Why Nigerian govt must protect domestic airlines-Olowo
Dr. Gabriel Olowo, the Chairman, Sabre Technology in this interview with CHUKWUEMEKE IWELUNMO, spoke on aviation development 63 years after independence, the foray of Asset Management Corporation of Nigeria (AMCON) into the Nigerian aviation industry and others. Excerpts:
Sir, recently, Nigeria celebrated its 63rd independence anniversary, what is your assessment of the aviation industry?
Each time we celebrate independence, it is with a sorrow reflection for me because things were much better 50 years back than we have them now, but I am tired of talking about the past. How can we make the future growth? Everyone is complaining about the past and the problems, but what is the solution?
First, our constitution is the issue and with the way a lot of things unveiled, it doesn’t make a lot of things happen. Cost of governance and attitude of civil servants to businesses is poor. I do hope the civil servants will see businesses as the fulfillment of their office, rather than see business as a distraction for their office.
If we revisit our 1999 Constitution, you will see that business will begin to flourish and that include aviation business. When you look at many myriads of problems plaguing the aviation sector, it is an evil cycle.
For instance, you saw the agony of Air Peace in this last 10 years or so. Look at the problem of Arik Air, too. Somebody took a foreign loan supported by your national bank guarantee only, used to be off balance sheet and you now converted it to on balance sheet and immediately, a loan that was taken at 4 per cent, suddenly became 16 per cent. How will the system not collapse?
And they are in and out of courts every day. How did Nigeria Airways die? When you look at all the crises, you will see that the system kills all the businesses. So, the aviation industry of tomorrow, how do we proceed?
The few ones we have today must now die. The Air Peace must not die, United Nigeria, Ibom and others must not die. Everything they need to survive must be provided intentionally by the government.
If they need tax holiday because it is immediate services, the government should provide it for them. Foreign airlines were doing businesses for us, yet, we couldn’t meet our obligations of paying them their ticket sales funds and it became a burden on us.
The people who are handling our monetary policy, do they understand monetary policy in economics? And can they balance it with fiscal policy?
Look at the size of government and the cost of government; everyone is clamouring for it. Where is restructuring so that our economic life can come back again?
The Asset Management Corporation of Nigeria (AMCON) has been in the aviation industry about 10 years now, what is your assessment of corporation in the aviation sector?
It is suicidal, criminal. From day one, I have always been against AMCON takeover. I said if you are a receiver manager, you are there to kill the business, but a turnaround manager is to set the debt aside for a period of time and return the business back to life.
What AMCON was doing was to pay the banks indebtedness and still run the airlines. It is not possible, especially the damage of collapsing off balance sheet loan to on balance sheet. Something that was already on 4 per cent and went to 14 to 16 per cent, is automatic bankruptcy and that is why Sir. Johnson Arumemi-Ikhide, the founder of Arik Air has been going in and out of courts. You killed Arik, Aero Contractors and the system also killed Nigeria Airways. So, if you want an aviation that would thrive, everything necessary for the sector to survive must be given.
Do you think with the performance of AMCON since it was set up in 2010, the corporation should continue to exist?
To take a decision on that is very simple; evaluate the involvement of AMCON in all the businesses it took over. You need to appraise AMCON; the government gave it the task and not me. What did they do in Arik and Aero? Are the two airlines still flying? Are the banks they owe, are they smiling now? If all the answers are yes, then, leave AMCON, but if it is the reverse, AMCON should go.
AMCON was set up to recover bank’s funds. How much of those funds are back on their feet? The airlines that they were supposed to turnaround, are they around or they are dead? For me as an aviator, the airlines are dead and I am very sad because the Aero and Arik, yes, they were fumbling because of the challenges on the ground, but a couple of them are surviving it.
Recently, Mr. Festus Keyamo, the Minister of Aviation and Aerospace Development, suspended airports concession and national carrier projects. Some claimed this is policy summersault on the part of the government, what do you have to say on this?
The policy summersault here will be a summersault if those policies were already running and running well. For the airport concession, not much was known. The idea is very novel; the Federal Airports Authority of Nigeria (FAAN) as a government monopoly should not continue to run our airports. We don’t want a government monopoly anymore. We don’t want private monopolies anymore, too.
In the aviation sector, FAAN is a monopoly and that is why we have the highest charges in the world. We need about three airport companies, but as it is, operators don’t have a choice yet on where to sleep their aircraft. But, if you have a choice and the charges are not same, you can originate your flight from anywhere.
Concessioning or whatever name they call it is positive; how far have we gone with that policy? Eight years of that administration, it was still on paper. It was towards the end that they announced that one or two of them have been taken, we don’t know.
The national carrier idea, I have from day one been against it that nothing like that anymore and the experiment they made with Ethiopian Airlines is an embarrassment for that mature airline. They tried to dance to the tune with their own internal political objective because there is no way any airline will start without partnering with anyone. You need these other carriers to partner with, but then, why call it national?
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If it is going to be a private carrier, let it be so that you can compete with other local operators. You don’t need extraordinary benefits or exogenous advantages over the others. You should have a level playing field for all. We have delays because our fleet of aircraft is not enough.
I wish the current minister will establish a stakeholders’ meeting regularly where he will hear people out from every opinion and bring into table all the diverse opinions.
