At a virtual Gateway Forum organised by the League of Airport and Aviation Correspondents in Lagos, the director general of the Nigerian Civil Aviation Authority (NCAA), Capt. Musa Nuhu speaks on a wide range of topical issues in the aviation industry. Ime Akpan reports
NCAA autonomy
Yes, NCAA has autonomy in terms of regulations but NCAA cannot totally remove itself from the ministry of aviation. The ministry is responsible for policy development for the industry and we implement those policies through our regulations. So we must have a line of communication and consultation with the ministry and also if you look at the organisational structure of NCAA, we have the minister, the board and then the director general. So we cannot totally isolate ourselves from the ministry but l can assure you in terms of implementing regulations and otherwise, NCAA is the only body that is doing that and we are doing that without interference from the ministry. There are some regulations that without the political support of the ministry, it will be very difficult to implement those regulations. In the past, when aircraft are grounded, big men went above the ministry; they even went to the Villa and they had those decisions taken by NCAA reversed. But this time around, it is not so. We implement our regulations irrespective of who is involved…. So anybody that wants us to divorce completely from the ministry is not being realistic, it is ministry of aviation.
Aviation goes beyond NCAA; we have other public service providers like FAAN, NAMA, NIMET, AIB, NCAT, then the private sector, airline operators, ground handlers all under the ministry. We regulate them, so there are some connections between us and the ministry, you cannot say because we are independent in implementing regulations, we mustn’t have some relationship with the ministry. It happens everywhere in the world. In the US, the FAA has some connection with the department of transportation. What is important is for the regulatory body to be able to do its statutory responsibility of effective oversight of the system without interference and that is what we are doing.
Steve Oronsaye report on merger of agencies
I read the report in the papers…nothing has informed of any merger. l have asked from the ministry there has been no confirmation. I understand this is an old report done over ten years ago. Somebody just sit down and brought it out. I am not aware of any merger between NCAA and any agency and I cannot comment on what seems to me an unofficial matter. And by the way, in the US, FAA is the regulatory body and it runs the air traffic services which is the equivalent of NAMA. So, it depends on how you run it. I am not saying we are going to do it here because I don’t have anything official but there is this misunderstanding that there is something like that. FAA has a specific structure designed in their own case to ensure that there is no conflict of interest. I am not aware of any merger in Nigeria because I have not been given any document officially.
How COVID-19 affected on plan for the industry
The meeting I had after my hand over from the acting director general, the discussion I had was COVID-19, by then it was not yet declared a pandemic but we could see the trend coming. So, I had started putting measures in place. Firstly, how we are going to run the NCAA as an organisation and business continuity plans in place; how our staff will be working with the development to ensure that whatever happens, we will have people that will be running the organisation regardless of the COVID-19 challenge. We ensure we have somebody who will step in, we prepared to reduce the workforce coming, a lot of them will stay at home and we have what we determine is enough that will run the organisation. Even before the government came out with the directives, we were already working on that. Basically at that time, it was the issue of survival, whatever plans had to be put in place because whatever plans you have, if you don’t survive, your plans are of no use. First of all, we have to survive, ensure the organisation survives, and to put measures for the industry to survive, it certainly delayed our plans.
Economic health of airlines
In the airline industry, the profit margin is very minimal. If you make five per cent profit margin in the business, you are considered to have done excellently well. However, with the COVID-19…airlines’ financial positions are not the best; it is a global phenomenon and there are so many other issues that affect the financial health of airlines that is neither in the control of the ministry of aviation nor in the control of the civil aviation regulatory body. For instance, the provision of foreign exchange, it doesn’t come from us. If a country’s foreign earning goes down, the central bank prioritises and you can understand. Due to the lack of maintenance organisations in Nigeria, pilot recurrent training institutions in Nigeria they have to go outside to do these and that entails a lot of foreign currency, so it is not easy. Also is Jet A1; that is a major factor that airlines have been having difficulties with. Sometime we see induced scarcity and escalatory price. So there are factors that affect the health of the airlines that are not in our direct control. The ministry has tried; it went to the central bank when this government came on board. Nigeria owed foreign airlines about $600 million in arrears, the minister through consultations was able to get that off our back and all the foreign airlines were paid. We visited the NNPC to see what kind of arrangement can be made for the production of Jet A1 and in addition, interest rate. When airlines go borrowing at a very high interest rate which we know in Nigeria, if my profit margin is 5 per cent, explain to me if l take a loan at 20 per cent how I can break even and pay them and make profit. These are the micro and macro factors that affect the health of the airlines. We try through our economic regulations to do the financial audits of the airlines and advise them where we see areas of economic difficulties and see how they can be tackled. One of the things we are doing we want to really strengthen the function of the economic regulation through more training of the staff of the directorate. As you are aware, we are having some restructuring going on; it is to reposition the regulatory body to be able to carry out its responsibilities in a more effective and efficient manner.
