Concession of airports to foreigners will encourage capital flight- Onyema, Air Peace boss

As Air Peace set to begin its international operations in November with Sharjah in UAE and then Dubai, Mr. Allen Onyema, the chairman of Nigeria’s leading airline, Air Peace has shown that something good can come out of the Nigerian aviation industry, that Nigerian airlines are not weak as being portrayed, that they can compete after all.
Recently, the chairman of Air Peace engaged Editors of major newspapers in Nigeria and aviation Correspondents afterwards on the airline’s international roadmap, the need for government active involvement in international Aero politics, airports infrastructure, concession, and other burning issues in the industry.
Franklin Ihejirika who was at the event outlined the talking points of the event.

Excerpts

First international destination

Towards the end of November we will start our international operations into Dubai and Sharjah. We will fly 5 times to Sharjah and two times to Dubai. The sharjah people are giving us red carpet reception so you go where you are wanted. You know UAE is running a true federal system , they are made up of about 8 Emirates and these Emirates they compete fiercely  among each other and they develop in accordance with their resources. Dubai is different, Abu Dhabi has oil so as you are moving into them you will see some differences among them. So they are very happy to have Air Peace in Sharjah  that is why we decided to go there. We don’t want to be out muscled by aero-politics. Already they have started telling us that we won’t last two weeks. Some airlines said they will do to us what they did to others, but with Air Peace, they have met their nemesis. If I have only one aircraft and I go there and they ram check me, but when I have 4 or 14 I will never send any aircraft there that is going to be managed. I don’t want to manage any aircraft. So everything must be top notch. So when you start stupid aero-politics the world will see that you are being funny. Just check out the west coast, no Nigerian airline has been consistent on the West coast, Air Peace has been consistent.  So we are taking it gradually, we don’t cancel our flights. Others might have one problem they cancel and for the next three days, if they fly today they won’t fly for the other  days.  These things don’t give us good image and mileage.  But in Air Peace we plan everything and make sure we have standby aircraft. We have increased our fight to Accra to three times daily, then we do Lagos-Accra-Banjul at night. Then we start another one form Abuja to Accra to Monrovia. Then we do direct flight from Lagos to Free Town every other day. And we have been steady and consistent  and that was why we won award that was given to us in Accra by West African regions. The same thing we are going to take to the international arena. Yesterday we carried eight passengers from Abuja to Accra and four from Accra to Lagos. At times they tell you that there are billions in the West Coast. It is when you are there you will see it. Some arm chair critics, the ones who told you that once you buy airplane it is money laundering, those are the kind of people Nigerians are listening to. Those are the kind of people that is shaping the policy in our aviation. If somebody can wake up and say buying an airplane amounts to money laundering. It shows that the person should have a bed space in Yaba or Aro.  These are people being referred to as aviation experts and it is the press that is creating this so called experts. And I don’t know why the aviation round table is still keeping such people there. So when you undertake business in aviation be ready to incur loses.  That is why I was surprised, I was asking one of my staff that does it mean that Nigeria doesn’t give tax holidays to new businesses?  And she said no, that even when you incur lose, you are supposed to pay a certain amount of money as tax whether you make money or not. That is a backward policy as far as I am concerned, it is retrogressive legislation. It does not help the economy. I said I have lost over a billion on that route but we are consistent because we planned for it. What we are trying to do is to develop the route. It is not as if everything is going on well. But we have been consistent, we didn’t shutdown or wait for the day we will get plenty passengers before we go like other airlines will do. Even on domestic route, the day they don’t have so many passengers they just cancel the flight. In Air Peace we don’t cancel flight, the only time we cancel is when there is poor airport infrastructure. Maybe we want to fly in and they said the airport has been closed, that is the only time. If it is weather problem we will wait. We have flown passengers in this country by 3:30 am.

Poor Airport infrastructure
Poor airport infrastructure does not help our present generation at all. An aircraft is not supposed to be on the ground, an aircraft is supposed to be flying in the air. Most airlines in Nigeria have their airplanes AOG. That is technically grounded, not because the planes are not good but because the airport infrastructure is poor, you cannot fly in the air beyond 6pm. So you ground your aircraft. If it rains in the morning and the weather is bad you delay your flight. When you delay your flight you are already going to have problems flying to those destinations. Because you might not catch up with the 6pm barrier. What do you do then?  You start flying to those destinations first, you start sacrificing Port Harcourt, Abuja, Lagos  and Kano. That is why at times you see Abuja, Port Harcourt flights going 10am or 12 because those are the only airlines you could fly at night.  These things are not helpful at all. We need government support to get it right. You see what is happening in Ghana, the kind of edifice they put out there as an airport. If they blind fold you and throw you into that airport you wake up and think you are in Heathrow terminal 5, but that is Ghana. Now every airline in the world wants to use that airport just to pass through Ghana using it as a hub. Gentlemen of the press let me tell you this, airlines don’t create hubs good airport attract hub.  But they lie to you that airlines create hubs, no it is good airports that attract hubs. If you have a good airport people will now want to transit there. Who will want to transit through any of the Nigerian airports? You cannot even  get any comfortable sit to sit. So these are the first things we think should be done. 

