FG Should Encourage Investment In Aviation — Capt Meggison | Independent Newspapers Limited
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FG Should Encourage Investment In Aviation — Capt Meggison

Posted: Jun 8, 2015 at 12:00 am   /   by   /   comments (0)

The Chairman of the Airline Operators of Nigeria (AON), Capt Nogie Meggison, in this interview with aviation correspondents at the Murtala Muhammed Airport(MMA), Lagos, called on the Federal Government to encourage local entrepreneurs to invest in the aviation industry and that the idea of setting up a national carrier is archaic instead, there should be a flag carrier. Correspondent Abel Orukpe was there. Excerpts



There have been several suggestions on the shape the proposed national carrier should take. As a major stakeholder, what is your take on this?

The Federal Government should make policies that will encourage the local entrepreneurs to invest in aviation. By the time you get your policies right, the foreign investors will bring in the money and invest. It is just like what is happening in the Nigerian Stock Exchange (NSE), the government doesn’t need to pump money into it before the Naira appreciates. Just set up a level playing ground like where you put a policy for election where the winner wins and it is clear and no one is fighting. The whole world is praising Nigeria today because of the success of the 2015 elections. People are coming in and bringing in money. Guarantee Trust Bank (GTB’s) shares jumped from 21 to 31 on the stock exchange and they got back in three days what they lost in six weeks. If the policy is in place the money will come. The passengers are there, Nigeria has the highest population of travelers in Africa. Gone are the days where government set up an airline. That is an old model. Another reason for a national airline is if your policy is to drag in tourism and you don’t have local route that is the only way to bring in the foreigners as tourism into your country. We are talking of Dubai and Etihad. Dubai is Dubai, they do not have internal flight so the only way they can get people to come in to the country is by setting up a national carrier. Your policies and agenda must be clear before you fly a national carrier. Even in Dubai, they are all flag carrier like Fly Dubai, Emirates and Etihad. But when you have countries with fragile economy, countries like Rwanda, South Sudan, Gabon and Ivory Coast that is where you get National carriers. Nigeria has gone past that stage. We cannot be equating our economy with that of those countries.

Should government be involved in the establishment of new national carrier?

The idea is archaic. Rather, we should have a flag carrier. Government should just make it competitive so people can bid for it just like government did to Power Holding Company of Nigeria (PHCN). Just say there is a route from Lagos to London or to Malaysia who wants to come and do it? Government should just be getting 10 per cent like it did in PHCN. Come and bid for it, just show me your competencies and your technical capabilities or your Joint Venture (JV) and we will give it to you. This is the benchmark, come with a JV partner. And because the foreigners know Nigeria is a fertile ground, they will look for a local partner to form a JV partnership with. Just like British Airways did in South Africa. There is a British airline flying in South Africa called Comair because, as British Airways, when you want to go into South Africa to distribute passengers, you get to Johannesburg you are stopped and cannot go anywhere. So, they said they will do partnership with a South African handling company called Bidvest. They joined with the handling company and they formed an airline called British Airways Comair. If you want to join with the Nigerian Aviation Handling Company (NAHCo) go ahead or First Nation, Dana, or any other local airline and form something; an alliance. But when you leave your border porous and you hand it over to them (foreigners), how does that create jobs and employment for your youth and how does that contribute to our Gross Domestic Product (GDP)? Today we are talking of $10billion aviation capital flight in Africa and apart from Nigeria being responsible for over 50 per cent of that money, we can reverse the trend by not only taking our own but taking  that of other African countries to join ours because we are the big brother and we have a strategic location. When an airline is flying from Mozambique and flying to Europe they will fly over Nigeria same thing with those flying from South Africa. When your natural point is at the centre you can go north, why would you want to spend two hours going down South and then spend another two hours to pass the same place? That is four hours you have lost. When we create the enabling environment, the business people will come and form partnership with Nigerian companies and take us to where we want to be as an industry.

What should the Federal Government do to encourage foreign investors to invest in maintenance facilities in the country?

Like I said earlier, the robust policy the government needs to put in place is not just a policy that will put airplanes on the ground. Gone are those days when you put aircraft on the ground, fly them and start to look for maintenance and skills. That is archaic. The reverse is the case nowadays. The first thing you set up is a maintenance organisation. Even the car companies are currently doing that. For example, JAC from China set up a maintenance centre in Nigeria before they start bringing in their vehicles. When you set up a maintenance centre you start to develop skilled labour and with that you start creating employment. After that you can start to lease airplanes out as a government to Nigerians. It is when that fails that you can think about setting up a national carrier. But if you do that today and you buy 12 to 50 airplanes, where are you going to maintain them? We all know that during the days of Nigerian Airways Limited (NAL) there were airplanes that only flew for six or nine months and could not fly again when they develop simple maintenance problems.  It is just like when you bring in a new car that we are not used to in Nigeria and you want to drive it here and you just drive it for only six months and it develops just a fuse problem and because the man that want to change the fuse doesn’t even know how to do that then he enters into the carburetor and from there he enters the injector and at the end of the day you won’t have something that is airworthy. We need robust policies. For example, Maintain Repair and Overhaul (MRO) facility is compulsory, training is compulsory and you must also look at the issue of double taxation. The local carriers pay Value Added Tax (VAT) but the international carriers don’t. And this mean that when a local carrier is travelling to London, he charges five per cent extra to pay VAT but an international airline flying the same route doesn’t pay VAT in his country and doesn’t pay it in Nigeria. VAT does not apply to transportation anywhere in the world and it is only in Nigeria aviation that it applies. Rail doesn’t have VAT and road doesn’t so why have it in the aviation industry? Other things we need to look into is insurance, signing of Bilateral Air Services Agreement (BASA) by those who actually know what they are doing, window for foreign exchange and we must also look at the fuel system. If we look at these strategic things, aviation will definitely come up in the next four years.