Nigeria’s Aviation Sector has over the years been battling with myriad of problems ranging from government policies, lack of political will to equip the sector, insecurity, improper management of resources, dearth of expertise and several others, IME AKPAN writes
These have not in any way helped the situation as most airlines operating in the country have had to put in more effort to ensure that their investment does not go down the drain.
Some of the major players have been raising alarm that they are being choked and are almost running at a lost due to the unfriendly environment they along with others are operating.
To this end, the Managing Director of Nigerian Aviation Handling Company (nahco aviance), Mr. Norbert Bielderman, has said that it is expensive to run an airline in the country because domestic air tickets are still significantly low despite increase in airport charges and taxes.
Speaking at a cargo summit held in Lagos recently, Bielderman who pitied the airlines for still paying for their aircraft maintenance in dollars, while aviation fuel has not significantly been reduced, called on the domestic airlines to come together and agree on a base rate for air tickets in order not to compromise safety.
He also said the Nigerian Civil Aviation Authority (NCAA) would do well to step in and analyze their (airlines) current book positions and act accordingly, saying “Nigeria cannot afford another air mishap.”
“The negative factors that I have posited prior that limits aviation this current year may be summarized to include naira depreciation , high exchange rate, high interest rates, unreasonable domestic air tickets, elections and associate violence, political economy, static aviation fuel price, high airport taxes, charges, ground tents and concession fees.
Aviation business like any other business is set up to make profit and to create shareholder value and these negative supervening factors may lead to cost saving methods that may compromise service standards and safety,” he said.
Thereafter, Bielderman said the travel ban slammed by the European countries on Nigeria also contributed to the huge loss.
“There have been travel bans from many European countries and this has negatively impacted the aviation sector. Nigeria’s foreign reserves are significantly depleted and our national account is in deficit. The crash in oil price and consequent impact on the nation’s revenue earnings, exchange rate move from N155 to a dollar and N205 to a dollar within a six-month period at the interbank and Central Bank of Nigeria’s final closure of the Royal Dutch Auction system (RDAS) is a testament to the fact that all is not well with our economy.
“Implicitly, Naira has been devalued to between 30-40% and this will necessarily cause inflation if government does not put in place deliberate measures to mitigate an upsurge in price across industry.
“We expect they would save rather than spend in months ahead due to rising cost of living, potential job losses, rising children school fees etc. Also, the travel warnings and/ or ban from European Union countries for their citizens coming into Nigeria has assured that many flights from Europe to Nigeria have been either flying half empty to near empty.
“We expect inflation to rise up to 10 per cent or more soon. Furthermore, the cost of fund has also significantly risen with bank interest rates now up to about 26 per cent. This will lead to massive job losses within the private sector and for them to survive this trying time. In Aviation, the domestic airlines would be worst hit because of current ticket prices are not in sync or responsive to current realities.
This is due to unhealthy price wars and pursuit of market dominance at the domestic side of airline business,” he said.
He also said the ground handling firm had secured a Free Trade Zone (FTZ) license and also established a subsidiary with a five-year business investment plan of about $500 million.
Bielderman also said the company’s shareholders had been benefiting from uninterrupted dividend payout for the last 10 years.
The managing director who also said nahco aviance recently won an award “in this constantly challenging economy’ added that though the company forecast very testing time ahead “we would work very hard to sustain this feat through hard-work, improved efficiency, cost management strategies and revised revenue structure.”
He pledged to continually develop and sharpen the skills of the company’s workers to support the industry needs, adding that nahco aviance had budgeted the $200,000.00 for staff training in the current year.
“Our 2015 budget has accommodated employee training provision of $200,000.00. As we all know that aviation is a knowledge based industry with its high technical and safety needs and requirements, we have chosen to reinforce our commitment to staff training.
We have initiated a process to engage 100 Passenger Services Agents (PSA) next quarter who after the mandatory compliance training will travel overseas for one month on-the-job training at a high brow international airport. This further assures our client airlines of our unflinching commitment to service excellence.
Upon employment, these new talents will also replace our aging workforce as identified globally as an industry strategic need,” he added.