IS LACK OF CORPORATE GOVERNANCE THE BANE OF NIGERIA’S AVIATION INDUSTRY?
(Posted 09th December 2019)
(Chike Ogeah on the left and Toni Ukachukwo, Convener of the Meeting, on the right)
Lack Of Corporate Governance, Bane Of Aviation In Nigeria – By SAHCO Vice Chairman, Chike Ogeah
The Vice Chairman of Skyway Aviation Handling Co. Plc, SAHCO, Chike Ogeah has said that the lack of good corporate governance is the major problem of the Nigerian aviation industry.
He said this at a recent stakeholders dinner organised by Airborne Media and Entertainment Company, publishers of Aviators Africa magazine at Radisson Blu, Ikeja, Lagos.
The event, which is part of the 10th year celebration of the organisation, was put together to highlight, discuss and proffer solutions to the many problems aviation stakeholders face in the Nigerian economy.
Ogeah, speaking to newsmen explained that “the chief problem of the Aviation sector in Nigeria is the lack of good corporate governance. We have that issue even in our larger polity. There is too much of the one man kind of management scenario, and that doesn’t help for a business that is as complicated and as diverse as the Aviation business, so the bane of aviation in Nigeria is the lack of corporate governance.”
Speaking on the other problems of the industry, he shared that, Richard Branson once said at a conference that the easiest way to make a billionaire into a millionaire is to go into the Aviation industry. That’s because airlines pay so many bills. At every point in time, you are paying money as an airline operator. If the plane is in the air, you’re paying overflight charges. If the plane is on the ground, you’re paying parking charges, and you’re paying for cabin crew in hotels in two or more locations, you’re paying for fuel, food, you are paying for SAHCO services, you’re paying to FAAN… so if that business is not well organised, there’s no way it would thrive. You need knowledgeable and skillful people who understand the industry to negotiate for aircrafts. No one pays up front for aircrafts, so if you get the best deals, that brings down your overhead.
The government can help in terms of the Bilateral Aviation Services Agreement (BASA). reciprocity of services made available to others, and other policies, are things than can be done to strengthen our domestic airlines to be able to complete internationally.
Taiwo Adenekan, Aviation economist and veteran aviator, also speaking at the event said, “The problems in the Nigerian Aviation industry are Nigerian problems. Cost of operations are killing local airlines. In domestic operations, I don’t see why government should not assist in bringing down the cost of Aviation fuel, Jet A1, if it means not paying duties on them so that the cost of operation for domestic operators will be brought down.”
He added that “certain airports are not viable and airlines should not be paying parking and landing there. There’s also the need to improve certain airports that have no night flight facilities so that we can move in this country freely, 24/7. Government has a role in that, airlines cannot be doing that. For example, there are two oil cities in Nigeria, Port Harcourt and Kaduna, yet as I speak to you, there’s no link. if you want to go to Kaduna, you have to fly to Abuja first before going to Kaduna. it is wrong. government should help us in most of these things.”
Speaking on what necessitated the event, Tony Ukachukwu, publisher/CEO Aviators Africa magazine and convener of the event revealed that having started his career in the Aviation industry as a cabin crew, he saw gaps in the Nigerian aviation industry, and that there was so much ignorance even after 20 to 30 years of some informed operations. “There was a need to close that gap by creating a platform for people to be more informed, so we started the magazine in 2010,” he said.
Ukachukwu added that “government has no business in business, all they need to do is create an enabling environment for the industry to thrive and make policies that encourage investors. Multiple taxation and other fees choke domestic airlines. Economies that understand aviation as a socio-economic driver take away VAT on spares they import, and give airlines good operations environment so that they can grow. It is when these airlines grow that it develops the GDP of the country. Aviation is the only industry that affects every other sector, including tourism. So if the industry thrives, it will dovetail to every other sector.”
On the impact Aviators Africa has made so far, he said, “Among other things, we also have the Aviators Africa Academy, which is structured to build capacity, inspire and engage the next generation in aviation and aerospace because according to statistics, there would be a shortage of manpower in aviation. Most people coming to invest in aviation don’t know enough about the sector to thrive. Aviation is not buying and selling, it’s a technical sector, so there’s need for technology knowledge.”
Present at the event were many stakeholders from the aviation industry and also travel and tourism professionals.