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Government involvement has always left the taxpayers,
the travelling public and the aviation professionals worse off:
•
Nigeria
Airways was liquidated with liabilities of over $320 million. However its high value assets
and expansive landed properties in Nigeria and its outstations including London
were auctioned for next to nothing. The hangar, workshops, huge stocks of aircraft spares were simple handed over to for pittance. The gullible Nigerian taxpayer was made to bear the brunt of these frivolous debts.
•
We
still remember the horrific experiences of the travelling public that precedes the
inglorious exit of international operators like Bellview, world Airways, and
recently Air Nigeria. These range from passengers being stranded in foreign
countries without a shred of consumer protection, to those being forced to pay for fuel in a bid to obtain a service
they have already paid for. We don’t need to look far to prove that the
consumers of aviation services are badly treated and disappointed. On the local scene operators do not even bother to explain causes or durations of flight delays or consider it's consequences on passengers with international connection. The poor on-time performance and unreliable service provided by the nations airlines adversely affects the business environment and productivity. This has now compelled serious organisations to procure private jets. Guess whose
money was used to re-finance the unsustainable accumulated by Air Nigeria, Arik Air, Aero
contractors, et al to the tune of over N106B? The travelling and non-
travelling Nigerian public. And who suffered the most with the bankrupting of
Air Nigeria and the disruption of Arik's operations over the last few days? The
same unprotected travelling and non-travelling Nigerian public. So much for the
NCAA and consumer protection.
•
The
abhorrent working conditions and the short life expectancy of Nigeria's
airlines leaves aviation professionals frustrated and vulnerable. The constant
gaps in employment lead to erosion of skills and self-confidence. Such instability
places many professionals in a quandary not knowing whether to go for
retraining or to change careers altogether. Staff of Nigeria Airways, Bellview,
Air Nigeria and a host of other extinct airlines are still waiting for their
salaries and remuneration.
Considering these and other factors it would be
retrogressive and disastrous for the industry and the national economy as whole
if the idea of a national carrier funded by the government is revisited. For
example, starting a new National carrier require huge investments in the region
of $300 million. Some say, the private and public sector should jointly own it.
We know that the industry is capital intensive to start and sustain with margins between 3 to 5%. Nigeria’s average
rate of inflation in the last five years has been in the region of 10%. So hypothetically speaking, if the public invests $300 million in the new carrier and after a short
gestation period of three years starts making profits of 10%. When
corrected for inflation the net ROI is zero; showing the idea does not even
make business sense. The problem will expectedly, be further compounded by the
prebendal nature of Governments' involvement in business. Some affluent
kleptomaniacs amongst us will subsequently hijack the National carrier and
arm-twist the government into giving it unsustainable and unrealistic
privileges/concessions as in the case of the erstwhile Virgin Nigeria. The
amount of money required to start a new National carrier is nearly enough to render
all our current airlines debt-free. Of course it'll be preposterous for the
federal government albeit the taxpayer to continuously tolerate the misdemeanours of the current airlines. I’m not advocating for the federal
government to write off the debts of the airlines currently in operation.
Rather they should be restructured to run efficiently with sound business
models and financial discipline. This will give them a fighting chance of
surviving in this very competitive industry.
