The Travel Sector in Nigeria: Any Joker in the Pack?

As I write this piece, I am saddened by the turn of events over the last 15 years in what ought to be Africa’s most vibrant aviation market – Nigeria. With the largest economy in sub Saharan Africa and probably the largest premium customer base (and if I may add, the largest national traveling public in Africa) and revenue in the continent, the Nigerian carriers are not even getting a scratch of the benefits of this burgeoning market.

Just last week the ever vociferous Airlines Operators of Nigerian (AON) called on government to put up some measure to curtail the increasing capital flight by foreign carriers estimated at $1.4 billion last year. The emotional outburst is nothing but emotional and unintelligent. How do you implement a 25% surcharge on foreign carriers on their revenues because Nigeria is unable to reciprocate its traffic rights? Did the foreign carriers stop Nigeria from enjoying its traffic rights?

No doubt the independent carriers are handicapped, financially and structurally. Unfortunately they are not learning. It’s just noise, hot air. For a market that generates about $2 billion annually they need to do more, and the government needs to support them as well. Nearly all of them don’t have the financial and structural discipline to run the business efficiently and effectively. It’s quite a tasking business with thin margins. Look how long it has taken British Airways to declare dividends.

When recently a Nigerian, Chris Amenechi suggested in an interview with a 30 year programme to put the industry in a sound footing, nothing can be further from the truth. Both the government and the aviation practitioners need to put their house/s in order.

Can we please look forward? We need a plan to recapture the market, create jobs, and catalyse our economy. It’s a known fact that aviation is always a catalyst to economic growth. Check UAE, India, China, Singapore, Qatar, Brazil, etc. The UK is currently planning an extra runway in Heathrow with a promise for £100 billion investment inflow and over 120,000 jobs. Just one extra runway in London Heathrow!

What we need is a whole sale restructuring to make the industry attractive for local and foreign investments from our airports and our airlines. We don’t have the funds to invest in these infrastructures, so we need policies to attract private capital.

It’s good the Bureau for Public Enterprises – BPE is planning to privatize the airports, so let’s have an action plan. Our airports must have a great customer centric experience, great ambiance, a place you’d like to be. It shouldn’t be a place where the flying experience is a nightmare, as it is today, especially at the Murtala Mohammed International Airport (MMIA) Ikeja, Nigeria’s number one gateway; a place where Airforce personnel are beating up passengers or hindering family members to accompany them to check-in in the name of security threat. That’s more a mad place than an airport. I suggest our security agencies go and learn passenger profiling and security threat containment in similar countries in Europe and Africa where there are terror threats. I wonder how that airport escaped the recent rating by CNN of the worlds top ten worse airports.

BPE should call a stake holders forum – local airlines, foreign airlines, top business travelers, bankers, aviation/travel media and government aviation policy makers to craft the best way forward regarding the privatization of our airports. Are we privatizing for the sake of relinquishing ownership or to create a huge travel market? What do we want our airports to be like in 20 to 30 years? What should we do to have multi billion dollar airport, with all the key customer friendly attractions, and futuristic technology? What passenger traffic do we want to generate and how? What employment level do we want to generate? What do we need to do to attract capital? How can we create the number one hub in Africa in 20-30 years? How can Nigerian carriers take advantage of the anticipated growth? What must we do? Can we tap knowledge from some of our nationals in diaspora, especially Bayo Ogunlesi, the top investment banker with ownership in some airports across Europe?

For me personally the issue of a national carrier is a no no. Why? The Nigerian government and its employees have never shown the discipline to run a private enterprise. Check NNPC, NPA, NEPA, NRC, etc. Except if we can structure a deal like the NLNG, but the Virgin Nigeria is an albatross put on the neck of Nigeria by Richard Branson to dissuade international investors from Nigeria. It was just give a dog a bad name to hang it – this is a topic for another day. Nigeria must renegotiate all Bilateral Air Services Agreement – BASAs within a three to five year time frame with the aim of giving advantages to local carriers. The aim is to cajole foreign carriers to collaborate with local carriers that meet certain operational standards or criteria. With the BASA we currently have, we can’t introduce new elements into the deal, except a new one is signed. Our local carriers must be up and doing with sound customer experience that would endear them to customers and make them capable partners with foreign airlines. No airline would want to partner with any local carrier that can’t meet international standard of operations, or be frequently delaying flights giving ‘operational’ excuses.

Our government must look at the bigger picture and help the airlines to grow. The user charges should be reduced with the aim of giving the airlines at least 5 years grace to grow and impact positively on the economy. There should be a timeline with deliverables for the airlines, so that only serious ones would be supported with guarantees for equipment, while encouraging them to consolidate. Those who decide to consolidate and go public should be given additional support or reliefs, all in a bid to strengthen local operators. The Nigerian travel industry has the capacity to impact positively our real estate, entertainment, hotels and almost every sphere of live, but we need political will power, grit, vision, leadership and discipline to realize it. Let’s kickstart it, pronto.