…want airline to adopt good business models
Posted by Sade Williams
Experts from various fields on Tuesday, chided Federal government agencies in the aviation sector for stifling domestic airlines’ operations with harsh policies rather than create enabling environment for them to thrive.
The experts spoke on the theme ‘Corporate Governance and airline industry development in Nigeria’ at the 3rd edition of Nigeria Travels Mart (NTM) colloquium held at Eko Hotel, Lagos.
One of the panelists, who dissected issues at the event, Kolawale Ayeye, Chief executive officer, GDL, a seasoned financial expert, noted that even-though the airlines need to look at consolidation in order to remain in business, government, through its agencies, have succeeded in making things difficult for airlines by concentrating more on the revenue they generate against providing good and seamless operating environment.
According to him, ‘something is systematically wrong, the operators need to get the government to do the right thing, the Nigerian environment is caustic for to operate, that is why we have not been able to produce a world-class airline, government should use regulations to create enabling environment that will attract the players, the airlines need help, it is not good for the agencies to be fat and the airlines which, pay the revenues to be shrinking however , consolidation is key’.
The ex-banker explained that the government, through the Central Bank of Nigeria (CBN), created the enabling environment for financial institutions before it introduced consolidation into the sector some years ago, adding the with harsh environment, the airlines will not survive.
“At that time, there were 89 struggling banks, the chairmen and CEOs kept deceiving themselves but in that industry today, we now have at least five strong banks whose balance sheet are clean and healthy but the CBN created the environment for consolidation to thrive, it is unfortunate that over the years, we cannot produce an airline that can rival Ethiopian airline and that is due to a dysfunctional system”, he said.
Also speaking, Roland Iyayi, former managing director Nigerian Airspace Management Agency (NAMA) and Chief Executive officer, Topbrass Aviation, said the airlines are being killed ab-initio with harsh policies adding that all the agencies levy them for sundry services that are not obtainable anywhere in the world.
“Airlines are overly exposed to multiple charges, they have created policies that negate the growth of the airline sub-sector and until this is addressed, they can’t grow”, he said.
Lawrence Fubara Anga, Partner, Aelex, lamented that sometimes government would make some good policies but some of its agents and agencies would refuse to implement, adding that the essence of policy is defeated.
Earlier, Convener of the Colloquium, Simon Tumba stated that corporate governance was weak among Organisations in the country but the airline industry was far worse.
He stated that it was a contributory factor to the myriads of failures over the years
“Generally corporate governance in most private enterprise in Nigeria is weak, but the airline industry in Nigeria is worse. We believe it is a major contributory factor to the dwindling fortunes of the industry or its stunted growth, or lack of it. ”
“We have observed how some strong airlines have almost vanished due to lack of financial discipline. How do you describe a director of an airline, who will take $10,000 for a weekend spree? , he asked.
While many of the speakers lambasted the airlines for lacking corporate governance, Grp. Capt.Ojikutu (retd), noted that the problem of the aviation sector is not chiefly with the airlines but with the regulator that has not been able to live up to expectation.
“Corporate governance is more entrenched in part 18 of the annex but the Nigerian Civil Aviation Authority is not applying it”.