Ill- treatment of Nigerian airlines abroad
The advice I will give the airlines is that if you are going to another country to negotiate your services, you should involve the regulatory body, the ministry of aviation and also your embassy in that country. If you, as a private organisation, go and negotiate with a government entity that is trying to protect its own airlines, you are going to run into difficulties. But if you involve the ministry of aviation, NCAA and embassy officials, the country knows that if they make things difficult for our airlines, we will apply the same reciprocity measures to their airlines. So, it makes a big difference. A lot of airlines go and do the deal themselves. They should involve us, carry us along, brief us; we are here to help our airlines grow both domestically, regionally and internationally. I hear them talking about aero politics. Yes, an airline from Nigeria wants to go compete with an airline of another country on their route. Of course they will make it difficult for you but when you carry NCAA officials along, it makes a difference. If you make unreasonable demand on my airlines, I will apply the same to your airlines coming into my country. So it is to their benefits for every to come out with good terms for all the airlines.
When airline are going to foreign countries to negotiate, inform us so that we will sit down with you, guide you, send representative there with you to negotiate with these foreign countries. If the foreign countries have airlines coming to Nigeria and they give unfair charges to our airlines, we will apply the same reciprocal charges to their own coming into Nigeria too.
When we have BASA, there should be fairness in both sides, if there are challenges, they should inform us but if they are going for the first time, they involve us so that we sit down, strategize and send people there to negotiate.
Airlines-staff matters
The challenge of financial health of airlines is not peculiar to Nigeria gentlemen. It is a global thing; the airlines that have received billions of dollars of subsidies from their governments are still laying off hundreds and thousands of workers.
The entire travel and tourism industry has been greatly impacted by the COVID-19 in a negative way. Airlines have had to sack people in order to save cost. Even the major airlines, British Airways is reported to have plans to lay off a third of its workforce, that is about 10 to 12 thousand people; Lufthansa is going to ground all its entire A830 fleet and its 747 fleet, that is a significant number of redundancy; Emirates has laid off people, likewise Etihad and in the US the same scenario plays out. Let us not make it a Nigeria thing but rather see it as a global challenge. I know the policy of the government through the minister of aviation is working to see if some kind of palliatives can be given to the airlines.
Rested airlines and access to federal government palliatives
What I can guarantee you is that anybody can apply, it is their right, whether they are functioning or not, but the issue of palliatives is a policy of the federal government driven by the minister of aviation. They have their guidelines and one of it is that you must be a functioning and performing airline before you get any palliative. That is all I can say; if you don’t have an AOC, the AON I believe also has their guidelines, they are also part of the input and know who and who will get these palliatives from the guidelines. I don’t expect them to put airlines that are not functioning into that list. I can guarantee you from the government side if you are not functioning, forget it. You can try your luck; it doesn’t mean you are going to get it.
How best airlines can run the business
Each airline has its own business model. So, running an airline has a number of issues…and one of these is corporate governance, separation of ownership from the day to day management of the airline business. For a lot of airlines in Nigeria, there is no definite guideline separating the owners of the airline from its management. Over the years it has contributed to the difficulties and challenges a lot of airlines have. Once the Civil Aviation Act is passed by the national assembly and we have a new mandate, we intend to look at that regulation also maybe with the cooperate affairs commission we will sit down and see how we can apply some of these corporate governance issues in our regulations strictly and resolve some of these difficulties we have been facing. And one of the things we are going to do is that the directorate of air transport regulations will be empowered and also enhance their skills and knowledge to really study the business models and plans of airlines and see how effective they can be.
Telecom companies and height clearance with NCAA
Height clearance is a regulatory function of the NCAA which is in our regulations that has been signed and passed by the government. We are dealing with all the communication companies; we are in contact and deliberation with them. Some of them have made part payment and we are working toward getting the remaining payment. Part of our statutory responsibility is to identify obstruction within and around the airports. In the past there were all kinds of erected masts constituting obstructions all around and we directed them to come to us to obtain a height clearance certificate. We are not using it to rake in money; it is based on cost recovery. These masts have constituted a lot of safety hazard for us; we are trying to do a better job to prevent accident. Currently we are building a database called the electronic terrain and obstacle data base. If we can implement it and go live, that will helicopter to fly at night. We are trying to capture all the obstruction that is out there because everybody flies.
