Thursday, December 04, 2014

Aligbe: Nigerian Airlines Lack Managerial Competence

Industry consultant and Chief Executive Officer of Belujane Konsult, Chris Aligbe says Nigeria has sustained air operations so far this year without a major accident because of improved safety standards. He however posits that lack of critical competences remains a major problem of Nigerian airlines. He spoke with Chinedu Eze.


It is almost a year now that Nigeria has not recorded any major incident or accident in air transport sector. What do you think is responsible and how can the country maintain that level of safety status?

We thank God that the year has been very good, accident free, a major incident free, so there is nothing that has happened in the industry that is not a common place in the aviation sector. So we thank God for the situation. What made it possible? Let me tell you, for quite some time a system has been put in place and it appears the system is growing and everyday it is getting stronger. People are keying into safety requirements; people are beginning to attempt to self-regulate themselves and keeping themselves under the regulation, knowing that if they don’t, there is an institution that will ask them why they are not doing it. They also know that accident will hurt their market. And I don’t think there is any airline that wants to be involved in an accident.

I said this because a lot of us were afraid when the seat of the Director-General of the Nigerian Civil Aviation Authority (NCAA) was left uncertain. We had people in acting capacity, yes they tried their best but try as much as you can, when you are in an acting capacity you don’t have the full mandate and there are things you will not be able to do. But we were lucky that things have gone on very well. But also we are luckier today that we have a DG sitting in NCAA. So that position has been filled, there is a full mandate, full mandate has returned to the institution, they can now police the industry or do things to make sure that the industry does not sleep again. That is why the safety consciousness in Nigerians has increased. Operators particularly are avoiding getting themselves into that situation where there will be major incident or accidents.

But many Nigerians still criticise the system and that possibly explained why some people believed that the Category One (Cat 1) safety status given to the country in 2010 by the Federal Aviation Administration (FAA) of the US would not be renewed in 2014. Even when it was renewed, some Nigerians dubbed it political Category One. Why the criticism and doubts if so much has been done?

I don’t know those who did it and if they know what safety and airworthiness and standards means; if they know what are involved, if they know that they are a continuous process, there is no end to it, that there is continuous improvement and that once the system is on ground and the system is supporting this continuous improvement, then there is every reason to say yes nothing has happened, things have not started going backwards, there is no retrogression. If they understand it and they still say what they are saying then you can call it mischief. On the other hand it is possible that they don’t understand what it involves and so they believe that because one or two accidents have happened, they now come to the conclusion, therefore we no longer can retain Cat 1, it is not true. So, the people who look at these things, the FAA when they come, even the International Civil Aviation Organisation (ICAO) in all their safety audit, they are looking at the system, they are looking at the individuals manning the system, they are looking at the processes.

The good thing is that we have document, the act is a very, very good document. The NCAA Act has been looked at; it has been certified and well put together to be able to sustain safety and safety regulations in the industry. So these are the things that they look at, they don’t look that one accident has happened. Yes they also want to know why that accident happened. If it is question of laxity from the system then they can say look with this we cannot guarantee safety. But if it is something that happens that you cannot blame it on the system that has been put in place then you cannot come to the conclusion that we don’t merit the Cat 1. And there is nothing like political Cat 1.

The truth of it is that do we have the best of the relationship with the US today? We don’t have the best of relationship, in fact our relationship with the US is not as good as it used to be and I can say that for someone who have watched the aviation industry over the years and known the relationship we had with the US, time was during Kema Chikwe’s period (as Aviation Minister), she could pick up her phone and call her US counterpart Rodney Slater and ask for one thing or the other and could get it. In fact Chikwe demonstrated it excellently well and showing that good relationship between us and the US, but these days there is a cooling off on relations with the US for one reason or the other which to many of us is very surprising. Because we have a president of an African decent and one would have thought that it would draw us closer to him.

We recognise that there is an American President but there is a president of an African decent and we think that it would endear Africa like when he came newly. But looking back one could tell you that the relationship during the Clinton era probably was better than it is today. The other day Gowon was saying that America is not Nigeria’s friend; they have not helped us in this Boko Haram issue. There might have been some challenges but even if we withdraw from ground that help can come, we can buy arms but America said no, we have assisted with $34 million dollars. Yes it is assistance but what is $34 million to the kind of war being prosecuted? It won’t even buy you one fighter jet but that is the situation, so we don’t have that excellent relation that will lead America to give us a political Cat 1.

