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Airlines Debt Forgiveness And Bail Out

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Being a paper presented by Mr Gbenga Olowo at the Aviation Economic Summit Group Breakfast Meeting in Lagos, recently.
I am raising an issue for thought for the Aviation Industry. Let us ask ourselves why we are sitting here this morning. We are sitting here this morning at the Aviation Economic Summit Group Breakfast Meeting because of the airlines, No airline. no airport, no airline; no catering service; no airline no Nigerian Airspace Management Agency (NAMA); no airline, no FAAN; no airline, no all of us.
Like Sabre Travel Solution Company, when I entered the industry, over 30 years ago, Nigerian Airways had engineering department, reservation and booking centre, cargo department, name it, the airline was everything, I couldn’t remember if Nigeria had an airport. It was Nigerian Airways. I couldn’t differentiate between an airport and Nigerian Airways. As at that time, the airline was big, I did not hear the airport asking Nigerian Airways you are owing me money. I couldn’t remember airspace asking Nigerian Airways, where is money? What is an airline today, reservation and ticketing is outsourced, catering is outsourced, engineering is outsourced, and everything is out sourced. All of us, are feeding on this empty body called airline. We now hear on the news, Federal Airports Authority of Nigeria is going to ground the airlines, they are owing, some of the foreign airlines are equally owing. I know why we owe. Economics is about reality in taking facts. When America realised that all her businesses were going bad, example, AIG, GM in the private sector, the president said, gentlemen, let us face the reality of our economic challenges; AIG was bailed out from tax payers’ money, same as GM Motors. How come that other economices are more realistic than African economy? During the time of 9/11, the airlines faced a very tough challenge world over. Insurance premium went up, it was about 350 per cent increase in insurance premium. I remember I was the Executive Director of Bellview Airlines at that time, and we made a brief visit to our then minister of aviation and complained what was done to other airlines in the world. Nigeria please help us, because our insurance premium has gone up, 350 per cent. Why did the United States of America bail out the airlines at that time? They saw that the 9/11 problem was a sovereign challenge. It was not a challenge to the airlines, it was a challenge to the sovereignty, it now affected all of us here in Africa. It was also a challenge therefore to our sovereignty, and we expected government to bail out the airlines, we never had bail out, we have to cough out the money we did not have to pay those increased insurance premium.
Today, we say we have 14 airlines in Nigeria after the liberalisation, but I say the 14 airlines are not equal to the Nigerian Airways we had years ago. What we had in the market is substitution. We are replacing the disease that killed Okada Airlines; that killed Kabo Air, that killed Oriental Airlines, that killed Harco Air, that killed Harco Air, that disease was and is still there and may likely kill very present ones. Aviation Development Company (ADC) Airlines was doing very well; professionals were there; that disease killed them, Bellview is there now, walking on one leg, but it was the best airline of the time, when Nigerian Airways was not there. It was the pride of the country, now the reality is that all of us FAAN, NAMA, NAHCO, these organs feed on the airlines – yes. The airlines must pay for services, services rendered by FAAN, landing and parking, rent. But what do we find on our tariff today as airlines? We find ticket sales charge, 5per cent, passenger service charge, 5per cent and so the airlines have become a revenue collector. I don’t know any revenue collector in this world that does the job free of charge. If the International Air Transport Association, (IATA) collects revenue for you, it charges about 5per cent of the amount collected. I also know that when tax collectors were collecting money for Lagos State government, those companies were charging on the amount collected.
The airlines in our system haven’t made our government realise the problems and challenges that we are facing. We collect the money but are not able to pay it to you because we have our own pressing need. Our own pressing need is that we are charging passengers in the aeroplane who must go and the priority is to fuel that aircraft. Rather than fuel the aircraft, I will not give the money to FAAN, NAHCO, NCAA, SAHCOL and the rest. So long I am collecting the revenue, the money is in my pocket. I will solve my problem first and the debt as my asset. How long are they carrying it as an asset! that is the reality. If you shut all the airlines, then, they will not be able to pay those funds anymore.
The best idea is not to shut them down but the reality is to say all right, as from today, lets give you 50 per cent off: we are all feeding on the airlines, and the airlines are saying, we are weak, we are sick, help us.
My humble submission is that if all of us survive on the airlines, and the airlines say we are sick, especially the Nigerian airlines, that are sick and if you don’t want them to go the way others went in the earlier days, let’s bail them out economically, that is the reality.
Olowo is president of Sabre Travel Solutions. A licenced travel agent and member International Air Transport Association (IATA).

