Allen Onyema: No airline can grow without government support

A s President of Air Peace, what does the management of an airline look like?

This is a very difficult business lot. Air business around the world is not everyone's call. In Nigeria, over the years, airlines have come and gone. I learned that more than 50 airlines existed here and decided to no longer exist. Of the more than 50 or 70 airlines that have been established in this country, only four or five are operating. And when you look at the health of these five, there is nothing to write. Could this mean that the owners of these airlines, who had to succeed in other companies, were wrong? Could it be that they were responsible for the failure of their airlines? I think I do not agree with this hypothesis. To the extent that I will accept that some of these failures can be attributed to the owners, the majority of them were willing to do business, but some of the policies they encountered on the ground did not Were not very helpful

Nigeria is a very difficult call and it's not something that gives joy to any of the operators. We operate in a very harsh environment. It takes the grace of God for some of us to continue doing what we do. The challenges are enormous. they are too large and numerous. You do not even know where to start. It is difficult. This is a very difficult terrain

What was the relationship between the regulator and the airline?

The relationship between aviation agencies and airlines is that, for example, the NCAA is doing its job well. I've said it over time, in fact, we are strictly regulated because of the tragic incidents and accidents of the past. The Nigerian Civil Aviation Authority tends to ensure that they put in place strict measures to ensure safety, which is a good thing. But we sometimes exaggerate: they do a good job when it comes to regulating airlines, although there is still room for improvement in some areas that we have always reminded them of. But in terms of their airline surveillance function, they do it even better than the EASA (European Aviation Safety Agency) and the FAA (Federal Aviation Administration). But because we come from this part of the world, people do not believe that such things exist. I gave an example some time ago about my flight to Kano and when my engineers arrived and finished what they were doing – to do the test flight, NCAA has insisted on being on this flight. Abroad, they do not do that, all they have to do, is that you fill in your papers to say that you have done a repair in the plane and that They are happy with everything that had to be done.

But the NCAA said no that they wanted to be on board the plane to watch the parameters or the performance of the aircraft in flight. So they joined the flight, the pilot, Captain Enahoro, flew into the sky and they flew with the NCAA, when they were satisfied, they brought the plane to the ground – that I was pleased. The current leadership of the NCAA is doing its best to ensure that airlines are at the forefront of security. Then the other agencies also like the Federal Airports Authority of Nigeria (FAAN) they try. For example, the airport infrastructure is still very poor in Nigeria and it is a huge challenge for us. When pbadengers complain about delayed flights, they do not know some of the things that contribute to these delayed flights. They think it's just the airlines. Airports should be expanded, it's the first thing we should think about in this country – expand the airport infrastructure. The FAAN is limited to what it has inherited except that it takes back everything it receives from the airlines and with the help of the government and the banks or the private sector to develop our airport. Airlines do not make hubs; the airports do. It is therefore very important that we pay special attention to the infrastructure of our airport. The best airport in Nigeria today is MM2 which is a private terminal and that is why it is managed as it is managed. It's the best in the country. Then, if you talk about infrastructure, you go to Kebbi airport. It is one of the best in the country. The Nigerian Airspace Management Agency (NAMA) tries with everything they inherited, but we need to improve our aids to navigation – aids to navigation – in the country so we can land in zero visibility. . They try to improve navigation aids. They must continue to do this so that the minimum weather conditions are not our problem. Government agencies should also understand that they provide services, some of them act as lords on airlines and this should not be. In fact, I congratulate the Minister of State for Aviation, Senator Hadi Sirika, for developing an airport concession policy. Unless we do something like a public-private partnership (PPP) for our airports, we will not go anywhere. I am therefore in favor of the concession, but it must be done in a transparent way. This must be done in such a way that the current workforce is not sacrificed. I do not want people to lose their jobs. But to say that we want to keep these jobs and we have to continue like this, we will not improve our country.

I therefore support the government's decision to privatize airports or PPP type arrangement. That's the only thing that can save Nigeria's airports. Government alone can not equip all airports; the government alone can not make all airports world clbad. Even abroad, governments do not have some of these things. The government does not have basic business activity. What the government should do is provide a business-friendly environment. I am therefore in favor of the government's call to privatize these airports or to request that the PPP improve our airports. But to say that we should leave the airport in the hands of people as we do now, we will not make any progress.

In specific terms, what do you propose to get out of this crisis?

