Sirika States Why Nigerian Airlines Do Fail In Their Operations

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Sen. Hadi Sirika, the Minister of State for Aviation

Sen. Hadi Sirika, the Minister of State for Aviation in this interview with journalists in Lagos, recently, spoke on burning issues in the country’s aviation industry; debts of airlines, government plans for 2018 and why the Federal Government substituted Lufthansa consortiums with another on formulation of national carrier. OLUSEGUN KOIKI was there for DAILY INDEPENDENT. Excerpts:

Sir, 2017 was adjudged to be the best year for the Nigerian aviation industry; what did the country do right and what is the outlook for 2018?

I think what we did right as far as aviation industry in Nigeria is concerned; especially to ensure that all of those standards and recommended practises of International Civil Aviation Authority (ICAO) were followed to the letter.

Our pass mark was well above average on security; our safety was of course above that of global average. We were scoring 77 to and 96.4 per cent respectively, and I believe this is because all of those safety critical matters and that of security concerns are addressed progressively.

The thing about aviation and the way we think of it is that we should turn to these issues because they are the issues that matter. What matters is how safe you arrive at an airport, depart at an airport and you land at another airport and the things that make that happen are things the passengers don’t see.

The passengers are rightly of course concerned about how beautiful the airport looks like, how the air conditionings are working, the elevators, lifts and the toilets are. These are very important because it’s all about passengers and consumers. But, more importantly, is that all those things that will make you to arrive your destinations safety and securely, we attended to those and I think that’s why there were no incidents or serious incidents in the year under review.

Recently, the Federal Government terminated the contract it had with Lufthansa on the re-establishment of a new national carrier for Nigeria, why this step?

It was not a termination of contract per se; what happened was that we substituted Lufthansa Consortium as parts of the consortiums to provide the Transition Advisory Services for the provision of a national carrier for the country and the reason is very simple, Lufthansa Consortium is an arm of Lufthansa Airlines Group and we felt this will compromise the process because they may be an interested party later in the day of this procurement and we thought that being an interested party, will comprise the system, will compromise the activities, which we want to be as open, transparent, fair and equitable as it should be.   That was why we stopped the agreement with them.

Of course, Lufthansa themselves were not able to sign the contract or accept offer in writing; they countered the offer that we gave to them after the Federal Executive Council (FEC) and the Bureau of Public Procurement (BPP) had approved and gave us the no objection certificate.

Later in the day, they introduced new terms. For instance, they wanted an account to be opened outside the country and all the money is deposited there.

Also, they rejected the 15 per cent initial payment, they wanted 75 per cent to be paid to them albinitio and this is not in line with the procurement laws and the contract was in Naira, N341.2 million, but they wanted to change it into euros and this is not accepted by us and most importantly, they wanted to provide the service only to the limit of the outline business case and this is neither in our request for proposal nor the one that the council has approved.

So, it was impossible for us to continue the procurement with Lufthansa Consortium. So, what we did because they are many in the consortium was that we substituted them with another company that is even, fair and that has no appendage with any other company that might be interested. So, a more of a neutral company took over in place of Lufthansa.

At a time, the Federal Government had an agreement with Lufthansa Airlines, which prevented it from paying some charges because it wants to build a hub for Nigeria in Abuja and Lagos, is the deal still on?

Part of what the Lufthansa Consortium required from us for the national carrier was that they would not be charged any taxes and this is against our laws.

Regarding the other matter, I have not reviewed it, so, I can’t comment on it for now.

Then, sir, where are we on the establishment of a new national carrier for Nigeria with all these?

I think in the next couple of months; one or two months maximum by March, we should be able to have our outline business case for this transaction and the full business scale will follow almost immediately because we are going in simultaneously and we will begin the process of establishment.

I will say that we are very close to having a national carrier established for this country. Certainly, it would be within the first term of this administration.

The Federal Government approved the sum of N45bn as final severance packages for the pensioners of Nigeria Airways in 2017 and they are yet to receive their benefits; what is the government doing about this?

