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Nigeria to Grapple With Challenges of National Carrier, Forex, MRO, Others in 2023

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With the event that shaped 2022, particularly as it concerns pending projects not yet executed, there are indications that the National Carrier, maintenance, repair and operations (MRO), forex, infrastructure, aviation fuel and other factors would determine growth in the aviation sector in the country.

Stakeholders in the Nigerian aviation industry have said that these factors would be pivotal to the development of the sector positively or negatively.

Analysing the situation, Engr. Abednego Galadima, the President of National Association of Aircraft Pilots and Engineers (NAAPE), regretted that the high price of aviation fuel caused a few disruptions in the past year, but expressed hope that the year 2023 would be better than the previous year.

Galadima explained that with the provision of a more enabling environment, more airlines are expected to come on stream in 2023, while capacity would be enhanced by the carriers.

He stated that with additional airlines, competition would increase among the airlines, which would ultimately drive down airfares, stressing that air passengers are paying extremely high airfares at the moment.

He also expressed hope that the government would have the political will to eventually establish a viable MRO for the country, which would make aircraft maintenance cheaper for airline operators, assuring that the imbroglio surrounding the national carrier would be resolved within the year.

He said “For instance, Ibom Air was charging so high on the Lagos-Uyo route, but when Air Peace came onboard, you can see how the price crashed. It’s what we have been saying over the years. It’s basic economics. Once the supply end is adequate and matching the demand, I think there would be some equilibrium in pricing and more people would fly. That is what we want, when more people are able to fly, it is good for the industry”.

“I expect that the MRO will be solid and running. I expect the crisis around the national carrier to be resolved – let the airline fly. I also expect a very visible and concrete Abuja Airport second runway and again, I expect to see these new establishment Acts given teeth”.

“By that I mean there should be stakeholders’ engagement with the new developments around that. This means I want to see it implemented, particularly in the multi-modal case and the establishment Acts. Those are my expectations.”

In his views, Dr. Alex Nwuba, President, Association of Aircraft Owners of Nigeria (AAON), expressed that 2023 would be a turning point for aviation in Nigeria.

He emphasised that more exciting things would happen within the year, especially in the area of MRO for operators in the country and specifically mentioned the Akwa Ibom MRO and 7Star Hangar as some of the maintenance facilities that would give succour to operators within the year.

Besides, he expressed that the domestic airline operators would continue to wax stronger with new airlines coming onboard, despite the challenges, which slowed them down for most parts of 2022.

Nwuba like Galadima expressed the hope that Nigeria Air would take to the sky within the year, but expected a structure different from the one being canvassed by the Federal Government.

He maintained that the suit filed by AON was not meant to stop the national carrier project, but to redefine the scheme and showcase Nigeria’s potential.

“The national carrier should take off in the new year, hopefully in a structure that the industry would prefer and not in the current trajectory. Obviously, we would see a number of MRO facilities; 7 Star Hangar has completed heavy checks on MD 93 aircraft and we hope they will continue to expand their capability.

“Hopefully, we would see more positive legislation and it would increase greater independence for NCAA, a new role for FAAN, continuing development in the Nigerian Airspace Management Agency (NAMA). 2023 is a pivotal year; it’s a year where things are bound to take a major stride.

“It’s an election year, it would be slow at the beginning and things that are cooking now would begin to show themselves by the middle of the year and we should have a much more defined industry in the new year.

“The litigation is not meant to stop the national carrier, but to force a redefinition of what is a Nigerian carrier. Everybody has said we don’t want a national carrier that is owned by another government – Ethiopian Airlines Nigeria. Everybody genuinely wants us to have Nigeria Air that is reflective of Nigeria and our potential and I think this court case forces us to return to the table to do the right thing, rather than to stop the project,” he said.

Capt. Samuel Caulcrick, the former Rector of the Nigerian College of Aviation Technology (NCAT), Zaria said the government could encourage MRO establishment in 2023 through policy formulation by the NCAA.

Caulcrick also asked the Federal Government to get itself involved in the Jet A1 crisis rocking the Nigerian aviation industry or risk the collapse of indigenous airline operators in the new year.

He opined that the government could purchase the product from the major oil marketers and sell to operators in the industry at subsidised rate, arguing that the government would benefit more through taxes in the long run.

Caulcrick rated the performance of the government high in the past year, but said a lot still needed to be done for the sector to be at par with its counterparts around the world.

“The government can call the fuel marketers and buy the product off them and sell at subsidised rate for the airlines. This is necessary because the government is taking money back from every airline that flies; the airlines are paying charges.

“Definitely with this, the government would make its money back because if they don’t fly, the government cannot make money. For every hour the airlines fly, the government gets some money too, which would have been zero if they didn’t fly. So, the government has to be very flexible,” he said.

The Nigerian aviation industry was on the edge for most part of 2022 with numerous crises of Jet A1 scarcity and skyrocketing price, dwindling fortune of naira against major currencies, astronomic rise in the price of airfares and the falling standard of infrastructure. These militating factors almost crippled the entire sector in the past year.

Also, the plan by the Federal Government in 2022 to gift to the nation a new national carrier, Nigeria Air with its partnership with Ethiopian Airlines failed as the Airline Operators of Nigeria (AON) challenged its choice and the processes that led to the attempted formation of a new national airline for the country at the Federal High Court Division in Lagos.

Apart from this, the attempt to concession the four airports in the first phase of the exercise hit the rocks, Maintenance, Repair and Overhaul (MRO) facility still at the foundation state, the aerotropolis, agro cargo airport terminals are still at infant stages, while the aircraft leasing company project was never conceived again apart from the initial arrangement mentioned by Sen. Hadi Sirika, the Minister of Aviation in 2015.

But, amidst these myriads of challenges that faced the sector, the aviation industry in Nigeria recorded a mild growth, especially as the passenger traffic climbed at 111 per cent within the first three quarters of 2022, when compared to the same period in 2021, according to Capt. Rabiu Yadudu, the Managing Director of the Federal Airports Authority of Nigeria (FAAN).

At that rate, only Colombia with 120 per cent performed better than Nigeria, while countries like the United States, United Kingdom and many other developed aviation countries recovered slower than the country.

The country’s credible performance was attributed to resilience and determination to achieve positive results by the Federal Government and the industry stakeholders.

The airline sub-sector suffered the majority of these rots in the sector as most of them flew with only one wing. Within the turbulent sky two airlines; Aero Contractors and Dana Air, suspended operations. While the former voluntarily stopped operations due to operational and industry challenges, the latter was suspended by the industry regulator – the Nigeria Civil Aviation Authority (NCAA) for the failure to meet its financial obligations and to conduct safe flight operations.

However, so far, the year 2023 has been monotonous, while the current administration winds up on May 29, but stakeholders in the sector say the government still needed to focus on infrastructure development and walk the talk on its six-point agenda for the industry by putting on strong foundation in order to ensure growth in the sector within the year.