Kingsley Nwokoma is the president Association of Foreign Airlines and Representatives AFARN in Nigeria. He spoke to Maureen Ihua-Maduenyi about the problems of doing business in the aviation industry and other issues.
Question: What is your assessment of the damage the coronavirus pandemic has done to the aviation industry so far?
Answer: COVID-19 is a big threat to the airline, aviation and airport business. About one-fifth of passenger traffic and almost half of the airlines’ revenue have been wiped out in 2020 following a previously bad 2019. Governments all around the world must act swiftly if we are still going to have the aviation industry. According to the Airport Council International, COVID-19 is predicted to wipe out two-fifth of passenger traffic and almost half of airports revenue this year and this is equivalent to 3.6 billion passengers in absolute term, globally.
Globally, the industry was expected to generate about (US) $172bn but due to the pandemic, we could lose 50 per cent of that or even more. If we want to look at Nigeria and according to the International Air Transport Association, the country is going to lose about 3.5 million passengers which will result to (US) $760m losses in revenue. The worst part is that we are risking over 91, 000 jobs. So, that is a very big problem. Looking at the (US) $4bn African airlines will lose, it is an ugly scenario and IATA has been asking for support from governments. IATA said airlines globally need the government to survive the impact of the coronavirus pandemic. In 2019, African countries lost about (US) $300m hoping that this year there will be slow growth but now we are looking at a potential loss of (US) $4.4bn.
Question: How soon do you see a recovery, do you think it will happen this year at all?
Answer: It is a major impact; we need to get out of it first before we can start talking about recovery. It will be a slow recovery that will take a very long time; it is not going to be an immediate recovery which is why IATA has started asking governments and regulators to support the industry.
They are even asking Civil Aviation Authorities worldwide to provide for cargo carriers who are in the forefront of the crisis to have fast-track procedures of obtaining overflight and landing permits and exempting crew from 14-day quarantine as well as removing economic impediment such as overflight charges and parking fees among others.
They are also asking governments to provide financial relief for them, whether we like it or not, air transport industry is important to economic growth in every part of the world, so, airlines need these packages from governments especially in Africa.
Apparently, it is important that we start to plan now that we don’t even know how long the pandemic will last. We are late planners in Nigeria, we always wait for others before we start but IATA has asked everyone to start planning now because we don’t know what will happen. As long as it is still here, the news will remain depressing. So far, the COVID-19 world realities are such that we don’t know what tomorrow will bring.
We should all brace for what’s to come; a lot of people won’t fly for some time after the pandemic. Our domestic airlines need a lot of collaboration.
Question: With this development, how secured do you think jobs of Nigerians in the industry, especially those working with foreign airlines are?
Answer: Their jobs are not secured, that is the truth. Let us say it the way it is because if an industry is collapsing and it is supposed to generate money to take care of aircraft and staff and they are asking for stimuli, realistically, there will be several job cuts even for those working here, most of them may not have a job after this.
The airline industry has subsidiaries that make money from it; if aircraft don’t operate for instance, we won’t have ground handling companies. That means the ground handling companies will lose a lot of money. Allied companies will lose a lot of money as the airports are closed down, the shops, taxis, parking lots etc. The job losses will be crazy.
Question: There have been calls for the Federal Government to restrict foreign flights to only Lagos and Abuja and allow domestic carriers to work with them by bringing passengers from other cities. What is your take on this?
Answer: I am always rather objective. Other countries have not asked us not to come in. At least we have Air Peace that has been given the approval to go to a number of countries, we used to have Med-View on the London route, Arik was also on some routes including New York, Bellview of those days operated international flights. Bilateral Air Service Agreement is about reciprocity, I don’t think it is a good idea.
If Turkish Airline can get to Katsina and there is an airport, let them go; if they can even get to Owerri and it is an international airport, let them go. That will also encourage us to be more serious; we should encourage our own domestic carriers to fly international, they can do it.
Air Peace is doing it now and I know a lot of people that would rather fly with the airline to Sharjah than join Emirates to Dubai, it is a matter of choice. So, I feel we should leave it open.