There is something for those who call it a political Cat1, they know what they are thinking of but there are conditions precedents if anything is going to be done as a favour those conditions are not there. And so whatever we have we earned it and we need to believe in ourselves, have confidence in ourselves that we earned it and we can sustain it. And I am sure that we are in a position to sustain it and will sustain it.

What do you expect the Director-General of NCAA to do to consolidate on the safety standard already attained?

You know I have always argued with those who worried that the current DG is well placed to, not only sustain but to hype the safety standard already attained. We have a firm foundation, you need somebody to build further on that firm foundation and extend the frontiers, that this DG is properly positioned because having worked, having held sway in accident investigation which is basically areas to find out why accidents happen, where mistakes were made, whether on the airline’s side or whether on the safety oversight side. The two or three accident reports that he handled, two before he came that happened 2005 that is the ADC and Bellview, they were handled excellently well and within that you saw how airlines were cutting corners, how airlines did what they shouldn’t do. You saw where there were inadequacies in the regulatory authority, all of them you find it in their report. And so he is fully aware, no airline can deceive him about this or that, given his experience.

Secondly, the two accidents that happened while he was at Accident Investigation Bureau (AIB), which is Dana and Associated Aviation, the speed with which the interim report on Associated came out, it is one thing because before we will wait and wait but we now have a black box decoder that can decode and give the reading on the black box.  So it is already domesticated in Nigeria, it was done in-house and therefore when you look at it that way then you understand that somebody who is on the seat as the number 1 regulator is fully aware of what he requires to do in terms of safety regulation. And so, for me I have no doubt in my mind that we have a competent and knowledgeable person that is handling the policing of the industry in terms of safety oversight. That is what I think and I think people should have confidence too.

Airlines recently said they are considering code-sharing as a way of improving their profitability and stem the current rivalry; do you think Nigerian airlines can successfully do it and how will it help the industry?
Why do they have the 10 years average life span? It is because of challenges of operation of remaining in business. They don’t stay long in business for various reasons. There are so many, the first thing they will tell you is that government is not helping enough; that is always where they go to. Yes there are things government can do to help the industry but the fact of the matter is that most of the airlines experience the same thing, which include low capitalization, the general absence of critical manpower and then challenges of operations maintenance and the rest of them. There are things that afflict them that are beyond their control, but there are also things that afflict them in terms of fact that they don’t have the managerial competence within the airlines generally. How many managers of airlines do you have today?

Even in various places, we have good pilots, we have good engineers but managing the airline is a different kettle of fish. So many of them suffer this and that affects their revenue and at some point they start and come big but they do not survive it. Because sooner than later they suffer revenue reverses in the industry.  Yes, up till today they have not adopted the market principles that will help them grow up in terms of revenue. Like you are talking about code-sharing now, code-sharing has a multiplier effect, it is multi-dimensional because the passenger benefits. And you know that if I am holding airline A ticket, say, like Medview and Discovery.  I am holding a Discovery ticket, if Discovery cancels flight or its not operating I can walk across to Medview and ask for a seat and Medview will offer it to me.

It is less stressful for the passenger, the airline that could not fly that is on the ground gets some revenue from the ticket it has sold and the one that is flying probably doesn’t have full load, it gets additional load from this, so it is a win- win situation. And that can help because when we did our own in the days of Nigeria Airways; when we did their own with British Airways, Nigerian Airways was smiling home. There were no challenges about paying salaries, no challenges about paying pensions and so on. And so when you see such situations you know that this will help grow their market share, this will help in their revenue and this will help to sustain them. So it has been an age long relationship between airlines to enlarge their market share and then increase revenue generation.

And that is why we offered advice over the period but they never listened. Some think that the thing to do cut is to throat of your rival, if you can eat up your colleague’s airline then eat it up by being the number one and let others run after you. They never see that even if you are the biggest airline you will just have to stop and know that there are times you will have challenges. You see if you have more passengers, supposing you are a big airline and you have many more people for one day, for one flight you can say, okay we will put you in our partner’s airline, you take them and put them in your partner’s airline, no matter what you will make at least 10 per cent of that money. If you don’t have this arrangement they will go to another airline and that airline will get 100 per cent profit. But if they come to you, and you say okay we will put you in another airline and you book them on your partner’s airline, you make money out of it and your partner airline makes money out of it.

