Sunday, December 09, 2012

Aviation Fuel Is Cheap But Heavy Taxes Are Killing Us- Shittima

In this interview, Alhaji Kashim Shittima, Chairman and Chief Executive Officer of Skyjet Aviation, which was recently issued an Air Operators Certificate (AOC) by the Nigerian Civil Aviation Authority (NCAA) speaks with NKEM OSUAGWU on some of the challenges in the nation’s aviation industry.
Sir,  tell us about your company?

I am Alhaji Kashim Shettima. I am the chairman, chief executive officer of Skyjet Aviation. Skyjet aviation was formed about five years ago. I was operating my own private flights, but at some stage, I realised that keeping the plane for myself alone was not economical. So what I decided to do was to go into processing my charter licence so that I could give my aircraft out for commercial charters.

I talked to the Director General of NCAA, and told him I wanted the licence as quickly as possible but he told me I had to go through the due process. I took the challenge and decided to do it. I am happy today that I have done it. The success is attributed to the team of the people I have working for me.

Why did you decide to invest in the aviation industry, despite its challenges?

You know aviation industry is not an easy industry where you can easily make money. It is an industry with a lot of challenges. There are aircraft issues and a lot of other challenges, including some government policies.

However, I think the minister of aviation is on the right track and she will take us to the place where we need to be. But there is a serious challenge in this industry. Every time the government talks about attracting foreign investors, but there are lots of people in-house who are willing to invest in the country, all they need is the support and enabling environment to do it and I believe that before  foreign investors can come and invest here, you need to show them that your own people are doing it, then they would come and would want to partner with the indigenous investors.

We have in-flight, who are with us here today, they are one of Embraer’s service facilities in London, and they are one of the biggest in Europe. They flew in with me a few days ago and they are here to see our facility because we want to partner with them on maintenance.

 Where is your company based and how many aircraft do you have in your fleet?

Right now we have five aircraft. We have a Legacy C650. We have a Legacy C600, we have a Hawker 900SP, a Hawker 800SP, and a Legend 45 SR. We are based in Kaduna.

I have had this business probably going on for the past five to six years and I think if I have gone through all the rigours involved till now, I am very sure I am capable of sustaining it. We have both Nigerian and foreign pilots and our crew members are Nigerians.

 Do you think charter operations are sustainable in Nigeria?

I am not only doing charter services. I am also doing maintenance and management and we are also going to sell aircraft.  Right now we are doing line maintenance. We are a South African-approved line maintenance organisation. As we go now with our AOC, we’ll go to the next stage and by next year we will bring in more aircraft.

Right now we have three products we deal in, in our maintenance line. We have Embrear, Fokker and Lear jet. We still do their maintenance right here. At the moment, we do about three but eventually we will go into the maintenance of quite a good number of products (aircraft types), but you have to understand that this is not something you can do overnight.

How would you assess the aviation industry in Nigeria?

The aviation industry in Nigeria still has a lot of challenges because I have seen it. However, I believe that at some point, the airline operators and the authorities need to sit down to look at issues critically.  But so far, the minister of aviation has done her best in securing import duty waiver for us on aircraft and spare part importations. Until it was waived, it was only Nigeria that was paying that kind of duty on aircraft which is a lot of cost for the airlines to bear. For now I think we are on the right track.

 What about aviation fuel?

Aviation fuel is key to our operations and for now it is government regulated. I don’t think there is much airline operators can do about that now. However, I think it is relatively cheaper in Nigeria compared to global price.

 Can you list some of the challenges facing the aviation industry in Nigeria?

Right now, one of the critical aspects is maintenance of our aircraft which is cost intensive. Another burden is the issue of taxes. We pay a lot of taxes especially some of us who are operating foreign registered aircraft. But then I don’t understand why I should be considered foreign when I am investing money locally here in Nigeria. We have invested over $5 million in our facility here in Nigeria. I don’t understand why we keep paying high on landing charges and these are the things that can kill an airline. About 90 per cent of our employees are Nigerians and we create jobs.

The government or the agencies in the industry would have to consider all these. These are some of the challenges.

And also, sometimes in terms of inspections done by the NCAA, these have to be timely, because the moment you keep an aircraft on the ground it is cost for you, whether you fly it or not, it is just a cost for you.

 So we need to act fast. For instance, if I have a maintenance work to do on an aircraft, and I order the spare part from Europe, when it comes, it will be sitting at the ports with the Customs for over 20 days, and the aircraft will be on ground. In Europe, these things are taken care of within 48 hours maximum. However, things are getting better. I believe in the industry now and I think there is hope, but there are still grey areas that need to be sorted out.