Players in Nigeria’s aviation industry have been evaluating approach to the regulation of airline business in the country considering the record of high mortality rate over the years.
The former Executive Director of defunct Virgin Nigeria and Director General, Nigerian Institute of Directors (IoDs), Mr. Victor A. Banjo says the subservience of the regulatory agencies, including the Nigerian Civil Aviation Authority (NCAA) to their political masters, has contributed to lapses in industry’s regulation over the years.
The Chief Executive Officer of Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru says “the regulations are either weak and lack the courage to enforce compliance based on current standards, or need more fine-tuning to ensure effectiveness of the airline. The aviation industry is as important as the health industry because it deals with lives of travelers. It requires more regulation than even the banking industry. It is only in Nigeria that an airline can abandon you at the airport for more than five hours without any recourse. Indeed, there are consequences for frequent cancellations. However, I cannot recall any airline punished in the recent past.”
The Chief Executive Officer of Overland Airways, Capt. Edward Boyo wants the regulator to give more attention to training and implement training-related regulations to ensure sustained personnel competence in the industry.
The Chief Executive Officer of GDL, Mr. Kolawole Ayeye wants the NCAA to adopt for airlines, the recapitalization approach, employed in the nation’s banking sector that reduced the number of existing banks from 89 weak banks to 25 solid banks.
“The NCAA should use regulation to create environment where only those who are likely to win exist as players. This will reduce mortality rate,” he said.
The Chief Executive Officer of TopBrass Aviation, Mr. Roland Iyayi noted that the 5% Ticket Sales Charge (TSC) paid to NCAA by airlines when the nation’s total passenger record was 5 million had been maintained even with increase to 15 million passengers. He advised the NCAA to review the multiplicity of taxes paid by airlines to Federal Airports Authority of Nigeria (FAAN) and Nigerian Airspace Management Agency (NAMA) and other agencies to enable their survival.
The Chief Executive Officer of Springfountain, Mr. Tunde Fagbemi says the NCAA had given more attention to technical competence and technical regulation some years ago when the nation’s air safety record was poor but that “it is time to focus also on economic regulation. The operators themselves should equally be ethical enough to do the right thing.”
“The NCAA has authority for economic regulation but checklist mentality is the problem. They just look at books alone. Economic regulation has become very important because if your fundamental economics as an airline are wrong, there is no way your processes will be okay,” says Mr. Fubara Anga, an airline consultant and Partner, Aelex.
“I want to use this opportunity to appeal to the NCAA and other regulatory agencies in the aviation industry to show courage and ensure that sound corporate governance systems is enforced,” says Mr. Kuru.
NCAA’s Director of Air Transport Regulations, Capt. Edem Iyo-Eta says the regulator is revisiting regulations and is emphasizing on financial health audit of airlines.
“We are developing a template. This time, you will not just propose a business plan. You will be asked to come and defend the plans before you proceed,’ he says.