My Dear Honourable Minister,
As I congratulate in advance of your appointment I want you to look away from those who may be debating whether or not you are the best man for the job and let us seriously get to work as there is a lot to be done.
Earlier this June we remembered families and victims of the last major accident in our airspace; pointing that our airspace has been safe to a large extent for the past three years and we passed IATA security audit of our airports. All these added to series of remodeling carried out by the last administration and the ability to retain our Category 1 FAA rating make a good foundation to build a lot of work you will need to do on.
I will like you to know that it will be very wise to make most of your policies around profitability of airlines without compromise on safety as airlines are the life-blood of any successful aviation system. Airlines support our economy by connecting people and ideas from one point to another in needed time, employing a lot of people and contributing a lot to the FG account in taxes and levies to mention a few.
Highly critical is to the operations of airlines is fuel price; airlines in Nigeria currently spend approximately 65% of their income on fueling leaving a meager 35% to cover for all other expenditure including maintenance and overheads this is a far cry to around 35% of income airlines in other parts of the world spend on fueling improving airline profitability in that region and hence the great news of progress we always hear from them.
While it is not wise for government to subsidise fuel price for airlines considering the state of the overall economy, my advice to you about this is to join forces with other key ministers to push for and support local refining of crude oil which will no doubt bring down the cost of Aviation fuel to our airlines, reducing their expenditure thereby helping them to do more for the better of everyone.
According to channels television, Route development is the life-blood of the airlines, a means of promoting growth, securing profits and satisfying various constituencies. Nigeria is said to be losing over 200 billion Naira annually to international airlines that have been generously given more than enough flight rights into Nigeria at the detriment of Nigerian carriers which are left with just three per cent of the international market share.
The inability of Nigerian airlines to ply most of the routes has led to an imbalance in the over 80 Bilateral Air Services Agreement (BASA) between Nigerian and most countries. We need to start harnessing this potential and fast. My suggestions on that would be to either create incentives to assist private airlines to cover the other part of these agreements or create a national carrier for this purpose. Recently Rwandair started to operate a Lagos Dubai service dropped by Arik. I read the news and became so disturbed. People would speak to you about a national carrier all the time, please make sure it starts for the right reasons and it is run with a lot of strategy, we do not want a repeat story.
I have to let you realize if you already do not know that just before your appointment there was an ugly development; customs decided to start charging airlines duty for importing aircraft parts. Let me highlight that this duty was previously removed to help reduce the running cost of airlines as 99% of these parts are not available locally anyway and to charge them duty on these items that usually cost thousands of dollars monthly was to in fact plunge them into further debt. Honorable minister, this move will shorten the average life span of our airlines and is not good for a lot of our people, please look into this urgently.
Aviation industries develop through intentional efforts made with specific goals in mind, but I am sure you know this anyway. I want you to make intentional efforts to make aircraft parts available locally, it will require you and your office putting together a very rigorously prepared program but the good news is that it is possible; many countries in the world have done it, local Parts availability would improve the profitability of airlines and help our system. The venture is capital intensive and that is why it requires intentional support.
Finally we need MROs locally; my direct suggestion on this is for the Federal government to start one. It is a lucrative business that will create a lot of jobs and generate a lot of patronage from within Africa, most Aircrafts in Africa currently go abroad to get services that require us bringing down expertise and machinery to be able to perform here. If the federal government cannot start one, we can create incentives for private businesses to start one or enter into agreements with world class MROs to come to Nigeria.
I would be glad to see you succeed and I am very sure a lot of Nigerians want that view too.