NIGERIA NEEDS AN AVIATION ROAD MAP-NICK FADUGBA, CEO, AFRICAN AVIATION
While acting as a catalyst to stimulate the growth of aviation in Africa so as to measure up with what obtains in Europe and America, Fadugba has been confronted with challenges ranging from cold-shoulder attitude of African government to aviation, unwillingness of airlines on the continent to partner, among other business blights.
He, however, said the burning passion in him would consume all the daunting challenges, assuring that he would fight on to see African carriers competing stiffly and probably chase out the intercontinental airlines that currently rule the African skies.
While extolling some African airlines for working hard to hoist the continent's flag on the global aviation scene, he urged the Nigerian government and airlines to wake up and take their rightful place as African giant.
He advised that the low level of aviation business in Nigeria does not call for envy but collaboration with successful African airlines to attain greater heights.
In boosting aviation in Nigeria, he called on the government to draw up an aviation roadmap or blueprint which will be the compass of any aviation minister in this urgent task of planting the country's aviation sector on a progress path.
In this interview in Addis Ababa conducted after the 18th Maintenance Repair and Overhaul Africa conference, the African Aviation boss speaks on his passion for aviation in Africa, his travails as a safety preacher, vision and more.
About African Aviation
We do three things. African Aviation Services has three main roles. One: we disseminate information through African Aviation magazine which was launched 19 years ago in 1990 to be precise. Two, we hold conferences and seminars such as the one on the MRO and the African aviation finance conference. Third, we're international aviation consultants. And these were launched 18 years ago. And we like to focus on two main areas, others too, but two main areas drive me in terms of African aviation. One is funding. Our airlines throughout Africa are under capitalized for various reasons. And our first priority when we started this business was how we could assist airlines in Africa to attract funding. So, the first conference was, Aviation finance for Africa.
Our next concern was if African airlines cannot buy modern aircraft, if they have no money, then they must be properly maintained to ensure safety. So, you see, when we talk about MRO maintenance, it is actually safety because the fact remains that without adequate maintenance, you cannot run a safe airline. And if African airlines cannot buy new aircraft, all those 'tokunbos' they were buying in those days, at least, they should maintain them properly. I am just trying to get a theme going on how we can assist or be a catalyst in Africa to help funding and to improve safety through adequate maintenance. These have been the driving goals of what I have been doing for 19 years.
First of all, my specialization after the university was Journalism. I read Mass Communication at the University of Lagos. But I had an interest in aviation, so I married the two. And, in fact, I did work for Daily Times and African Magazine in London. And in addition to writing on economics and politics, I always wrote on aviation in Africa, specifically Africa because I felt, from a very early age, that aviation can be a catalyst in bringing Africa together. This is because if you looked at the transport network in Africa, the service transport like roads, rail, rivers are inadequate.
The roads are unsafe; you cannot travel from Cairo to Cape Town or from Lagos to even Dakar by road. I am sure it is very difficult and mostly, completely impossible. However you can join Africa continent by a strong airline network. I started the venture in 1990. So, for 19 years, we have been publishing the African Aviation magazine. And then for 18 years, we've been doing the African Aviation conferences. I think throughout, we've had a common theme that aviation can unite Africa. And we love aviation and we love Africa more. So, beyond aviation, it is my desire to bring the people of Africa together for trade and tourism and commerce etc, through air transport networks that has been propelling the movement. And Ethiopian Airlines was one of the airlines that, in the early days, was actually doing so well in Africa. They pioneered the networks throughout Africa. And, of course, they were a source of inspiration on what we are trying to do.
Let me say here that aviation journalism is very popular now in Africa and in Nigeria in particular. But when we started it was zero and people thought we were missing the road. For example, they told me 'Nick, look the little money you have, don't waste it. Look at the Middle East, look at another market, Asia but it is not happening in Africa aviation wise.' But you know, it reminds me of when two shoe manufacturers went to an African country and one turned back and called his manager in Europe and said this people in Africa don't wear shoes and so there is no market.
So, I better go back home. But the other shoe manufacturer said 'in this place, they don't wear shoes and exclaimed, what a huge market!' He went ahead to convince himself that of all the people that are not wearing shoes show he could make shoes and be selling to them. So, it is your perspective and the way you look at situations. Some see adversity in opportunities and some see opportunities in adversities.
