AMCON In Aviation Industry Is a Misplacement Of Judgement

The president of Aviation Round Table, Dr Gabriel Olowo, speaks on the ups and down in aviation industry in the past seven years, scoring the Buhari’s administration 40 per cent in the sector. Even while, condemning the involvement of Asset Management Corporation of Nigeria (AMCON) in the sector, even as he called on next administration to settle foreign airlines debts.

What is your take on the coming of Asset Management Company of Nigeria (AMCON) in the aviation industry?

For me from day one, it was a misplaced judgment to put AMCON as a turnaround manager of an airline. AMCON was set up to collect debts of banks. If you are to collect debts, how can you turn the business around? If you have to collect debts in the US that is Chapter 11 of Bankruptcy, I don’t know whether we have that in Nigeria, but if you are declared bankrupt, that means debt is set aside. Bankruptcy does not mean you are dead. It means you set the debts aside. You are to pump in fresh funds and resuscitate the business. When the business comes back alive after some years, you can now begin to service these debts. That is what they call turnaround, but to ask AMCON to come and turnaround and at the same time to pay the airline debts, that is the consequence that you are seeing.

They have not been able to deliver the airline of your dream, neither have they been able to sufficiently pay the banks’ debts. I flew on one of the airlines under AMCON receivership one day en route to Ghana, but I won’t mention the name of the airline. Onboard, I was able to meet a senior official of AMCON and I asked if that was the standard they came here to deliver because I saw wires that can short-circuit and could cause fire breakout inside aircraft. That is safety measure and somebody is doing oversight on that airline.

But, because it is a government affair, somebody turned away his eyes. As it is, we cannot afford to compromise safety. There is no straight cut assignment; ‘I must keep the operations going and I must collect debts.’ This is not possible and we are all seeing the consequence. They proposed a few years ago to merge Aero and Arik Air as one flag carrier for Nigeria, but government officials started disagreeing with one and other. That means we are not cohesive in policy.

What do you want to do with these two airlines? Set them bankrupt, get all the assets and let it float a strong airline for you and then, you will know you are making some progress. That progress will service the debts. That is the way out. Otherwise, if they continue with the way they are doing, they will end up killing the airlines and will have nothing out of them.

I read that they met about 17 aircraft at Arik Air when they came onboard, but now, they have less than five. Is that a progress?

Then, go and check the on-time departure of that airline. If an airline is doing 70 per cent delays, is that an airline? And our number airline in Nigeria today, Ibom Air is still above 50 per cent delays. So, none of them can say in terms of on-time performance, is good. So, we are not operating an airline business. A flight is supposed to depart at noon and it’s departing at 10pm, what does that suggest? Operational reasons? No, it is simply inadequate service; they don’t have enough fleets or the fleets are frequently breaking down. When they breakdown, you cannot operate a flight that is not safe. So, you will continue to delay departure. How can you delay a flight for five hours? Maximum delay you can have should not be more than two hours.

So, for me, AMCON coming into that sector is absolutely misplacement of judgment. We didn’t get it right. Shut the airline down, collect your money and you know the airline has become a history. But to ask them to run and at the same time collect money, it is an effort in futility.

AMCON and NG Eagle have been in the news for some time now. What do you think they are up to?

The question we should ask ourselves is who owns Nigeria Eagle, AMCON? If I own a property, I should be able to sell it. The NG Eagle, Arik Air and Aero that government has taken over, they took them over legally. So, the Nigeria Civil Aviation Authority (NCAA) has done the right thing. I don’t know the name of the fellow who bought it. So, for me, it is correct. NCAA has done nothing wrong.

The present administration is winding down. What is your assessment of federal government in aviation in eight years?

I don’t like talking about people, I like talking about institutions. What has aviation lacked in the last eight years? You know people running the sector, I have seen close to 20 aviation ministers in my aviation career. In the last eight years, the agenda set were very clear. What we did at Aviation Round Table (ART), is that we tried to measure their performance with indices of our breakfast meetings. We took topics on each of the six roadmaps, but we focused on about four of them. For instance, we did some things on the national carrier; we recommended options to national carrier.

We focused on airport concession, hub creation and how to finance airport. We focused on maintenance facilities, training and manpower development, corporate governance. We shouted on the appointment of Board members for agencies, which is at the prerogative of the Minister according to the Acts setting up the agencies.

By the time we appraised all the indices, we tried to tick any of our voices that were hearkened to, but regrettably, those voices went down into the drains. All the efforts of eight years, I think we scored the government about 40 per cent performance. We expected government to have done at least 60 per cent and leave the rest to politics. To us at ART, following our indices, we scored the administration below par. We didn’t see the national carrier. We started acquiring non-profitable airports from State governments and some State governments still want to develop their own. And we said no. How about the existing ones that are unprofitable? The Murtala Muhammed Airport (MMA), Lagos that is supposed to be our number one airport has been neglected. The one added by the Chinese, recently, some foreign airlines rejected it. How can we deliver a facility that operators don’t want? So, who is delivering facilities for whom? No airline growth, no airport growth because I didn’t see a hub developed.

Maintenance hangar of Aero Contractors, I don’t know how much savings we have been able to achieve from taking our aeroplanes there. NCAA should be able to tell us for instance that within a certain period, maintenance figure came down to a certain amount of money because of the facilities of Aero.

Foreign airlines non-remittance has reached all figures high of $718m. We are 44 per cent of the entire world’s debts on non-remittance of funds to foreign airlines as at the end of March, 2023. So, Nigeria is almost the half of the world.