Question: How best do you think domestic carriers and foreign airlines can work together to grow the local industry?
Answer: Synergy is the key. In the world of today, it is all about collaboration not only in aviation but in other industries worldwide people collaborate, which is why you see international carriers forming alliances. If you are travelling today on Virgin Atlantic and there is a distraction, you will be immediately moved to maybe Air France or Lufthansa to take you to your destination. That is what alliances are about.
Our local carriers have to build up to that standard because if any global carrier wants to have an alliance there are rules and standards and safety is key, they check records. If I am buying a ticket from Air Peace and my final destination is China for instance, I can travel on Air Peace, get to Dubai and with the alliance the airline has with Emirates or Etihad or any of those carriers I can get to my destination with code-sharing and alliances.
In aviation, code-sharing is key, but there are relevant conditions and requirements that must be met before it is done. It is doable. Our domestic carriers have to code-share with foreign carriers. Same with the foreign airlines, they can sell tickets all the way to Enugu or different states that all our domestic carriers go to, so once they get here, passengers can be taken to their final destination by a partnering domestic carrier.
The foreign airlines and domestic carriers can work this out.
Question: How do you think domestic carriers can be positioned to achieve this?
Answer: They need government’s support; they can’t do it all alone. My problem with the domestic carriers is that everyone wants to do it their own `way; there is no collaboration. I expect them to come together, everybody is collaborating in the world of today, nobody is doing it individually. Internationally, you see Air France- KLM coming together and several other airline alliances. That is what should happen here. It makes no sense for a domestic airline to go to Abuja, for instance, flying empty while it can have an alliance.
If you have about 20 passengers or your aircraft is not full, you can transfer to another carrier who has more and save money on fuel, crew and maintenance. We just have to start from home, we need to come together, form alliance and work together. The world order has changed, nobody does it alone, the industry is capital intensive and not one where you can expect to start reaping immediately. I will advise our carriers to synergise, with that they can have alliances with foreign airlines.
Question: As a stakeholder, how well do you think Nigeria’s aviation industry was doing especially in terms of cargo and export before the COVID-19 crisis?
Answer: Export has not really been our strength; we are more of an importing country. We have a lot coming in from Asia and Europe into our country. That is why when the aircraft come into Lagos, especially because there is really nothing in other climes, you don’t see them go back directly to their final destination, they either go to Accra where they have a lot of pineapples, yams and fruits for export or they go to Nairobi, Kenya to pick up flowers which is a billion-dollar business.
About 90 per cent of cargo carriers that come into Nigeria, what they take out is very little. We need to work on our ease of doing business, which is a big problem. The Federal Government will say it has put ease of doing business policy in place but the question is how easy is that ease of doing business? So the airlines don’t mind going to other African countries where things are easier.
It is not because we don’t have pineapples or yams, in fact, Nigeria is the largest producer of yam and cassava in the world; we are number one in some of these agricultural products but our packaging is a big minus. There was a time in Europe and America that they stopped things coming from Nigeria.
Our packaging is not properly done; our government has to look at that too because smaller countries are getting it, some even get the products from Nigeria and package it properly.
If you go to some supermarkets in the UK, you will packaged okra, mangoes and other fruits from Africa well packaged and very expensive because they are organic. I just hope that after COVID-19, the government will sit down and think. The only thing we are relying on now is oil and we know how much that is now; we can’t continue to rely on that.
We have these agricultural products, even the flowers that the Kenyan government is making so much money from we can do it. We have mangoes, oranges and other fruits, we are blessed. We just need to channel our energy into getting it right. I hope we learn after this pandemic and stay more focused on those agricultural products that we can export. If we can put part of the energy we put in oil on agriculture, we won’t have to rely on oil anymore.
Many countries don’t have oil but they are surviving, even if we have to send people to understudy these countries, we need to do it.
Article courtesy: https://punchng.com/domestic-airlines-must-collaborate-to-survive-covid-19-impact-nwokoma/