So when people were telling me that there is no market in Africa, I was confident that we can create the market to be a catalyst. You know, because we've 800 million people in Africa and that makes us a huge continent. And more so, Africa people especially in Nigerians like travelling when the air transport market is created. And what I really want to point out is that over the 19 years that we have been doing African Aviation, of course, as a Nigerian, I did take great pride in Nigeria. And I am also aware of the things we need to achieve. We have achieved a lot but there is a lot more to be achieved. We have not optimized what we can do and, therefore, it has been sad for me often to look at the state of the aviation industry in Nigeria.
The problem with Nigeria's aviation
It's painful to realize that over the two decades now that we have been in the business and yet other African countries are ahead us. Worse still, other African countries are benefiting from the Nigerian market by way of flying high number of passengers and yet Nigeria has all ingredients to have a modern and vibrant air transport industry and yet we don't have it.
One of the reasons is finance. Our airlines in the past have not been bankable. Only recently have they been able to attract foreign investment.
Two, government interference and instability of the appointments in the sector have been a bane of aviation development in Nigeria. For example, with due respect, of course, to all ministers in Nigeria. We have had, I think, about five ministers in aviation in seven years. And personal I want to pay tribute to the new minister, Mr. Babatunde Omotoba, for, at least, making the effort to come here to meet people and learn a little bit more about the industry. This is truly a great initiative of his. But the instability in the airline management, look at Nigeria with a growing population and yet what killed Nigerian Airways-government interference.
The constant turnovers of ministers, the instability in the regulatory environment, the inability to get Category 1 are all major setbacks for Nigeria. More so, I really want to pay tribute to Dr. Harold Demuren and his team at the Nigerian Civil Aviation Authority (NCAA). You see, he is a man that we can be proud of. He is very respected internationally and he is very good at what he does. However, I want to question, not Dr Demuren, but the system of Category 1. What is the problem? Why is it taking so long to attain it? What are the areas we need to address? Why are we not tackling them? Where is the problem? We need to find out and address it urgently. This is because as long as Nigeria does not have Category 1, the Nigerian airline industry will have its hands tied behind its back.
Why African airlines must merge/cooperate
Delta Airlines is now flying to Nigeria daily from Atlanta. Very soon they will fly from New York to Lagos daily. That means double daily service from different destinations but from the same country. Tell me, by the time Nigeria gets Category 1, there will be no airline in Nigeria that will be able to compete with Delta. This is an airline that has just merged with Northwest. They have a fleet of 800 aircraft. This is more than the whole fleet of the entire African airlines. How do we expect Nigerian airlines to compete with Delta? And unfortunately for us, Nigerian airlines and by extension, African airllines are reluctant to work together.
They are too reluctant and yet in Europe, we are seeing KLM working with Air France. We are seeing Northwest working with Delta. Why can't we see airlines in Nigerian working together for common objectives? It evolves greater efficiencies, profitability etc. I quite agree that airlines cannot be forced to merge, especially ones with diverse business strategies, but they can cooperate on certain routes or destinations. Why fly almost empty on certain saturated routes when you can combine flights? As far as I'm concerned, business must overtake ego if it exits. It may not even be ego but other factors. But I am sure that if airlines in Nigeria, in particular, could work together, they will be stronger to compete with foreign airlines.
Yes! I am also concerned that in Nigeria, the capital flight out of Nigeria every year, every month by foreign airlines (not Nigerian airlines), is tremendous. The airlines are adding to our market by bringing sophisticated equipment and reliable schedules and all of that, which is a benefit for Nigeria though. But when you look at it, in terms of economic development for Nigeria, it is a drain on the economy. I am not saying they shouldn't come into Nigeria, but I am saying that Nigeria should rise to the challenge and our airlines should be able to match them. But because of years of instability from the government and on the part of the airlines, we're woefully far behind at the moment and it is going to be a long time before our airlines can ever match the Europeans, the Middle East Airlines that are coming in cash rich, tons of money and our airlines are just there, struggling to make it.