The issue of pensioners, we have dealt with it, the money is being provided by the government and the Ministry of Finance is dealing with it, National Assembly is also playing its role.

So, I want to plead with the ex-staff of Nigeria Airways that since this thing happened to them, nobody cared and no one did anything for a decade.

But, we came in and said ‘this is unfair and lives of other people who have put their lives to serve the entire country.’ So, we thought we should compassionately deal with the matter, which we did and we provided the severance packages of N45bn.   They should exercise patience while this happens and they will get their entitlements very soon.

How soon is the plan by the Government to get the airports concession before the end of this tenure?

The Transaction Adviser for the concession has brought in the outline business case, we are studying it and we want to do our full business case, it will happen very soon.

How soon are we expecting the Single Africa Air Transport Market (SAATM) to commence in Nigeria?

Nigeria was among the first 11 nations that went to Yamoussoukro and took a decision to liberalise the sector and open the sky for Africa and this means development, more jobs, improved security, more connectivity, passengers’ experience and comfort among others. Arriving from that and Nigeria being a signatory to that, SAATM became an issue and Nigeria also joined other 22 countries to make that solemn declaration on single Africa market.

I think Nigeria with a population of 173 million people, more than half of West Africa, will be the greatest beneficiary on this. At a time Nigeria was pushing for this, you and me know we had Nigeria Airways and we thought we would take the advantage of this, but now, we don’t have the airline any longer and for one reason or the other, our airlines have not grown to that capacity and this is why the government felt that we should set in motion to create a robust carrier that will benefit from the SAATM.

I believe we are on right course, I believe that this private sector driven national airline, once established would become the dominant carrier in Africa because the market is Nigeria. Its centrality to Africa by its geography God given and with the population of 173 million, which is a large population and Nigeria travels almost for nothing. If you take a look at all these, Nigeria is in a vantage position to take leadership position.

As soon as it was signed, implementation begins, but of course, you know it will take up to one or two years for it to be fully functional and equitable.

One of the issues raised by the local carriers is the unfair practises by some countries and the unfavourable operating environment in the country, what is the government doing to boost the operations of the local carriers?

This question that you asked injected some sad mood into me and set me thinking.

The Nigerian carriers were in the forefront of the campaign to implement the Yamoussoukro Decision at the time when they felt vantage. Today, they are signing another song. These carriers owe all over the place.

There is no agency in the industry that is financially healthy. NCAA to my knowledge is conducting audits of the airlines in the country at the moment and I am sure the result is not something they will want to go to the press with.

The local airlines refused to grow and the challenge is not government caused, it is by their own making.   Very soon, there will be stakeholders meeting where the airlines themselves will be present and then, we will dialogue on the situation they found themselves and I will advice them to get their hearts together to re-organise, re-engineer and be futuristic and look at the bigger picture and pile and organise themselves to take the full advantage of the SAATM, rather than to sit here and the train is moving and begin to whine.

There is one of the airlines that is owing one of the agencies N13bn, there was an airline that was owing a total debts of N500bn, just one airline. That was the collective indebtedness of the airline and the airline crashed and at least it has been taken over.

Let’s take the example of Aero Contractors; the airline has been in existence for 57 years. I was born to stand up and see the name Aero Contractors. It outdates me as a Minister of Aviation and they were getting it right for about 40 years or more. Then, they suddenly changed their business model; they used to serve the oil and gas through charters and contracts, but they changed the business model by doing passenger schedule flights without changing the business model to reflect their changes. What happened? They ran into trouble, the legacy family of course did what they did and the airline went aground.

Government then took over, put management in place, told them the direction and told them to return to the core business, they went back, just recently, they conducted a C-check on Boeing 737 aircraft and the aircraft is now flying. They save cost and they are making money. I think it is getting their priority right and doing the business model that will bring money for them. Everybody wants to operate schedule flights.   Before I became a public officer, I was a businessman, I was not running an airline that was carrying passengers, but I was in aviation and I was making money. Far more money than the schedule operators.

Sir, can we then say the agencies in the sector too are culpable to have allowed an airline owe up to N500bn?

