Friday, 15 May 2015

Why the Incoming Government Must Take Aviation Industry Seriously?

Captain Nogie Meggison doubles as the Executive Chairman of Airline Operators of Nigeria (AON) and Chief Executive Officer of Jed Air. In this interview, he speaks on various industry issues, including the much talk-about national carrier and what is expected of the incoming government for the aviation sector, Excerpt
Meggison
The wind of change coming may blow away most of domestic airlines as many of them are not well funded and they have refused to work together, what is your reaction to this?

You see, business is about competition. Competition is healthy; and benefits customers on the long run because it creates efficiency. I don’t think any government will come in with the mind set of taking anybody out of the business, especially private operators. They should come in to encourage and discuss with them. We, as a country, are not ripe enough and matured enough to be able to handle those types of things. So that puts another disadvantage. The government that is coming in should look at the airline industry and its potential of contributing to the economy. And two, it is an avenue for creating jobs. If they look at it with those two prospects in mind, I believe the government can encourage and talk to the airlines.
Capacity-wise, we have the capacity. Nigeria is one of the only few countries in Africa where individuals have constantly invested into aviation on private capacity. You don’t find that kind of strength and that kind of boldness anywhere else in Africa. In Africa you have JVs, banks, companies diversifying. But in Nigeria, you have individuals stepping forward to say I want to go into aviation. The government should encourage them because when your feasibility is clear, then you can make it. But we should be able to run our feasibility without government interference. You know government interference will kill airline operations. The policies will have to be looked at because there are many factors in those policies that will make us contribute. There are different things that are going to be looked at in that policy. It is not a one-sentenced policy. But you have to have a target. Our target, I believe, should be those two policies. One, economic contribution; two, creation of employment and then you now build the team to get to that position.
 There are indications that the in-coming government will bring in fundamental changes in the aviation industry. What would you want that change to be, as the chairman of AON?
Let me start by congratulating General Muhammadu Buhari and the All Progressive Congress (APC) and we strongly look forward to the taking over of the government of Nigeria. Aviation is not a stand-alone industry. So, it is expected that it will benefit from the change. But two things I will always say; if you look at Nigerian aviation sector, where we are and where we should be; we are still far behind.
There were countries that were at par with us in 1960 in terms of aviation development, but if you compare where they are and where we are today you will find out that we are still in infancy. This is because some airlines are still struggling here with two, three planes, where in countries like Indonesia, or even people that started 15 years ago, like the Kenyans, the Dubai companies, Emirates, Air Asia or the Asian Tigers, they have gone too far ahead of us. Nigeria has the opportunity to grow in all spheres from aviation, agriculture to mining and everything. But, if you go back to aviation which is my specialty, there is a huge potential in Nigeria.
If you take Nigeria in Africa, we are in the centre of the trigger point to activate aviation for Africa. But, we have let it go, sleeping. We are doing open skies, multiple destinations with people that we should not. Government should see the industry as a very important sector as the oil industry. Aviation should be given the same attention as oil and gas sector. Nigeria has huge potential in the aviation industry. We are a country of about 170 million and we have 170 million mobile people. We trade everywhere in the world. We have colonies everywhere in the world. Anywhere you go from Zaire to Kinshasa, from Brazzaville to Timbuktu, from Johannesburg to Durban, to Kenya, South Sudan, Gambia, Dakar, Bamako and Niger; you will find Nigerian traders.
Today, Nigerian aviation contributes 0.4 per cent to the GDP. But countries that tap out of Nigerian aviation like Ethiopia’s GDP contribution is over 30 per cent. Nigerian aviation turnover is nothing to write home about. Ethiopia’s turnover two years ago, precisely in 2013 was $2.2 billion.
 How will government approach this change?
Where are we in aviation industry? 60 per cent of the Ethiopian passengers are coming out of Nigeria. So what are we doing? The World Bank has put capital flight in aviation out of Africa at $10 billion. Nigeria accounts for about 60 per cent of these losses. What are we doing to restrain or keep those monies in our country and create jobs?
So, I wish to tell the in-coming government to bring the needed change. I want them to concentrate on two things and not multiple things; one, take aviation seriously so that aviation can contribute economically to our GDP. I believe that with the proper policies in place, we should be able to take it in two years from 0.4 per cent to five per cent.  So, by the time the Buhari administration is ending in 2019, we should have taken aviation industry contribution to the GDP to eight per cent.
In Nigeria, the aviation industry is there for us to grow. So they should look at it economically. Today, as I said, Emirate employs about 350, 000 people, the aviation industry can create employment. Employment does not only mean employment of pilots and other aviators. Today, we even have unemployed pilots; we have 300 or about 400 Nigerian pilots that are unemployed. We can create skilled employment, I believe and I know that if we make that change in the first two years we can employ 5000 and another 50,000 indirectly in the industry.
 National carrier can provide the platform for this change, but most of the operators in the industry are against the floating of a national carrier. How can we actualise all these without a national carrier?
The issue of national carrier to me is archaic. You are talking about analog when things have gone digital. You are talking about telex and moscode when people are doing e-mails, we are in the e-age, we are not even talking about fax machine. Let me just go back into the issue of national carrier, apart from that it didn’t work in Nigeria and it has not worked anywhere else in the world, the national carrier idea was a 1940s, 1950s and 1960s idea. Everybody stopped national carrier by 1960. Europe turned around and privatised all their airlines in the 1960s, and in the 1970s. The last carrier that was a national carrier in Europe was Alitalia.
But a national carrier will enhance job creation?
Are we establishing national carrier to create an employment bureau or to create an efficient airline? If you want to create an employment bureau forget aviation. Government should create a policy that will encourage private participation and investment that will create these jobs

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