Walking The Autonomy Path

After enforcing airline recapitalisation, the introduction of e-ticket and consequent phasing out of paper ticketing by May 2008 became the next challenge, as required by the International Air Transport Association, IATA. A local IATA office has thus been opened to ensure that operators meet with the deadline. The NCAA autonomy has also paved the way for replacement of old aircraft. The agency, riding on the back of the Cape Town Convention, is liasing with aircraft leasors and banks to facilitate purchase of new aeroplanes by airlines operating in Nigeria. Through the autonomy secured by NCAA, the political risk of doing business in Nigeria has shrunk. The new national law that has emerged, meet all the conditionality required by the international Finance and leasing institutions.

The Minister of State, Air Transport, Mr. Felix Hassan Hyat on 28 April, 2008, underlined Federal Government’s Commitment towards sanitising and improving the aviation sector. He emphasised the resolve of government to maintain the path of reform at a three-day international Civil Aviation Organisation, ICAO symposium conducted by the NCAA in Abuja. Already, the gains of the cumulative efforts are becoming visible as Nigerian operators can currently boast of over 100 aircrafts which are not more than 10 years old. After the signing of the Autonomy Bill in 2006, measures were put in place to ensure the agency has a free hand in the handling of its activities. But while the burden of regulation rests squarely on the shoulders of NCAA, the aviation watchdog, the critical hurdle of under-funding is yet to be crossed. Also, still standing, is the problem of ensuring that funds dedicated to the sector are put to appropriate use to guarantee safety, security and efficiency. As the aviation business is Capital Intensive, over the years there has been agitation in the Industry for Increased government funding for the sector. To this effect, and after fervent legislative appeals by the Senate Committee in charge of 2007, a budget of N21.7 billion was approved for the sector that year, a representation of over 300 percent increase when compared to the N5 billion of 2006.

Furthermore, stakeholders hold a unanimous opinion that improved collaboration and consultations with aviation agencies in the articulation of bills should go a long way in improving the performance of the National Assembly Aviation Committees. Mr. Sule Bates, the Chief Executive Officer of Nigeria Aviation Handling Company, NAHCO, holds the view that the committees cannot function properly except with the input of the Chief Executive Officers, CEOs of parastatals. He prescribes to this effects, a regular exchange of ideas between the committees and other stakeholders in the industry.

In the same vein, Minister of State, Air Transport, Felix Hyat asserts that the National Assembly still has a very key role to play concerning the autonomy bill which is not exactly perfect. “We have al realised that some of the provisions of the Act are lacking regarding the sharing of grants” he comments. This is due to the fact that the financial requirements of aviation parastatals like Federal Airports Authority of Nigeria, FAAN, that of Nigerian Airspace Management Agency, NAMA, Nigerian Institute of Meteorology, NIMET, and that of the NCAA, have never been justifiably worked out. The parastatals may need varying percentages of revenue from year to year, whereas currently, the grants are tied down to certain percentages. The Director-General, Nigerian Civil Authority, Dr. Harold Demuren points out regarding the loopholes in the autonomy bill and how the agency had fared in the post-autonomy era that there has been a transitional period particularly in the case of economic regulation. He expressed optimism that the agency is in accord with the Aviation Ministry and should be granted the privilege of “taking over finally and then starting to operate as an autonomous body in safety and economic regulation.” In a recent development, the Senate Committee on Aviation took crucial decisions on some vital issues regarding the aviation industry. In particular, the senator appear strong in their resolve for the Account General of the Federation to transfer Nigeria’s Bilateral Air Services Agreement, BASA Funds to the Nigerian Civil Aviation Authority. The use to which the funds have been put in the past have always generated controversy among aviation stakeholders. It has always been argued that such funds have been misappropriated, to solve the problem of other sectors while the safety-critical aviation industry makes do with scanty funding.

Also, the need to accelerate legislative measures to ensure fairness to local airlines as being pursued by the NCAA in the allocation of frequencies is yet to be met. This is in terms of royalty versus capital flight as the royalty earned by government from the meagre available frequencies pales in comparison with the blow being dealt the national economy through capital flight. This magazine gathered for instance that royalty earned from European and foreign carriers between years 200 to 2005 totalled 89 million US dollars while remittance by foreign carriers amounted to 1.2 billion dollars between the same period. Pundits opined that a stronger legislative backing that will support attempts by the NCAA to reverse such trends will not be out of place.