However, I want to commend the Nigerian airlines that are re-equipping their fleet. It is really a huge achievement. Arik Air, Virgin Nigeria, Aero and I think Bellview is about to re-equip and it's quite commendable.
Need for MRO facility
There has been tremendous transformation in Nigeria, but where is the MRO facility? None. Where is the training? We have the Nigerian College of Aviation Technology (NCAT). Now, at this conference, we have heard that Ethiopian Airlines has trained hundreds of pilots and technicians. Not only for Ethiopia but for the whole of Africa. How many pilots? How many technicians and engineers have been trained in Nigeria for the past 10 years? And match that with what Ethiopia is producing. How can a great country like Nigeria explain that? We need to buckle up. You know in aviation, you can be left behind. And we are being left behind. We are at the back of the bus. And other countries that are smaller and weaker than Nigeria are at the front of the bus. And we need to move forward. We need to get our act together. I think the present government are trying their best.
But I do worry about the turnover of ministers because the airline industry is a long term industry. If you have a short term period for ministers, then there is instability. One minister will come along, he will take time to understand, understudy and by the time he has got the grips with the challenges, he is out. Another man will come in, with good intentions and the cycle continues. And meanwhile, we are left behind. Ethiopia is a state-owned airline, hundred per cent. And yet the airline runs on its own like a private entity. The government doesn't interfere in the running of the airline. They have a billion dollars turnover, a modern fleet and they are making their money mostly in Nigeria. They are doing a great job and we should not envy them. We should examine how they did it and how we can emulate them and even over take them. That is my view really.
Minister's pledge to build a maintenance hangar
Let me tell you something, in my library gathering dust is a study of probably over 10 years of maintenance facility for Nigeria national hangar complex or facility they called it. This more than years ago. What has happened, nothing? And yet we have many airlines, our fleet is growing. Nigeria's need is a maintenance facility. There is no serious aviation nation in the world without an MRO facility. And until we have it, we cannot be taken as serious in our aviation. Now, I commend the aviation minister for making plans to implement it. However, I must stress, it must be commercially driven and not government run because we have seen in the past that government-run doesn't work in Nigeria. It must have government support and push, but it must be commercially driven to make it viable. And whether you put it in Abuja or Lagos, it is debatable. In Lagos you have the business. But in Abuja you have the land, the wide space to make it. So, it is debatable.
So, I think an economic analysis should be done to get the perfect location. And also the types of aircraft to be maintained and also the partner. The critical thing is the partner. We have seen with Virgin Nigeria that the deal was not structured optimally and now it is beginning to fall apart. We don't want to repeat this in Nigeria. I want to make an urgent call to the Nigerian government. As they move to privatize, we must have a Nigerian aviation blue print. Nigeria needs an aviation blue print because when you are beginning to privatize airports etc, we are seeing confusion. Look at the confusion now between MMA2 and FAAN. This is a perfect example of a non properly thought-out privatization process.
Now, I am hearing that other airports will be privatized in a miss-match way. We need a coordinated plan. Experts should be brought together. There are many experts in Nigeria and even internationally that we can call, to sit down and draw out an aviation road map, a blue print for Nigeria. So that when the government is privatizing airport and other facilities, we don't have clashes, cross purposes. Because what we have now is that FAAN is being starved of money because MM2 is taking over their business. MM2 is not optimally built in terms of tarmac and facilities. And don't forget under the contract MM2 has a monopoly. So, if the monopoly is too small, then we are already constraining ourselves. How are we going to grow MMA2, I must commend Wale Babalakin, of course, he's done a great job. But what I am saying is that, in terms of Nigeria, we need to be able to harmonize our plans, so that we don't have this airport privatized, that airport privatized and yet they are working at cross purposes.
We have to work together, but we need a road map, we need a blue print. So, that any minister that comes in, he can follow the blue print which is there and perhaps ratify it. They don't have to come up with their own plans. And, of course, every minister that comes in, they have their own advisers and you have many interests at stake. But I really commend the minister for having plans to build an MRO facility. But I would like to humbly recommend to the government that they should be part of an aviation blue print for Nigeria to move the country forward and for Nigeria to take its rightful place in the aviation map of Africa. Because now we are hearing Ethiopian Airline proudly saying that Addis Ababa is the aviation capital of Africa.