In which way do you think government can help to facilitate that?

What I know is that what should be tried in the industry is a Soludo (former Governor of Central Bank, Charles Soludo) approach: carrot and stick. If you are doing this, these are the benefits. If you don’t do it you lose the benefits and the benefits will be such that when you see the value added you will say wait a minute, so if I do this, this is the value I will get then you move to it. So, it is a carrot and stick approach. That is what I think we should adopt; the Soludo approach in the industry to make the airlines see reasons why they should go into these forms of partnership. However loose, however strong a partnership is but they need to go into it in order to survive and to create room for those who want to travel.

Some airlines argue that Nigeria is not ripe for operating airlines to buy new aircraft because its high cost which they will not be able to recover from the market. Do you agree with this?

That is total nonsense, arrant nonsense; the truth of it is that, that position has been undermined by Arik.  Arik has acquired new equipment whether it is Bombardier CRJ, whether it is Boeing 737 and Arik has placed order for Boeing 777 new ones, and even for Dreamliner. So, this position has been punctured by Arik and I believe that other airlines as a pick-up will look more towards getting brand new equipment because there are so many advantages of brand new equipment.

Why is it that our market is not yielding much profit to the airlines?

Well, remember that it is a function of the economic well-being of the people. The more money people have the more pleasure they seek. The more money people have the more the inclination to take away areas of stress. If people have enough money they will decide to fly to Asaba or fly to Benin instead of going by road transport. But if you don’t have that kind of money you will go for road transport so it is a function of the economic well -being of the people.

Many Nigerians seem to be against national carrier, why is it so?

Well, I wouldn’t know what is happening within government but all that I know is that a couple of times I have come across the Minister in his public presentations, what has always been consistent is his determination to float a national carrier. For me, reading him, it appears for me that he has a mandate to do that; that is reading him. But I don’t know the inner workings of his mind or the inner workings of the Ministry or government because one is not in the inner circle. But I know that from what I have read, from all the body language, from all the speeches it appears that there is unalloyed commitment to float a national carrier.

Those who say we don’t want national carrier, what is their option. I always ask them what is the alternative. And they say government should come and help the existing carriers to grow up and take the position of a national carrier. And I say to them, first and foremost, it is about 30 years if not more, since 1983, 84 when the industry was liberalized, how well has the private operator grown? How well have they grown?  Research conducted by Captain Mohammed Joji reveals that from 1983 to date 49 airlines have collapsed. That is on the average of one and half per year. And so when you look at it, how many of them have grown? The only one that has shown signs of growth is Arik. I will give the new entrants maybe three, four years to see how they are advancing. I know that airlines like Medview are showing indication of growth but it is again too early to say yes this has happened. But you can see the progress it is making and you see that this progress is not a retrogressive progress.

It is progressive progress as it were; it is forward moving progress. But also in the life of an airline industry it is too early to conclude categorically. You can say these are the signs of growth but let’s say in the next five year you can turn back and look around and say how far has it grown and then you can begin to sum up your conclusions. We talk about Arik because Arik is about eight years and so you can begin to say is this airline growing or not? In terms of equipment, yes it is growing. In terms route network, it is growing because it is adding many routes. But you can say a lot still remains to be addressed in terms of structuring the growth and how the growth will go?

So I say to people even with the growth it has attained, has it attained the growth that Nigerian see and say we have a representative airline globally that can compete, that we can point as an airline that is coming from Nigeria. We cannot say yes. Again I ask them do we need one flag carrier in this country. And I say no.

we are more than 170 million people and it is projected by UN that by 2050 we will be 400 million in Nigeria. So you can know progressively what it is. What do we need? And people who say no to national carrier at the same time they wake up to say government should create job and in the industry you have over 200 young trained pilots that have nowhere to go to. They are not counting the engineers; they are not counting other people in other specialized areas, dispatchers and the rest.