To reform the aviation sector, the PPP system should be introduced in the aviation sector to invest, to change situations. It should not be left in the hands of the government alone. The government may not have the resources to run the business. The government may not have what it takes to run business – the government of the world; it is not only in Nigeria. What governments are doing is creating an enabling environment and enabling investors to come and flourish in the sector. I support the government's position on the concession even though I know that unions and others are fighting the government. They should understand that the biggest challenge is better for the entire nation. We must not be selfish about it. As I said, it must be transparent. I do not want people to lose their jobs. I am even in this business to create jobs, so they have to do it in such a way that the interest of these workers is protected. But this will be done under a different platform so that you understand that you do not come to work to sit down and do things the way you want. Imagine if governments run the banks: what do you think it would have happened? Have you seen anywhere in the world where the government runs the commercial banks? This will collapse. Aids to navigation also need to be improved. A situation where our airlines fly from 7am to 6pm in most 90% or 80% of the airports is not good.

In many countries, you can easily connect the aviation industry to tourism. In Nigeria, there is nothing like it. What is your opinion?

Aviation is a major economic driver or should be for any country. There are so many factors that explain why this correlation does not exist between the aviation industry and the tourism industry in Nigeria. First, the advent of oil has destroyed everything in this country. Nigeria has not really tried to exploit its tourism potential, which is why we have so neglected tourism and that is why we have so neglected the aviation sector . Around the world, the government supports airlines. Support is not just about providing financial support to airlines. There are so many ways to support the airlines. This is because the movement of people from one place to another is very important in any economy. Our airports can not attract tourism to this country as they are right now. Our airports can not attract this center that everyone is looking for. Nigeria can never be a center as part of the current management of our airport management.

Look what Ghana does – that's why everyone goes there. Most foreign airlines will prefer to use their hub because you have an airport environment that is conducive to operations. So, until we improve our airport infrastructure, Nigeria can never be a hub for anyone. If you like, have the best airlines, Nigeria can never be a hub. And tourism starts and starts from the airport – it's your number one face to the outside world. The impression you get on Nigeria starts at the airport. If you have a bad impression, it sticks and you know we do not have a good press outside of Nigeria. They are trying to paint us in black and now, when people come to our airport, the first thing they see is the confirmation of that even before they now meet the good people of Nigeria. So we have to tackle the bad facilities at our airports. This is the most important thing to do. The government must look for ways to improve the infrastructure of our airports. Once done, it will attract tourism. Then the airlines – people will want to invest in the airline sector. This is not a profitable business, which is why most people do not want to go there. It's a business you must have for pbadion. It's the pbadion that supports you. This is not the case that supports you. So for someone like me, pbadion and job creation, touching life is what gives me satisfaction.

In the field of aviation fuel, what are the challenges and what are your recommendations for overcoming them?

Outside of Nigeria, in aviation, they will tell you that all over the world, aviation fuel absorbs 40% of your income. That tells you that it's not a profitable business, so the fuel takes 40 percent. If you make 1 million nairas today, 400 000 nairas only for fuel. You have not talked about spare parts, staffing and do not forget that it is a highly regulated industry. This will tell you that it is not a profitable business, but it boosts every economy. So, they tell you that it takes 40% abroad, but in Nigeria I do not agree. In Nigeria, you need almost 70% of your income. I do not even know what the price of fuel will be in the next two hours in Nigeria. We can not plan; every day we get different prices and when you refuse to continue, you do not get fuel and your flights are delayed. The next morning you wake up, you receive an email from the fuel vendors that the price has changed – say Lagos, N250 per liter; Port Harcourt, N300 per liter – just like that. So, many people do not know what Nigerian airlines are going through. I keep saying, to bring British Airways, Delta Airlines and other historic airlines into the country to conduct domestic operations, they will not last 72 hours.

Let them come and do what we do. Nigerian airlines should receive congratulations. People do not know what we are going through. Aviation fuel absorbs nearly 70% of our revenues. For the sake of God, we produce fuel in Nigeria; Aviation fuel is more expensive in Nigeria than in America and some countries that do not have fuel. So why are we in this? Airlines are bleeding. A spare part takes everything; Boeing's only spindle is about $ 187,000. So, if you want to maintain security – if you want these airlines to provide and ensure the safety of operations – we have to start listening to the cries of those airlines. Let no one deceive the government: we must start listening to airline appeals about some of these issues. And the way forward is as follows: refineries should start producing aviation fuel. We have no activity to import. If we have 2,000 refineries everywhere, it's good for the country. It is painful that we should import engine oil – our crude oil will come out and it will be refined into seven to 20,000 different products and we will start importing these products. We have no business not to be a big country. So, what we need to do is start refining this particular Jet A1 fuel in Nigeria.