All those debts were owed in those years of impunity, but under this administration, it is not going to happen at all. We will not allow them to continue to file debts and someone will call the Villa and the debts are either waived off or post-dated.

There is no Villa that is going to call an airline. The only doors and windows that remain open are for the Minister of State Aviation and most of the regulatory authorities. There is no door or window that is opened for any entrepreneur and breaks the law and get it resolved and you cannot come also to the office of the minister or the Director-General of NCAA with unclean hands and you expect things to be done.

Just recently, President Muhammadu Buhari signed the Bilateral Air Service Agreements (BASAs) with five countries, what are the benefits of this to Nigeria?

BASAs are good and important for us for what we are now in our life circle as a nation and I think also you need to know that air transportation connects markets, businesses, culture, country and people. In doing that, it brings tonnes and tonnes of benefits for the world.

The benefits are unquantifiable. For me, the way to go is to continue to sign these BASAs until Nigeria will be able to take full advantage of the BASA themselves and we cannot sign BASAs that will be skewed against Nigeria. It cannot happen.

Mind you, it is not only the ministry that does the signing, it involves the airlines themselves and the office of the Attorney General would get it and the Federal Executive Council (FEC) would sit on it and I don’t think FEC-led by Mr. President, the Attorney General office and the airlines operating within the country and other stakeholders and the Ministry of Transportation, including the regulator, the Nigerian Civil Aviation Authority (NCAA) would all get together and sign something skewed against Nigeria, I don’t think it is correct.

Many Nigerian carriers are designated on international routes, what is the government doing to protect these airlines in foreign countries as they continue to allege unfair rules in the countries they fly into?

Let me assure you that whatever is within the law, provided for, signed in BASA, would be followed to the letter by the government. We have done that and we have intervened on behalf of the airlines in this country.

I don’t want to believe that Gatwick Authority would discriminate against Nigerian carrier because one of the major shareholders and owner of Gatwick is a Nigerian. I don’t want to believe Gatwick Authorities will discriminate against a Nigerian carrier.

Med-View is going to Dubai at the moment; you can’t just wake up one day and want to go into a country without satisfying all the legal and lawful conditions of that country especially on safety of operations and security.

All these things must be checked before you get in there. So, if there is a delay, I’m sure it will be a genuine delay.

Nigeria is a sovereign nation protected by laws and agreements and if there is any country that will renege or go back or do something unlawful that is not provided by agreements, Nigeria will stand out and I will be in the forefront to fight it.

How far have you gone with the committee set up about a year ago to look at the multiple and high charges impose on airlines operating within the country?

We have gone very far, I am submitting the report to the government. For example, the issue of Value Added Tax (VAT). Since VAT is not chargeable on transportation, we are working hard to convince government and I am sure the government would be convinced to remove VATs and other things.

Like I said, the report is being prepared now for onward delivery to the government to take decision.

What is your say on the recent incident involving Dana Air in Abuja in which its emergency door fell while taxiing?

It is quite traumatising for air traveller after landing to see an emergency door fall inside the aircraft. It can be very scary.

We reason with them and we apologise on the incident, but, I just want to explain to those who are not aviators that because of the way aircraft are built; the size and of that kind of operations, the aircraft are pressurised and by pressuring the cabin of an aircraft, would forced those doors to remain closed in-flight at altitudes. That is was why the emergency door did not fall in while in the sky. If it had done so, the pressure would suck the passengers with their seats outside.

So, because of that, on purpose, manufacturers would design those doors to remain locked in-flight and by nature, they remain so locked.

This is considered as a minor incident in aviation because that is what the International Civil Aviation Authority (ICAO) defined it to be. Any incident that results to loss of life, any serious damage to aircraft or injury, becomes an accident. The incident is well-documented and NCAA is investigating it.

NCAA is investigating it, not because it is a regulator, but because it falls within their purview to investigate minor incident of this nature. If it was a serious incident or an accident, which is fatal, it would have been for Accident Investigation Bureau (AIB) to take lead.

I have been following since the incident happened and in the next few days, NCAA will come out with a report and we will tell Nigerians of what actually happened.

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