Come on! Where is Lagos or even Abuja? But you cannot challenge them because they'll ask: Where is your airline? Where is your fleet and your network? How many pilots and engineers have you trained? Unfortunately in Africa, many African countries and airlines prefer to deal with non-Africans than Africans. And I believe that rather than envy Ethiopian Airlines, you can emulate them. See what they have done. How they have done it. What can we learn from them? Don't be shy to talk them, to join with them to fast track our development. I am very passionate about aviation. I am very passionate about Nigeria and Africa. And I think in Nigeria, we have not been able to get to where we should be by now. And that is owing to a lack of a carefully thought out aviation blue print for Nigeria.
View on having an aviation intervention fund
It is a very interesting idea. But I am very cautious about that type of project because we have seen in the past that funds that have been set aside for aviation development have been misused or misplaced or just generally got lost. And also don't forget that airlines are a commercial business. You can not rely on any subsidies. We must have a good business plan, a sound business plan, a bankable business plan. If you are going into the airline business, you know it is capital intense. If you don't have the money, please go into farming or some other industry that doesn't require much fund, please because safety is at stake and we're talking of human lives take the advice.
Don't try to be what you cannot be. So, what I am saying is that every airline in Nigeria has to sit down and re-examine their business plan, their resources, etc. And what do they want to be in terms of an airline? A niche airline or a big player serving international routes. Some airlines in Nigeria are going to focus on domestic only. Some will be domestic and regional and may be only a hand full will be long haul. But what I am saying is that in terms of fund, I am just cautious that the money could be misapplied and then we're getting back to what we have seen before. So, I'm stressing that every airline must have a sound business plan.
Number one, anyone running an airline must raise equity. They must have the equity and they must also have capital. They must not rely on bailout or subsidies. But then, again, on the other hand, we are in a crazy world at the moment because even banks in Europe and America are being bailed out. Don't forget, a few years ago, these same banks were telling Africans not to bail out their airlines. But now, they are receiving subsidy to keep afloat. So, the world we are in living is very strange in a way. There is one rule for the poor and one for the rich. If you can bail out banks in America and Europe, but you are not allowed to bail out airlines in Africa, it is a contrast. Although, I'm sympathetic to the idea of a fund, but in reality I believe the airline should be commercially funded rather than rely on subsidies.
What I think they need to work successfully together is to have a common vision and a clear cut objective. You cannot work with someone who doesn't have a common vision with you because you have different ideas etc. So, it will be wrong to try and force airlines to work together when they don't have shared objectives or a common vision. It is all most impossible. They will be working at cross purposes.
Proliferation of airports in Nigeria
When you have a country like Nigeria with our population and we are blessed with 21 airports. Now, we should ask: How many of those airports are economically viable? Maybe three. Abuja and Lagos basically. Even Port Harcourt is doubtful because it was closed for so long owing to the runway problem. So, we're lucky, we've airports throughout Nigeria. In spite our market and the way we travel, however, we have not been able to optimize the utilization of the airports even with our huge population. It baffles me at times, when I hear state governments planning to build new airports when the existing 21 airports are not optimally utilized. I sometimes wonder whether the airports will become a white elephant project. If you've two airports out of 21 that are profitable, yet state governments are budgeting billions of naira to build more, it's strange. Some of them are even called cargo airports and if you're a cargo airport, that means you're restricting yourself to just 60 percent of the total business.
The airline business is passenger and why restrict yourself to cargo from the beginning when you've the opportunity to maximize the utilization through passengers and cargo. So, I don't think we are at the stage where in Nigeria, we can have only cargo airports. Which cargo are they taking anyway? Which cargo airlines are flying? How many cargo airlines are in Nigeria? How many foreign cargo airlines are flying into Nigeria that they will utilize only a cargo airline? If you go to Ogun State, they have a cargo airport project. Now I haven't seen the business plan, so I am at a disadvantage. But I cannot rationalize how cargo airlines will take their cargo to Ogun State. How will they distribute the cargo that they drop at the airport? How will the cargo get to Ogun State airport? To be a cargo airport, you need a complicated network, road infrastructure inclusive such that when any cargo is dropped, it can be redistributed throughout the country instantly. And Ogun State is so near Lagos, of course, it seems to be an overlap. I would have preferred, if they could build an airport because it is a state, which they reserve the right to, it should be on a sound business plan. And I am a little concerned that just labeling it cargo only they are restricting their revenue potentiality which could damage economic viability of the project.