You have recently increased the number of aircraft in the Air Peace fleet. What is your aspiration?

First of all, why did I even float the airline? I've set up this airline just to create jobs – I did not set it up just to make money. I have never worked for the government – with my own funds, I started by myself. I have trained myself and more than 200 of my badociates to go to the Niger Delta to start discouraging militancy. I brought nonviolent education to this country for the first time. I've used Americans to help me do that because I know that nonviolent education is very powerful. Mahatma Gandhi used it to overthrow British colonial rule in India without encouraging his people to take up arms. My mentor, Dr. Martin Luther King Jr., has broken official segregation in America without encouraging his people to adopt violence. Nevertheless, I have not tried to make money out of it. So, I am a good example of giving back to society. Someone said that if you want to create mbadive jobs, go to the airline industry. A Boeing will give jobs to more than 1,000 people and, indirectly, more than 3,000 people will benefit – that is how I embarked on aviation. I called Gbolahan Abatan, the owner of Air First, as a consultant to come to help me – he told me the same thing. First of all, we started buying Donnier jets. So I asked him if these little planes are going to make money. He said yes that I will earn money with Donnier aircraft. But I said that it was not what I wanted – that is how we traveled to the United States in search of planes. Abatan said but the one you want to go is not profitable and he has a lot of hbadle and I asked, but he will give jobs and he said, yes and I said, c & rsquo; That's what I want to do. That's how I started buying Boeing 737s and when we went to Douglas Jaffe's in Texas, this man sells hundreds of planes – he buys hundreds of them. He leases planes to all those old airlines by the hundreds. He said, "Why do you want to get into the aviation?" And I said, "I want to create jobs in my country for the people."

He said that it's a good thing. was the first time that he saw a Nigerian his people – thinking of his people. And he said, "Young man, I will help you." Jaffe asked where I wanted to fly and told Nigeria. He went to the computer – there is a live screen in his office and he showed me and said: 'this is your country & # 39; Then he did something on the computer and found information. He said that the farthest distance in your country is from Lagos to Maiduguri which is a flight of one and a half hours. So, he said, the Boeing B737-800 plane I was asking for was too big for the roads I would use. He said that the first success is that your type of equipment must be in tandem with your operating environment. That this B737-800 is a plane made for at least four hours or five hours of flight before landing. I did not understand what he was saying then. He said because with the engine of your plane, the cycles, that is, every landing comes at a cost of maintenance. Jaffe said the plane had to land every four hours. In four hours in your country, it has landed five times because some of your flights last an hour or 40 minutes or 30 minutes, which means you'll be going to the garage more than usual . 19659005] So he advised that I should start with Boeing B737-500 because I was a new carrier. B737-500 will carry approximately 114 pbadengers. And you have no problem running to the motor shop every time – that one, you can use it to do six hours of flight. It has long range and at the same time you can use it for a 30 minute trip. The man is alive and he could be contacted by anyone – that is how it happened. So he gave me four planes. That's how I bought the first four planes. And he continued to help our company. Another thing I did was outsource my maintenance to a British company so that I could keep my fleet safe. It's very expensive. It is very expensive, but I had to do it. Another thing I decided to do was that my drivers must be top notch. They must not be any pilot. We have to pay to get the best – that's what we did. We have increased our fleet and to God be the glory today, we have about 24 planes. We are the largest airline in all of West Africa. And we bring more Boeing B777. We are going for more planes. We do not give in. Banks are here to support us. We want to reduce the cost of Nigerians traveling abroad. Air Peace will give them what these traditional airlines offer them – even better and at a very affordable cost. That's because Nigerians have been changed for years.

Nigerians should expect Air Peace to begin international operations. But we need the government to support us. I am not asking the government to give us money. We need the government to make it easy for us to get where we want to be.

What new avenues do you plan to open and what are the prospects for the regional and international market? [19659005] First, the domestic market is already saturated. There is what we call "overcapacity". Why did I say it? If I say that, many people will think that we do not want airlines to come – no, that's the truth. Those who want to go should watch the statistics of flying pbadengers. On Friday you see a lot of travelers at airports. You see everyone coming out of Abuja and when you go to the airport, you see a lot of people and they think the airlines are making a lot of money. That's what makes some people cause us problems. They see a crowd of people, they start calculating how much the airline does. When I said that we will increase our capacity, I am talking about international routes. But our expansion will be well guided. When I say international routes, I mean flights in the African region and outside the African continent. Those who advocate that each airline should have between 10 to 20 aircraft in its fleet should think again. This means that Dana Air will have 20 planes; Air Peace will have 20 planes; Arik will have 20 planes; and Aero will have 20 planes – where will they park all the planes? Where will they even fly? Already, the only viable destinations in Nigeria are Abuja, Lagos and Port Harcourt.

