Nigeria no doubt is one of the biggest markets for aviation in Africa. Last year, Nigeria airlines carried 15 million passengers with the largest share of users coming from Lagos and Abuja. The airline industry in Nigeria contributed over $1 billion to the Nigerian economy and supports over 150,000 jobs nationwide. However, this figure is likely to increase if all problems affecting the airports in Nigeria are removed.
2016 saw major changes in the airline industry in Nigeria. The regulatory body, the Federal Civil Aviation Authorities (FCAA), appointed new directors to help manage the increasing complexity in the nation’s airports. In this article, we would look at major events in the aviation industry in Nigeria for 2016.
Deregulation of Airline Tariff
The Nigerian Civil Aviation Authority in a bid to make airlines in Nigeria competitive, subjected all air fares to market forces. This meant that fares, rates, add-on charges or terms and condition of service, had been fully liberalised. However the condition for reduced and free transportation fares will be guided by the law. According to Part 126.96.36.199 of the Nigerian Civil Aviation Regulations (Nig.CARs), they shall obtain approval from the authority to introduce and or increase add-on charges or surcharges such as fuel, internet booking, insurance, security and similar surcharges, prior to implementation.
NCAA Woos Investors
The Nigerian Civil Aviation Authorities in 2016 laid down the various opportunities for investors in its airports. Investors coming into the country to invest will be given land for aviation and non-aeronautical facilities. The opportunities for investors will include provision of airport infrastructure such as the construction and management of airport hangers, automated car parks, taxiway and aprons, helipads. This also includes construction and management of independent power plant and aviation fuel deposit facility. The NCAA believes this is the best direction to go in attracting suitable investors to its airports as it will help grow its revenue significantly.
Local Training for Staff
The Nigerian Civil Aviation Authorities in 2016 decided to implement local training of its technical and administrative staff as opposed to training overseas. This measure will save the country N2 billion yearly. The authority stated that its workforce had increased significantly from 400 in 2001 to 1500 in 2016 and continuous training of its middle and senior staff overseas was a serious drain on its pockets. It also argued that its main source of revenue, five per cent ticket and cargo sales tax has remained almost static. Worse, airlines and other service providers owe NCAA over N12 billion.
Automation of Air Communication Systems
The federal government of Nigeria had in 2016 instituted a plan to automate all its communications systems in order to improve communication in her airports. This will see the government install communication satellites across all airports. This project if implemented fully will assist the National Emergency and Management Authorities (NEMA) with relevant data in its search and rescue operation. According to Minister of state for Aviation, Senator Hadi Sirika ‘’… few years ago we embarked on a project for the provision of a new aeronautical telecommunication network under the A.I.S. Automation project. The project has delivered a centralised aeronautical database that is currently being populated with data that will enhance seamless integration with other states of the regional databases,” she said.’’
Devaluation of Naira cuts foreign airline revenues
Nigeria entered into recession last year and this necessitated the devaluation of the naira by the apex bank, Central Bank of Nigeria. According to Kola Olatunji, Country Manager for British Airways, Foreign Airlines lost N6.4 billion of their revenues which were trapped in central Bank of Nigeria. In 2016, the Naira was devalued from N198 to N287. “Dollar scarcity is bringing about uncertainties to all businesses. $800m was in our banks that needed to be transferred. We were selling for N197, when it went up to N285. For every $I million, we lost N80 million,” he said. The devaluation of the Naira as well as trapping of airline funds eats deeply into the finances of most airlines which necessitated many to leave the Nigerian market in 2016.
Implementation of single sky policy
The Nigerian government in 2016 pushed for implementation of a single sky policy with other African countries which will allow African air carriers to fly across African skies without restrictions. The implementation of this policy will significantly boost economic opportunities for African countries and consequently reduce air traffic fares. Direct flights to some African countries are not available due to poor flight connectivity. According to Ms Ibiyemi Odunyi, Country Manager of Rwanda Air, ‘’a review of some policies by the government of some African countries would assist the growth and development of African carriers and, ultimately, create more competition on the continent.’’
Concession of Airports in Nigeria
This was probably the biggest news in Nigeria air transport industry in 2016. In September 2016 the Minister of state for Aviation, Hadi Sirika inaugurated a committee to begin the process of concessioning four of the major airports in Nigeria. According to the Minister, this effort will help to put Nigeria’s airports to world class standard. According to the minister, the concessioning process will comply with the guidelines of the Infrastructure Concession and Regulatory Commission (ICRC) to ensure transparency in the process. The airports to be concessioned are; Lagos, Kano, Abuja and Port-Harcourt international airports.
No doubt Nigeria can leapfrog other countries who have develop a sophisticated air transport system, if only its stake holders are willing to pursue aggressively development efforts needed to achieve world class standards.