Events in Nigeria’s aviation industry in 2016 are, no doubt, determining factors of the outcome and expectations in the industry in 2017.
First is the expected improvement of passenger traffic which was heavily hampered by the stoppage of flight operations by many domestic airlines in the previous years. For instance, Aero Contractors, FirstNation, and others stopped scheduled flight operations in the last quarter of 2016, creating tension and low traffic flow in the system. It is, however, expected that some of the airlines may bounce back to their normal operations in 2017. Already, Aero announced its return to scheduled flights last month.
If the airport concession plan by the federal government sails through, it then means that there would be infrastructural developments at the various airports, particularly Abuja, Port Harcourt, Kano, and Lagos. That also means a better operational framework for both the passengers and airline operators. With good airport facilities, the operators are bound to offer better services in this year.
The sudden increase in airfare by domestic airlines in the last quarter of 2016 is expected to abate this month due to reduced traffic after the yuletide festivities. Such downward trend of airfares, coupled with a possible solution to the aviation fuel scarcity, may force the air fares downward. This is because the price of aviation fuel most often determines the price of airfares all over the world.
All operations in aviation globally is dollar-based; it means that most of the local airlines’ operations are done in foreign currency which has been a major obstacle to airline operators in Nigeria. It is, however, expected in most quarters, that this lingering problem of aviation fuel scarcity will give way in 2017. Similarly, the government recently granted foreign exchange concession to both local and foreign airlines to assist the airlines in their operations. With government’s assistance in that regard, airline’s operations will never remain the same in 2017.
Aviation is under the Ministry of Transportation which accommodates two ministers at the state and substantive level. With consistent clamour by aviation labour unions to merge the Ministry of Aviation and transportation, there is every tendency that aviation may remain under the Aviation Ministery or be merged into transportation while standing as a parastatal on its own.
The year under review also proposes to be one that Nigeria will make a prominent presence in the international aviation fora. With the election of the Federal Airports Authority of Nigeria Managing Director as President of Airports Council International, Africa; re-election of the President of the International Civil Aviation Organization Council (ICAO), Dr. Olumuyiwa Bernard Aliu; and the opening of Nigerian office by renowned aircraft maker, Airbus, there is no doubt that other countries will begin to appreciate the presence of Nigeria at the global aviation arena in 2017.
It is also expected that there would be improved connectivity within the African region following the grant of flight operations license to the Niger Republic by Nigerian Civil Aviation Authority (NCAA). The airlines which got the designation are Overland Air, Arik Air, Air Peace, and Azman Air Services.
Beyond curbing the voluminous road transportation between the two countries, there would be increased traffic and business transactions within the continent.
While the issue of security and anti-terrorism strategy will continue to take prominence in 2017, the year may also usher in the possible use of drones in Nigeria airspace.
The NCAA had announced recently that it is collaborating with the Office of the National Security Adviser (ONSA) and other industry stakeholders to articulate the use of Unmanned Aerial Vehicles /Remotely Piloted Aircraft in Nigeria’s airspace.
With the plans on ground for the proper repositioning of the aviation industry in 2017, the Federal Government must live up to its commitment to revive the aviation industry with particular focus on airport infrastructure and providing foreign exchange to ease importation of fuel and other aircraft parts for maintenance.
Expectations are high in 2017 as a result of promises by the government to reposition the industry with the rehabilitation of the Nnamdi Azikiwe International Airport runway as the first major assignment for the government.
The Minister of State Aviation, Hadi Sirika, earmarked that the industry needs N1 trillion to bounce back on its feet. If there is sincerity of purpose, this could be a starting point. And if the decision makers repent of procrastination, they would be swift with the airport concession agenda to facelift the nation’s major airports before a national carrier is established.
The private airlines have been calling for a tax holiday to ease their cost of operation and boost their profit margins. If this is granted, the domestic market will improve based on the direction of global economic performance which is estimated to grow 3.4% from 2017, higher than the 2011-2015 average of 2.61%.
The airlines also look out for improved foreign exchange liquidity to which the Central Bank of Nigeria is committed to solving the repatriation crisis by keeping airlines as a top priority for forex allocation. What is needed is to maintain consistency at delivering forex needs of international carriers to boost investor confidence and attract more airlines to Nigerian routes.
Since Jet A1 is becoming more of a scarce commodity, and the airlines can’t do without it, the government should initiate measures for local production of the commodity. It is hoped that with the ongoing Dangote Refinery project and revival of the Kaduna refinery, local refining of aviation fuel will come to fruition. A local refinery for aviation fuel, with high capacity and output, will solve the supply problem.
The NCAA should step up its oversight functions in line with recommended practices of the ICAO. The industry needs sanctions and penalties to defaulters to ensure sanity and discipline. The kind of sanction on Arik Air for violating luggage rules is healthy to reduce or curb incessant delays, cancellations and outright infringements on passengers’ rights.
In conclusion, with a peaceful 2016 and accident-free year in Nigeria’s Aviation Industry, there is a strong belief that 2017 would be better in terms of safety and infrastructural improvements, considering the economic challenges the country faced last year.