In this interview with aviation correspondents in Lagos, Airline Operators of Nigeria (AON) Executive Chairman, Nogie Meggison, highlights areas where the incoming government of Muhammadu Buhari can make the aviation industry contribute significantly to Gross Domestic Product (GDP). Special Correspondent Nkem Osuagwu was there.
What AON expects from the new government
We expect a 10-point agenda from Muhammadu Buhari’s government.
Number one is effective government organisations and an enabling environment for business entrepreneurship to invest in the economy and create jobs for unemployed wandering youths.
Youth unemployment is between 30 per cent and 35 per cent or more in some states. This is high. We don’t need to be rocket scientists to know that when you have an educated man that is hungry and then angry, you know the after effect of it.
We have seen the effect of the jobless people in the North East.
One of the things largely responsible for the proliferation of Almajiris (beggars) is that they don’t have self-worth. When you start to create educated human beings and you don’t add value to their lives, they can come against the society because they have the intellectual capacity to do so.
Nigeria’s aviation is not just a sleeping giant and we need to wake up and take our position. We have been blessed by God. I see no reason why Nigerian aviation is where it is today. The popular saying is that one in every five black men is a Nigerian; why can’t we have one in every five African aviators to be a Nigerian?
We need to drive that purposefully and make it part of government policy to create two major things in the next two years.
One, to add economic value to our country; how can the aviation industry be contributing just 0.4 per cent to the GDP of Nigeria when the people using us as a country are contributing up to 34 per cent to their economy with Nigerian passengers.
Up to 60 per cent of their passengers are from Nigeria. Nigeria has a more robust economy, so I am not saying aviation should contribute 34 per cent to our economy. But at least let’s add some value.
In the first year [of the new government] let’s change from 0.4 per cent to 4 per cent then to 10 per cent in the second year.
It is very possible because the countries that jumpstarted aviation are contributing well to their GDP. They have put the policy in place to drive aviation to get to that point to be able to do that.
That is why the government needs to put a strong aviation policy in place to drive aviation. If you put a watered-down policy in place you’ll get a watered-down result of 0.4 per cent GDP contribution, where 400 to 500 pilots and engineers are unemployed.
So, we need to put a strong policy in place where people are not just signing Bilateral Air Services Agreement (BASA).
For example I went to a BASA meeting where the people who are representing Nigeria want to sign the sixth Freedom Rights. And I asked the man “Do you know what you are doing with the sixth Freedom Right?’’ he didn’t even know! It is on the agenda, I have the paper on my table.
When you put a policy in place it has to drive aviation to a target. As they say, if a hunter goes to the farm with his gun loaded but without a target, he can shoot the gun without any effect.
We must have a target because our gun is loaded; we have the population, we have the oil, and most of all, we have the natural gift of geographical location. Nigeria is at the centre of Africa, four and half hours to anywhere.
We should be a melting point for all carriers to come in and drop their passengers; and Nigeria should put a policy in place that encourages local carriers to distribute.
At the 2014 World Cup in Brazil, the Nigerian fan club that left from here to Rio and Wakanow (a tour operator) wanted to transport them to where they were going but they weren’t allowed. Point of call, you come in and drop your passengers and your locals will distribute.
Today, Brazil is the third largest producer of airplanes in the world. After America with Boeing, and Europe with Airbus, next is Brazil and they don’t even have a national carrier. That is none of their business! Create an enabling environment.
The government coming up with archaic 1940 and 1950 ideas of a national carrier should not be on the burner now. We are not talking about the jet age now we are talking about the E-age.
Why did countries set up national carriers? It was to create employment in the 1940s and 50s. Most of them have gone private. British Airways has gone to private, Lufthansa private, PanAmerica private; name them. They have all gone private; they have gone PLCs to flag carriers now.
Those ideas have gone. The government cannot set up an airline to create employment. You can’t be credible in that kind of system. Those systems have failed in the communist world.
We found out that communism does not work; capitalism is where we are now. If you are going to go down to the era of setting up NITEL (Nigeria Telecommunication Limited), Nigerian Shipping Company, NEPA (National Electric Power Authority) or Nigerian Airways, that will take us back to the 1960s.
Role of government in national or flag carrier
They should set up policies that will encourage local entrepreneurs to invest in aviation. By the time you get your policies right, foreign investors will bring in the money and invest.
It is just like what is happening in the Nigerian Stock Exchange (NSE). The government does not need to pump money into it before the naira appreciates. Just set up a playing ground where you create a policy for election, where the winner wins and it is clear and no one is fighting.
The whole world is praising Nigeria today. People are coming in and bringing in money. GTB (Guaranty Trust Bank) jumped from 21 to 31; what they lost in six weeks they got back in three days. So, if the policy is in place, the money will come.
The passengers are there, Nigeria has the highest population of travellers in Africa. So, we trying to set up upside down will be a huge mistake. Gone are the days of setting up an airline that’s an old model.
Another reason for a national airline is that if your policy is to drag in tourism, you need to have a local route; that is the only way to bring in foreigners as tourists into your country.
We are talking of Dubai and Etihad. Dubai is Dubai, they do not have internal flights, so the only way they can get people to come into the country is by setting up a national carrier.
Your policies and agendas must be clear before you fly a national carrier. Even in Dubai they are all flag carriers like Fly Dubai, Emirates, and Etihad.
But when you have countries with a fragile economy, countries like Rwanda, South Sudan, Gabon, and Cote d’Ivoire, Nigeria has gone past that stage. We cannot be equating our economy with those of those countries.
Government should not involve itself in setting up a national carrier?
Yes. The idea is archaic. Rather, we should have a flag carrier. The government should just make it competitive so people can bid for it, just like PHCN (Power Holding Company of Nigeria.
Just say there is a route from Lagos to London or to Malaysia, who wants to come and do it? The government should just be getting 10 per cent as it is doing in PHCN.
Come and bid; just show me your competence and your technical capabilities or your joint venture (JV) partners, we will give it to you.
This is the benchmark, come with a JV partner. Then because the foreigners know Nigeria is a fertile ground, they will look for a local partner to form a JV partnership with.
Just as British Airways did in South Africa. There is a British airline flying in South Africa called Comair. As a British airline you want to go into South Africa to distribute; you get to Johannesburg you are stopped and cannot go anywhere.
So they said they will do partnership with a handling company called Bidvest. They joined with the handling company and formed an airline called British Airways Comair.
If you want to join with NAHCO go ahead, or First Nation, Dana, or any other local airline and form something, an alliance. But when you leave your border porous and hand it over to them, how does that create jobs and employment for your youths, and how does that contribute to your GDP?
Today, we are talking of $10 billion aviation capital flight in Africa. Apart from Nigeria being responsible for over 50 per cent of that money, we can reverse the trend not only to take our own but take that of other African countries to join ours because we are the big brother and we have a strategic location.
So when a company is flying from Mozambique and flying to Europe it will fly over Nigeria. Same thing with those flying from South Africa.