A Bellview Airlines aircraft awaiting passengers

A Bellview Airlines aircraft awaiting passengers

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Aviation

PH Airport Set For Certification …Airport Manager Gives Dec Date

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The Port Harcourt International Airport, Omagwa, which has been going through the process of certification for some time now, is to be licensed in December this year.
The Airport Manager, Mr Felix Akinbinu who also doubles as the Regional General Manager, South South, disclosed this in an interview with airport correspondents, Wednesday.
According to him, the airport authorities are looking up to the 23rd of December this year, for the certification of the airport.
“This airport has been going through the process of airport certification. We are looking forward to December 23, this year for Port Harcourt International Airport to be licensed.
“Licensing means that the airport is safety compliant in all standard, and the implication is that the insurance of premium for either the flights or passengers that operate or use this airport will be reduced”, he said.
On the coming of Ethiopian Airlines to operate in Port Harcourt International Airport, the regional manager said that their coming was an answered prayer.
According to him, the Port Harcourt Airport needs more international flight operations, saying this is due to the fact that the airport terminal capacity at the moment is more than the flights that are operating currently.
He said that they were also looking forward to see the operations of Ethiopian Airlines to be a permanent one, where they will be operating both in Enugu and in Port Harcourt.

 

Corlins Walter

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Aviation

Oyo To Partner FAAN On Ibadan Airport Upgrade 

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The Oyo State Government has agreed to partner with the Federal Airports Authority of Nigeria (FAAN) for the upgrade of facilities at Ibadan Airport to accommodate wide bodied aircrafts.
Oyo State Governor, Seyi Makinde, disclosed this when the management of FAAN paid him a courtesy visit in his office in Ibadan, Tuesday.
He noted that the Ibadan Airport is important to the economy of the state and promised to collaborate with FAAN to resolve the challenges facing the airport.
The governor said that the airport was key to the plans by his administration to expand the economy of the state and affirmed his administration’s resolve to improve infrastructure and security at the airport.
“I have made some promises about the airport. I promise that the intending Muslim pilgrims will fly from the Ibadan airport directly to the holy land from next year and I count on FAAN to make this promise achievable.
“We are also thinking of expanding the runway to make it easy for bigger aircraft to operate at the airport and I promise to partner with FAAN to make it happen”, he said.
Earlier in his speech, the Managing Director of FAAN, Capt. Rabiu Yadudu, thanked the governor and the people of Oyo State for their support and patronage since the inception of the airport 37 years ago.
The FAAN boss, who was accompanied by the Director of Engineering Services, Salisu Daura and Director of Security Services, Group Capt. USA Sadiq (rtd), said the management had already written a letter to the governor on areas of assistance.
He, however, assured the governor and other stakeholders of the commitment of FAAN to achieve and sustain its service delivery target.

 

Corlins Walter

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FAAN MD Hails Ugwuanyi Over Safety At Enugu Airport

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The Managing Director of the Federal Airports Authority of Nigeria (FAAN), Capt. Rabiu Yadudu, has expressed gratitude to the Governor of Enugu State, Ifeanyi Ugwuanyi, for tackling security challenges at Akanu Ibiam International Airport, Enugu.
Yadudu, in a statement made available to airport correspondents last Wednesday through the Corporate Affairs Department, expressed satisfaction with the work done by the governor based on the request made by FAAN.
According to him, FAAN was satisfied with the interventions made so far by the governor such as the relocation of the Orie Emene market, abattoir, and the dismantling of the Enugu State Broadcasting Service Radio/TV mast.
The FAAN in the statement also disclosed that the issue of relocating the ENPOWER free trade zone, adjacent to the runway of the airport has been resolved with the management of the establishment.
Yadudu, while seeking further timely intervention of the governor, however frowned at the attitude of those that turned the airfield near the airport to residential place and urged the governor to take prompt action on the matter.
The Tide reports that Governor Ugwuanyi had assured earlier that the state would intervene promptly on the matter and stressed that his administration was fully committed to the safety of lives and property as well as the progress of the Enugu airport.
According to the governor, issues affecting the safety of the Enugu airport will not be undermined in his administration, saying that they will be resolved expeditiously.

 

Corlins Walter

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