It is an exciting time one again for Nigeria, as the country remains a major force in aviation regionally and in Africa. For this to be sustained, the country needs to right the wrongs. WOLE SHADARE writes
It has been projected by the International Air Transport Association (IATA) that Nigeria would rank among eight fastest growing markets by 2034, just as the country remains a major force due to her population on the continent and will thus continue to have a fair share of the growing market regionally.
Bride of the world
Nigeria is Africa’s most populous country, home to vast resources of minerals and oil – and it’s a burgeoning commercial hub. Could this vibrant nation be the next global aviation powerhouse?
Currently, big-brand flyers including British Airways, Virgin Atlantic, Emirates, Lufthansa and many other mega carriers operate in and out of Nigeria. But it is domestic and pan-Africa carriers that need to take flight to consolidate Nigeria’s status as a business center to be reckoned with.
The nation is ideally located for pan-African flights, but currently there are few options available. The country’s privately run domestic terminal can handle over four million passengers a year, but only a handful of domestic carriers are in operation. Some 40 domestic airlines have failed in the country – including big names such as Virgin Nigeria.
The financial turbulence of the past few years threw a spotlight on many key industries and their respective roles in growth or decline of the Nigerian economy.
Little notice was taken of the aviation sector that has consistently been creating and supporting jobs while making significant, to say the very least, contributions to the global economy.
It is against this backdrop that the country is taking steps to rejig, revamp and re-strategise aviation to achieve maximum benefits. But how quickly the country revamps its aviation is very crucial. The signs of a better aviation industry where airlines and others can be profitable seem not to be in sight for now because of decades of rots that pervaded the entire aviation system.
In the Middle East, visionary leaders have long realised the aviation industry’s potential to drive economic growth and consequently invested heavily in establishing world class airlines that, in no small measure, create jobs, facilitate global trade and stimulate economic growth. ATAG’s data on the Middle East paints an incredible picture: by 2010, the region’s air transport industry created direct and indirect employment for 2.7 million people. It also contributed $129 billion to the region’s Gross Domestic (GDP).
In the UAE, which is home to three carriers that are expanding at an exponential pace — Emirates, Etihad Airways and flydubai — government has committed itself to facilitating this growth. This commitment is apparent in the UAE General Civil Aviation Authority (GCAA)’s sustained efforts to enter into air transport agreements with countries across the globe.
The main issue that the sector needs to address is lack of infrastructure. The aviation industry has grown over the years in Nigeria but most them have died. Infrastructure has remained stagnant. It is just recently that the Nigerian government started looking at airport buildings renovation but they are yet to look at the airside, which has to do with the tarmac expansion, finger expansion, the taxiway expansion, runways and all the likes. The country has also not looked at infrastructure such, as landing aids and landing at night. These will increase the utilization of the airports that will give the airlines profitability because they will be operating at different number of hours. What we also tend to forget is that the parastatals must be re-engineered to face modern reality. Air navigation service should be commercialised. The regulators should regulate in such a way that they don’t choke the airlines.
Bilateral air pact
There is the need for the country to protect domestic airlines whenever the issue of Bilateral Air Services Agreement (BASA) comes up, so that the small market they have is protected from the airlines that are coming in. In Nigeria, carriers are paying 17, 18 or even 21 per cent interest rate, while their counterparts outside the country are paying 3 to 4 per cent or at most five per cent and they are enjoying tenure of about 15 years.
Challenges of the region
There is a definite need to develop Africa’s airports, improve safety and security. The strong growth of air travel puts pressure on airport infrastructure to adapt to the growing demand and changing technology and consequently requires investments. To meet the growing demand, governments are challenged to seek for sources to finance new and better infrastructure.
In recent years, Africa’s hope of prosperity was challenged by economic, security and health crises. While growth remained strong at an average of 5 per cent, and African nations have managed to maintain their image, as land of opportunity for foreign investment, the economy of some countries dropped significantly. To make matters worse, the prices of key commodities – including oil – exported by the continent plunged. Countries such as Nigeria, Algeria, Angola and South Africa found themselves in a difficult position. These countries lack the capacity to finance these huge projects with capital intensive assets. But despite the challenge of poor funding holding them back, it is vital that African airports meet their technology needs. They must be aware and learn of the latest and most efficient technologies, as there is no substitute to safety.
The air transport industry is a very fragile source of economic growth in Africa. It requires a collective awareness and willingness to break up the barriers of protectionism and the liberalization of intra-African airspace, as foreseen by the Yamoussoukro Decision. Investment in human resources, improvement of infrastructure and equipment, and the adaptation of national regulations with international standards are the pillars of a sustainable aviation industry in Africa.
Nigeria, which has large market for aviation, has not yet tapped into the full potential of this critical sector, which can raise the country’s GDP. It is high time the government declared emergency in this sector before it collapses.
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