Concession of our airports
I also called for the concessioning of these airports to indigenous people of Nigeria not to outsiders because we have people who can afford them.  Air Peace has opened the eyes of the banks about what it could be in the aviation industry if it is properly run. These Nigerian bank and investors are now ready to invest in aviation because of what we have been doing. They want those airports concessioned to them.  They will run it  and the money will be kept within Nigeria and for the people of Nigeria. But if you concession our airports to foreigners there will be capital flight, maybe 80percent of the money goes out of the country and we remain impoverished. When we have indigenous people that can invest in these airports, lets do it.  I support federal government intentions to concession the airports and it should be done very urgently. This is the first thing to be done. If we want to grow this industry. The best airport today in the country remains Bi-Courtney’s airport MMA2. I don’t want people to lose their jobs. The people in the Federal Airports Authority of Nigeria, FAAN for now maybe scared of losing their jobs, I have a solution to that for the  government. There is no hard and fast rule on how to do things, it is very easy. Concession these airports whoever is coming to take these airports should be able to look at what the airport can absorb, the concessionaire should take over the qualified staff not just anybody. The government has no business running business. When government is running business that is when you have mediocrity all over the place. In Nigeria they ask where does he come from, so you keep on employing people who will be watching matches during work hours.  So when you concession airports, the concessionaire should be allowed to absorb those he wants to absorb.  This issue should be trashed before even the concession is signed. And the remaining staff should be absorbed by government ministries, so that people should not be afraid of losing jobs. This is the only way government can do it.  the only thing making the unions to agitate is because they are afraid of their jobs and I personally I don’t want anybody to lose their job. So concession these airports and sit down with those bidding to take over these airports, let us see the staff strength of these airports. let us see the infrastructure on ground. For staff issues, how many can you absorb, you look at the business case and you come up with the number you think you will be able to absorb out of the millions they have employed. Then the remaining ones government must commit to taking them to other ministries. For this industry to move forward. The airport infrastructure must be right, if it is not right then the local airlines or any other airline coming here is not being supported.  That is on the domestic scene.

International aero-politics
On the international scene, the aero-politics, I have told you if your country gives you the status of a flag carrier and you want to fly to London or to any destination, the other country they have an airline, they don’t want you to come and compete with their own airline, whether private airline or whatever.  Even the airlines there will try to prevent you and their country will indirectly stop you or suspend you  for a while until they able to fathom a way of dealing  with you when you come in. So they can stop you from coming in, they can raise issues that are none existent against you. It is then we need the support of the government to play that politics, to let them know that if you do not allow our flag carrier to come in we are going to stop you. There are ways of doing that, government to government and they will do it. quickly they will allow you to come in. we need that support. Then of course when you go to these places and they slam us with some unreasonable charges, draw the attention of those countries, it is our government that should do that. Draw the attention of those countries who are doing so that our people are paying this you are not paying this when you come here. If they refuse you multiply it by two and give their own airline. You will see they will stop, it is not within the control of any airline. They have so many stumbling block for you not to come into their country. They lay these blocks on your part, so government should come in and help us. That is what I mean by international aero-politics. Some time they might tell you that there is no slot, but there is slot in my own country. Even if it is ten minutes give me a slot. It happened before and when Nigerian government waded in the slot came out. So this is aero-politics, every country tries to protect their own businesses.

Partnership plan, interlining and code share

I forgot to tell you before about our plans to go international, a lot of people are saying we brought in our 777 and they have not started. It is not so. This is why the former airlines failed. First of all, I don’t want to be a one aircraft international operator, when the aircraft goes down you start disappointing people. That is why we went for four state of the art 777s to use. Again Air Peace does not want to do point to point international flight operations. Maybe you are going to Dubai we drop you there and it ends there. You are going to Amsterdam  and it ends there, that is not what we want to do. That is why we said Air peace is trying to make this country very proud.  As I talk with you very formidable airline which I wont name now, has signed up with Air Peace. They are integrating their system with Air Peace as I speak to you.  So that when Air Peace drops you at the destination, they will pick you. It is an airline out of the Middle East in one of the gulf states. So when we drop you say in Dubai or in Shajah another airline picks you there. Assuming you are going to Malaysia, they are going to about 36 cities in India. So now people will buy Air Peace ticket when you are going to Malaysia, India, Indonesia and others.  If you are going there you just buy Air Peace ticket, check in your luggage and you will get your luggage in Singapore. So they are already integrating the two systems, Air Peace and their own.  The same thing is happening in other destinations we are going, everywhere we are trying to go even in America , we are trying to align with other airlines. Don’t forget that we are IOSA certified. We are members of IATA too.  And not just certified, we retained our IOSA certification, some airlines didn’t. So the world know that this airline is very serious and they are ready to corporate with us.  So we need all the support to make Nigerians proud. So this partnership is there and not just Air Peace flying there. This is why we are taking our time to do it so that when we hit the ground running from November this year, this country will celebrate.