By the time you count them you can see the mammoth problem we have. There are people coming into this segment of the society and they are properly trained but they have no place to work. And it is not a question of saying let me look at the other way, this people are in a field that you cannot substitute their training for other things. They cannot wake up tomorrow and become marketers after being trained as commercial pilots and having been type rated as aeronautical engineers. So this is the challenge. And then who is setting the benchmark in the industry? Nobody is setting the benchmark; no airline today is setting the benchmark today in the industry.
National carrier sets benchmarks in terms of everything, fare and the rest. National carrier offer jobs pick up Nigerians and make sure that these Nigerians can go through normal training before they are fully employed. No foreign airline, no private airline will do that, they want readymade workers who come into the cockpit and fly off and make money. They are not about to take young pilots and see them through this tutelage. This is what national carriers do, this was what Nigeria Airways was doing in its hey days. And so there are so many reasons why we need a national carrier, it has nothing to do with aggrandisement.

Our bilateral air service agreement, we are not servicing anyone of them. Imagine Ethiopian Airline has 28 frequencies in and out of Nigeria; yet Addis Ababa is not a destination, it is a transit destination which can be achieved if somebody wants to, but they are flying 28 frequencies weekly. Emirates so far has 28 frequencies from Nigeria, it has for Abuja, it has 14 frequencies from Lagos, Kano it has. It has not started Kano but it is asking for other places like Enugu and Port Harcourt. So it wants to make sure that eventually it has about 42 weekly frequencies into Nigeria. We are beginning to get into the danger of India, India allowed Gulf Airlines from the Middle East into their country, they are operating 182 frequencies. That is why India airline collapsed. It is now that India has seen the danger that they got themselves into by ceding out all these rights that they now want to refloat. India is thinking of bringing back an Indian national flag carrier. For quite for time Kingfisher in India was doing well but the big boys collapsed it, before you know it, it was gone with other challenges that it faced. So India has no airline representing them.

These global airlines can kill Arik; look at what happened in Dubai. To tell you the truth, I do not believe that they killed Virgin Nigeria on the route. You know why I don’t believe, Virgin Nigeria never planned to be an international operator. It was the government that was forcing it to go international. It planned to be a very strong domestic and regional operator; that was the plan of Virgin Nigeria. Who killed it in the UK? It was flying to Heathrow Airport, London from there it went to Gatwick. What aircraft was it using? It was using a rickety Boeing767, that was what it was using, the same thing on South Africa route. What did it use to go to Dubai? So I do not believe that it was killed, the Virgin group can match any airline man to man. And when you bring people from the Virgin group with that wealth of knowledge, you tell me that a legacy airline can equally drive them out of business, I do not believe.

I am not saying that those airlines didn’t try to do one thing or the other but I don’t believe that they were the sole cause. So we talk about our reciprocal position of the Bilateral Air Service Agreement (BASA) which is poor, we are not reciprocating anything in the area of BASA. So airlines are coming on to scramble, to take over the destinations in Nigeria. Then it becomes political, the Kano State government will cry that the Aviation Minister is not allowing airlines to come into Kano. Enugu wants, and Port Harcourt wants, this is the kind of pressure you have, very soon a lot of states are building airports they call international airports. The will want to have international flights, some time they will start blackmailing the government that the government is not giving them this. Sooner or later people will ask you why Akwa Ibom airport is not an international airport and it will become an issue for agitation.

We don’t have national carrier. If we have all these airports will be fed and operated. When Nigeria Airways was alive, it was operating Calabar, Benin, Kaduna, Markudi, Yola, Maiduguri, Sokoto, Jos and Kano. There was no airport that it did not operate into; it operated all these airports and kept them alive. So it is a domestic airline that should do these things but we don’t have it as at today. Everybody is facing Abuja; it is now that people are saying we can fly Abuja-Owerri, Abuja-Calabar. These are the things that should be, it is a domestic airline, domestic airlines should come together to formidably argue against any of these rights being giving to these airlines and what should be done. Like we said, they can tell them we have giving you these seven frequencies, four of them you will operate alone while the other three if you want them you have to do in relation with a domestic operator.

When they do that; they will come to help the domestic operator to up the standards. It is true that our domestic operators still have the problem of upping standards that is why I said there is no benchmark but a national airline will set you a benchmark. Some of them have excellent in-flight menu service, I have flown Medview, I have flown Air Peace, their services are standard. I haven’t flown Dana recently, Dana used to have good one in the past, I don’t know whether they have kept it. But there are so many other things in terms of standard that have to be upped. So where there is no benchmark you won’t find that but if airlines coming into this country are made to operate some of their frequencies in association with domestic operators they will be able to up the standard of our domestic operation and that is the improvement that we are looking for in the industry.

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