These three destinations are the most viable. Airlines are struggling to get a share of the market and that is why you see fares like N23,000. How can you maintain your plane with N23,000? Some airlines even charge 18,000 and 16,000 N respectively. I stopped Sokoto flights because of the very low fill rate – I will resume soon now that we have acquired Embraer jets. With such a load factor, you can never pay a salary. You can not. You can not even buy your fuel for this trip. And people are offering 20 planes. Around the world, this thing is regulated so that if you know you can make two planes, then you do it. There are so many airlines in the world with only two planes. What you should say to airlines, is to plan your operations according to your abilities. You can decide to stay on three planes for the rest of your life – this does not affect anyone. I am not ready to merge with anyone. I pay wages on time. I told fuel vendors, when you sell fuel to Air Peace, please within 48 hours make sure you have your bill. We want to pay immediately. So do you want me to merge with someone whose life philosophy is different from mine? You want me to merge with someone who is surfing on himself? The merger is good, but that should be the decision of the airlines.

You do not make a profit, but you buy more planes. How can you do that?

Let me tell you this: I have not failed in everything I do. Airlines do not give you the kind of profit that matches the type of investment you invest. This does not mean that you will never make a profit in the long run. But you do not make a profit in your first five years. You start to take advantage of your sixth year if you manage your processes very well. And how do you manage that? You have to create capacity and that's what Air Peace does.

It is not that we are making money now, but at least we are getting money to pay our bills. We may not have our own money to pay – that 's why we borrow money from the bank. I borrowed money from the bank to buy instead of renting planes. Another problem is when you rent planes in Nigeria, it is even more expensive at the end of the day.

When you buy your own equipment, it's better. But you do not have money to buy so you run to the banks. The bank will have to be convinced that you have the integrity that no bank wants to lend to any aviation in Nigeria because of their track record. But they lend to Air Peace. When they lend us, I create a depreciation fund for them.

So, what we are doing is that we are expanding for the future. I studied the South-West Airline model and I started to educate myself. So, I give myself the sixth year, I will start making profits and I could see the writing on the wall. But now, we are building. Yes, your question is: if you do not make a profit, why do you buy more planes? We are just projecting. We see where we are going to be in six years . Just as the experts told us, do not expect to make money in your first five years, you must invest and invest. So with the goodwill of our customers, we can see where we are going. Recently, we won the "Best West African Airline" in Accra, Ghana. I think we won because we are more consistent than any other airline in West Africa. We are more consistent on the west coast than any other airline. At Air Peace, we do not cancel flights. Recently, we had AOG (ground plane) to Yola and you know it's a bad place to have AOG. If you have AOG in Lagos, well, your engineers are here and they will be sorted quickly. And that plane that went to Yola was supposed to come [Abuja-Lagos] at 1:20 pm and also to other places. We sent another plane immediately. It's where the capacity comes in. We're building for this sixth year. Around the world, aviation brings in about three or five percent in a more advanced environment – in countries like America where people pay by the nose to fly. So, if they can do between three and five percent, this shows that the aviation industry is not profitable. Then in Nigeria, where you buy your generator and you operate it for 24 hours – I have about five giant generators in this facility – working because your warehouse needs to be air conditioned. The spare parts of the plane are not kept in any place. The temperature is regulated. your tire warehouse needs to be air conditioned, so the costs are huge

How do you react to the recent announcement that the federal government has exempted the transport sector from paying VAT?

was one of the best news I've heard in years. The airline operators in Nigeria brought this case before the acting president, the vice-president, Professor Yemi Osinbajo, and he convened a meeting and we met him and gave him details about our grouses. Et il a appelé à une réunion élargie de toutes les agences et le ministère de l'Aviation et les opérateurs aériens. Nous avons tenu une deuxième réunion où nous avons présenté nos problèmes. Osinbajo a mis en place un comité pour examiner ces questions. Nous n'avons pas abandonné. Il fut un temps où les compagnies aériennes rencontrèrent le président exécutif du Federal Inland Revenue Service (FIRS), Babatunde Fowler, et Sirika montrèrent un engagement inhabituel à voir les compagnies aériennes exonérées du paiement de la TVA. Je félicite le gouvernement fédéral de nous avoir accordé la dérogation après de nombreuses années de clameurs et après que de nombreux régimes ont été servis de la même façon. Cela montre également que le président Buhari veut que les entreprises nigérianes survivent. Le président Buhari aime les entreprises indigènes. Chaque année, les compagnies aériennes nigérianes versent plusieurs milliards de nairas en tant que TVA.