Government support to airlines

Let me clarify this, yes I said that we need support, I listed support in improvement in infrastructure, aero-politics, and other things and I said we don’t need money, that the money should come from the banks. If anybody wants to borrow money, meet your bank and let your bank give you money. It is not because in other climes government do not dole out bailout, in America they doled out money to support the airlines especially after the 9/11. In Nigeria I learnt that some time ago the government doled out money to these airlines , 120 billion. Some of these airlines when I met their owners, they said what we are seeing, it wasn’t really like that. And they couldn’t talk , I don’t know why they couldn’t talk. So many of them were being accused of having diverted those funds to real estate and other things. So I don’t know if these monies have been repaid. It will be unpatriotic of Air Peace to call for another bailout with tax payers hard earned funds when the industry has not given account of what it has done with the one given to them before. So if you know you have integrity, give your business plan to your bank. Until when we all prove that we are men of integrity in the industry then we can call on government to also give us funds when we need them to give us funds. But remember whatever fund government is giving shall be repaid one way or the other. So whether they take it from the bank or the government it is still going to pass through the banking system.  So the most important is for my fellow owners of airlines understanding that bank money is not just somebody’s money. Bank money is everybody’s money that should be taken care of. When you take money for business please plough it for that purpose for which it was meant for. If you want to borrow and your business is for 10 million borrow 10 million. Don’t go asking for 100 million. Then you over burden your business with 100 million debt that you cannot service.

Presidential committee on harmonisation of charges

I am a member of that committee, what even brought out the setting up of the taskforce was the airline were crying to the Vice President then, Professor Yemi Osinbajo, he was the Acting President then. We wrote to him and he invited us wanting to hear from us. So he saw reason for things to change and he mandated the Minister of State Aviation, Senator Hadi Sirika to inaugurate a presidential taskforce. We met a couple of times and the place was also populated with civil servants. When you are talking about air, they are talking about sea. We weren’t on the same page most times, which it shouldn’t be. What the Vice President wanted was a situation where people should sit down and articulate issues and really look at issues.  We are one nation we are all fighting for the economic wellbeing of this nation both the government and the governed. And we came up with our own position as AON, they come up with their own, up till now the report I am sure has not being submitted. We don’t know why. Some meetings were called some times when the other members especially us, you may be in different parts of the world doing business and if you are given one day notice how could you answer  that kind of thing. So it is still there it has not been submitted yet to the best of my knowledge. But I am sure it will be submitted soon.

Payment of VAT
On VAT, yes we are still paying VAT.  Because when you go to them , when we say we wont pay VAT, FIRS will come to us and say that it is not yet gazetted. Meanwhile, Mr President in his magnanimity has asked that airlines should stop paying VAT.  He wants to improve the economy but they still come to us for VAT.  And when we remind them that Mr President has waived this as a presidential order they said it was not gazetted, so I don’t know what else we are going to do.

Financial institutions partnering with Air Peace

First of all you have non-disclosure agreement, you don’t go announcing things and announcing names until they are done. How can I come up here and start naming the international institutions? If you come privately I might show but you are not permitted to publish it. because if you do they will sue you. Because if you do those people will withdraw and I will come after your organisation. When I say Nigerian banks want to come in of course they want to come in. we held meetings with them, they are going to participate in the Boeing  deal, it is just that Fidelity Bank being the lead Bank, the owner of Air Peace, they feel they own Air Peace. They are fighting too to make sure their business is not taken away to other people. So they finance the initial payment while the others are queuing in. UBA is coming if you want to know, First Bank is coming, they listed their conditions. They want to be on our collection platform. All ready we have started integration with UBA , they want to be on the collection platform of Air Peace.  So when they release their funds we will be getting it directly without any stress. And other banks are praying to even be allowed to come in. but the international ones we can’t name. All of them had meeting with Boeing and us together that is the truth.

Number of Air Peace aircraft
On the number of planes in our fleet, Air Peace today has acquired 27 planes plus our 10 to come. The other two 777s are not here, we have brought two into the country.  When you are given international destinations, it is no longer the way it is used to be done before. When they give you international destination, you now apply to the other countries. In fact China, they will ask you what kind of aircraft you want to use, 777 or 747. These days you must present your aircraft with its tail number not just any aircraft. They will see your agreements, they will see everything that you own the aircraft or you leased it. seat payments and everything will be seen, they will see the number that it is attached to your application. It is not as it used to happen before. So some of those experts they are not current about what is happen. It is very annoying and painful that each time you talk they will say when I was in Nigeria airways. And this has been the problem of aviation in the country. These are people that have failed to update themselves to modern times and they call themselves aviation experts. They know next to nothing, I challenge any of them to come and let us have a debate.