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National carrier, airport concession, new terminals beckon

Published by The Nation on Mon, 11 Jan 2021


Despite pandemic wrought challenges which clobbered the aviation sector last year; 2021 presents a silver lining in the industrys cloud. With series of interventions programmed to rebound the industry, KELVIN OSA-OKUNBOR writes that operators are looking forward to the launch of a national carrier; opening of the new international terminals for the Lagos and Kano airports, the entrance of some carriers expected to revolutionise domestic air travel.The year 2020 signed out last week for players in the global air transport industry with experiences that will not be forgotten in a hurry.It was the year of the pandemic, from which many playerscountries, airlines, airport authorities, air navigation service providers, aircraft leasing companies aviation insurance companies, aircraft manufacturers, ground handling companies and others in the logistic value chain -are yet to recover.From job loss, significant dip in revenue, disruptions in operations and other unintended consequences, the sector was worst hit as 2020 lapped into its finishing lines.But, a new year flapped into the horizon with promises of rebound in many aspects of air travel, as Nigeria joined other members of the global aviation community to consider what lurks in the horizon.Significantly, industry watchers are curious on what to expect for the sector.In an interview, Minister of Aviation, Hadi Sirika said the Federal Government would deliver a new national carrier- Nigeria Airin 2021.Sirika said adequate preparations had been made and that N78.96 billion had been budgeted in the 2021 Appropriation Bill to implement the plan for a new national carrier, among other projects.The establishment of the national carrier, he said, would be carried out in partnership with the private sector.He said: In 2021, the sum of N78.960 billion is being proposed for capital expenditure at the headquarters in the aviation ministry and the emphasis will focus on the implementation of the Aviation Roadmap as directed by Mr. President.The roadmap would be implemented through Public Private Partnership (PPP), topmost of which will be the establishment of a national carrier.Other projects to be executed, according to him, are the establishment of Maintenance, Repair and Overhaul (MRC) facility, Agro-Allied Cargo Infrastructure, Aviation Leasing Company, Search and Rescue Unit and Aerospace University with the support of International Civil Aviation Organisation (ICAO).Besides, the minister said 10 new airports would come up in the country in states namely: Benue, Ekiti, Nasarawa, Yobe, in addition others taken over by the Federal Government, namely Gombe, Kebbi, Dutse, and Zuru airports.Industry analyst and Chief Executive Officer, Centurion Securities, Group Captain John Ojikutu (rtd) said as lofty as the plans of the government may be for 2021, foreign technical partners and investors would be needed to birth the new national carrier to avoid pitfalls of the past.Without the participation of foreign technical partners and investors, investors and the public, with the government having some shares but not controlling shares, the dreams of credible national carrier and airport concession may end up being just dreams or another disaster in government-owned enterprises, he said.General Manager, Public Affairs, Federal Airports Authority of Nigeria (FAAN), Mrs Henrietta Yakubu said the authority would pursue aggressive infrastructure upgrade in 2021, as the government would inaugurtae new international airport terminals in Lagos and Kano.Besides, she said the government was looking at other projects for completion and inauguration in the year.However, experts say the new investors will spring surprises in the sector in 2021 as new entrants in the scheduled sub sectorGreen Africa Airways and United Nigeria Airlines will alter the states by introducing a low cost model in airline business.The two carriers will push operatorsAir Peace, Dana Air, Overland Airways, Arik Air, and Aero Contractors to sit up.Also speaking, an industrial relations expert, Comrade Abah Ocheme, said the stakes could be higher for the sector in 2021 if government weighs popular options in the model it should adopt in concession of airports.Ocheme said the horizon looks bright for the sector if the Ministry of Aviation will do the needful by adopting the Green Field, Corporatisation and Full autonomy options in giving out airports for management.According to Ocheme, the Green Field option allows new investors to handle airports like fresh ventures by undertaking construction of new runways and terminal buildings and other facilities.Besides, Ocheme, other industry experts, including Comrade Abdul Rasaq Saidu, who is the Secretary General, Association of Nigeria Aviation Professionals (ANAP), said 2021 presents interesting times for the aviation sector if the government would keep its own side of the bargain in agreements it reached with union leaders on sundry matters in the sector.Industry watchers say the fate of two government controlled airlinesArik Air and AeroContractors in 2021 hangs in the balance, because it is not clear whether they will be sold by the receiver manager- Asset Management Corporation of Nigeria (AMCON).Speaking in an interview, industry analyst and Head Strategy Zenith Travels, Mr Olumide Ohunayo said the year 2021 looks uncertain for struggling carriers as the effects of the pandemic and other problems will push operators who cannot stand the heat of the kitchen out.He said about five prospective carriers seeking to begin scheduled flights in the year have now exhibited signs of partnership with either foreign investors or technical partners, but are pursuing their solo ambition as sole proprietors.Such ambition of Nigerians still willing to invest in the aviation sector, Ohunayo said is enough testimony that people still have confidence in air travel.He urged the new entrants to adopt the Ibom Air template, the lean operations model to keep the business sustainable even as they are welcome to the industry.He said: The new airlines are welcome, those carriers who cannot survive, will die off. The new carriers are welcome; all of them have not shown partnership initiatives with any foreign carrier or organisation.He said the government should look at options on how to package palliatives for airlines and how government could create a window for lending money from banks by airlines with the moratorium.Ohunayo said: The government should consider protectionist policies for indigenous airlines. I expect something good for the much talked about merger for Arik Air and AeroContractors merger instead of starting any project anew about the national carrier.
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