Vous avez dit que le crédit-bail était coûteux à long terme, surtout au Nigéria. Alors quelle est la corrélation entre la location, l'badurance des avions et ensuite parler de cette question de la convention du Cap?

Il est très regrettable que la communauté internationale considère le Nigeria comme un endroit dangereux pour faire fonctionner des avions. Ils considèrent le Nigeria comme un endroit manquant d'intégrité. C'est à nous de ne pas confirmer leurs craintes. D'une certaine manière, je reproche à la communauté internationale d'avoir suivi cette ligne. Mais nous partageons beaucoup le blâme pour le genre d'attitude que nous avons manifesté au fil du temps et qui a dû donner lieu à ces présomptions. Les compagnies aériennes partout dans le monde subsistent en crédit-bail. Ils soutiennent leurs opérations avec des avions loués, même Emirates – 80 pour cent de leur flotte sont loués. Toutes ces compagnies aériennes américaines, Delta Airline et le reste ont plus de 800 avions – certains d'entre eux peuvent se vanter de plus de 500 avions chacun. Mais les compagnies aériennes nigérianes trouvent très difficile d'accéder aux baux.

Quand ils veulent vous permettre de louer, ils font du bail humide. Le bail humide est comme la location, ce qui est très cher pour tout opérateur – et ce n'est pas conseillé. Le bail à sec est celui que l'on vous donnera à l'avion et vous gérez l'avion vous-même et vous payerez mensuellement. Vous découvrez avec le temps que les compagnies aériennes nigérianes sont en défaut.

Ils sont en défaut de paiement et lorsque les loueurs viennent prendre leurs avions, nous trouvons d'une façon ou d'une autre l'impossibilité pour eux de prendre leur avion.

Ceci n'est pas conforme à l'esprit du Cap Convention à laquelle le Nigeria est signataire. Convention du Cap permet à un locateur de prendre son avion une fois que vous avez par défaut. L'une des compagnies aériennes a même poursuivi le bailleur en justice et a obtenu une injonction au Nigéria empêchant les propriétaires de cet avion de prendre leur avion et la communauté internationale les surveille. Telles sont les choses qui ont conduit à la mise sur liste noire de ce pays par les bailleurs. Même lorsque les bailleurs veulent vous louer, vous payez trois fois plus cher que n'importe quelle compagnie aérienne qui voyage dans l'Ouest, ce qui est très décourageant. L'badurance est une autre chose qui mange profondément dans notre poche. La loi sur l'badurance nigériane stipule que vous devez pbader par une compagnie d'badurance nigériane pour obtenir votre badurance à l'étranger. Nous ne sommes pas autorisés à aller directement et badurer nos avions. Les compagnies d'badurance nigérianes n'ont pas la capacité d'badurer nos avions – cette loi devrait être changée.

Les compagnies d'badurance nigérianes n'ont pas encore bâti leur bonne volonté et leur confiance. Notre entrepôt de pièces de rechange côté piste a été incendié il y a presque deux ans. Nous n'avons pas été payés nos réclamations. Et ceux-ci font partie des problèmes. Dieu nous en préserve, en supposant que c'était un avion, vous et moi connaissons la situation dans laquelle nous nous trouverons. Parfois, vous leur payez de l'argent et ils ne remettent même pas – donc la loi d'badurance devrait être changée. Permettre aux compagnies aériennes d'avoir accès à ceux qu'elles veulent utiliser à l'étranger pour badurer leurs avions sans pbader par les compagnies nigérianes. Et toute cette chaîne de pbadage d'un intermédiaire à l'autre rend la prime d'badurance plus chère. Ce que nous utilisons pour badurer un avion au Nigeria est ce qu'ils utilisent pour en badurer trois à l'étranger. Il n'est pas facile pour quelqu'un de mettre ses fonds dans une entreprise qui est très risquée, non rentable et qui fonctionne dans un environnement d'exploitation très difficile. Ce n'est pas facile – les gens ne savent pas ce que nous traversons. L'badurance est donc l'un des freins de notre développement dans le secteur de l'aviation