That's my view. And I believe about other states; I know Osun, I know Zamfara, Ogun and Akwa Ibom are all building an airport. Now, I am not saying all these airports will not be viable. But I want to sound a note of caution or warning. We already have 21 airports and the vast majority are not economically viable. Many of them have fewer than one flight maybe a week, two or three flights a week. If you looked at the 21 airports, count the number of frequencies, flights per week. You will be disappointed, even though it is a great Nigeria. So, I am saying that billions of naira are being invested in new airports which may turn out to be white elephant project if we are not careful and if thorough homework is not done in terms of the business plan that underlines the project. They should not be prestige projects.
That is a very good question because my experience in Africa has been that there is no other continent in the world where people talk about unity and cooperation as in Africa. We had OAU, we have African Union, ECOWAS etc and everybody is talking about unity, cooperation and what have you. But when it comes to the nitty-gritty, Africans are found to be wanting in actually cooperating with one another. In fact, African airlines would prefer, in many cases, to cooperate with a foreign airline than an airline in their country or in Africa. How can you explain that? More so, African governments would prefer to give frequencies and destinations in Africa to foreign airlines than to their own airlines. In fact it is that practice that held back the development of the Nigerian airline industry because for many years government was hoarding the bilaterals. Until recently, many Nigerian airlines cannot fly outside Africa. So, we have been held back. Imagine all that development time that has been wasted.
The biggest challenge in Africa that I faced in my mission to improve the aviation industry in Africa, the biggest challenge I faced, is the inadequate attention to cooperation that African governments and airlines pay to aviation. They don't place enough emphasis on it. They only pay lip service to cooperation. While in other part of the world they do it practically. So, it can be frustrating. But we know Africa has many challenges and if you have a vision you can not be daunted by such things because it cannot happen over night. It is a long battle. And fortunately, now there are many other participants in the African aviation industry, promoting this type of cooperation. So, we are very pleased that things are moving in the right direction but we're not happy because it is not moving as fast as we would like.
Vision for African aviation
Let's talk about Africa and then Nigeria. For Africa, I have always believed that, Africa we have so many problems that divide us. The countries of Africa were artificial creation of the former rulers but we have to live within the boundaries. The way to bring Africa together is through a vibrant, safe, reliable air transport industry. So, that people can fly from Lagos to Addis, from Cairo to Cape Town, from Casablanca to Mauritius safely. There must be a flight and you shouldn't have to fly through Europe to get there. So, my goal is to act as a catalyst for African economic development and for social interaction through the promotion of air transport in Africa. So, we are promoting air transport with a goal of building the African economy through aviation. I am sure there are many other ways you can build Africa but we think aviation is one of them. We are focused on aviation but beyond that we have a vision that aviation can promote economic development in Africa.
Coming to Nigeria which, of course, is of great importance to me. I have been disappointed over the years that Nigeria has not been able to achieve what it should have been able to achieve. We have all the ingredients to have a vibrant aviation industry. We have the traffic, we have the resources, and we have a very mobile population. From the chairman to the market woman, they all travel. This is very unique for Nigeria. And many other airlines from around the world are benefiting from the Nigerian travelling public. They are making a lot of money. Whereas airlines in Nigeria are not maximizing the revenue opportunities from their home market, owing to several factors.
So, I think what we are trying to do is to act as a catalyst with the players in the market and interacting with the government and the regulators to find solutions and a road map for aviation development in Nigeria which will help to improve the economy and social development. So, aviation is critical and we are very blessed in Nigeria because we have a large population, we have a dynamic entrepreneurial culture. So, we have all the ingredients. Many countries in Africa don't have what Nigeria has. And yet they have better airlines from their aviation. You can't explain that. And we are not trying to pull down the other airlines but Nigerian airlines should look at what has been achieved in other parts of Africa and try to emulate and probably surpass it.