%, NAMA has proposed to increase its fees and charges by 800%.

“The new unit rate/minimum charge for en-route is 18,000 Naira from 2,000 Naira per flight while the new unit rate/minimum charge for terminal navigation charge (TCN domestic) is 54,000 from 6,000 per flight with effect from the 1st of September, 2024.”

He also disclosed that the extension of hours of service is also to be reviewed from 50,000 to 450,000 Naira per extension to enable the Agency recover the cost of diesel and other logistics during the period of extension.

He explained that NAMA has invested heavily in training programs to equip personnel with the latest skills and knowledge in order to remain proficient and adaptable to technological advancements as well as strengthened relationships with airlines which have led to improved air traffic management and better service delivery.

He recalled, how recently, an investigative journalist erroneously reported that the Agency’s primary radars have not been operational since 2021, noting that such misinformation has the potential to undermine public confidence in our aviation infrastructure.

He commended the vigilance, diligence and dedication of LAAC members—the core aviation reporters who stand for truth and integrity for making such that this misinformation was swiftly debunked.

DG NAMA affirmed that the radars are fully functional, even though, the system is due for an upgrade, stressing that NAMA has continuously invested in the latest technologies to ensure the safety and efficiency of the airspace.

Engr. Umar also extend his heartfelt gratitude to the Honorable Minister of Aviation and Aerospace Development, Festus Keyamo, SAN, for his unwavering support, adding that the success of NAMA is, in no small measure, attributed to his visionary leadership and steadfast commitment to the aviation sector.

In his words “Under his guidance, we have achieved remarkable milestones. Let me be clear, the honorable minister has never interfered in the operations of the Nigerian airspace management agency, which is a complete deviation from what was obtainable in the past.”

DG NAMA announced that the Nigerian aviation sector has a rich history of resilience and innovation, adding that by embracing change, fostering collaboration, and maintaining commitment to excellence, the industry cannot only survive but thrive amidst this challenging macro-economic environment.

Earlier in his opening remark, the Chairman, The League of Airport and Aviation Correspondents (LAAC), Comrade Suleiman Idris, stated that the theme of this year’s conference, ‘Aviation Survivability Amidst A Challenging Macro-Economic Environment’ was inspired by the challenging state of our economy, which has amplified the already existing constraints to growth and development of the country’s aviation sector in the form of poor access to forex, weakening currency, high fuel costs, ballooning maintenance costs, decaying airport infrastructure, regulatory constraints, growing manpower demand, technology upgrade, passenger comfort, among other issues that require urgent attention of industry stakeholders.

Comrade Idris emphasized that aviation business is capital intensive, coupled with the fact that most transactions relating to equipment acquisition, spare parts, leasing, maintenance, training and manpower development and other aspects imperative for keeping aircraft in the sky require foreign exchange.

He lamented that with the recent developments under the new dispensation which introduced the floating of the local currency, high inflation has since wiped-out disposable fund from majority of the citizens.

Succinctly put, he said, air travel holds no attraction to majority of the erstwhile flying public, let alone provokes the interest of new air passengers.

“For Nigerians who travel by air, it has been an agonising experience since the Naira started its free fall against major foreign currencies such as the United States Dollar, USD, Euro, and the British Pound Sterling, BPS, among others.

“Each of the service providers in the aviation value chain in Nigeria is presently groaning. So also, are the consumers of the service- passengers and air cargo handlers,” he added.

He recalled that early this week, the CBN announced that interest rate has climbed up to over 27%, while the inflation rate is more than quadrupled.

According to LAAC Chairman, organisations prospecting in each of the aviation value chain are also not smiling and passengers are complaining for paying over N200, 000.00 for just one leg of an hour flight on the domestic routes.

He noted, however, that “The cost of aviation fuel is highly prohibitive. Procuring spares at N1500 to 1USD has put the airlines in permanent auto unnerving mode. The ground handlers want to regularly review their tariffs as against the free fall of the naira. Statutory training for technical personnel in accordance with the International Civil Aviation Organisation, ICAO, recommended standards and practices is now being rationalised.

“Ipso facto, the regulatory agency and every other service providers are getting their share of the heat which the current disconcerting macro-economic environment has produced.

“No stakeholder is exempted from the effect of the industry’s current challenges. This is one of the major reasons that we are gathered here today to brainstorm and exchange ideas on how to navigate the multifaceted challenges stunting the growth and development of our industry under the prevailing macro-economic environment.

“Although no segment of Nigeria’s economy operates in isolation, aviation remains the major gateway to development of any country’s economy,” Comrade Idris highlighted.

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