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T H I S D AY • MONDAY, JANUARY 9, 2017
BUSINESSWORLD
INTERVIEW
ARUMEMI-IKHIDE: NIGERIAN AIRLINES RECORDED HUGE LOSSES TO AVIATION FUEL, FX SCARCITY IN 2016 you want to leave it then give the airport control, give everything to the local airlines; yes they need to do that. If you say you want to hands off aviation then don’t say you are concessioning the airport because you can’t concession and give the airports to others, while the real work is being done by the airlines. So you can’t just come and say you concession to this and this and then you now say we pay this and that. So they should allow the body of airlines to run aviation and then take care of the airports, maintain them and control them. We would have made better progress some time ago, when we applied to the government to give us a piece of land at Murtala Muhammed Airport, Lagos to build our own terminal, that request was turned downed. We wanted to build our own terminal. We wanted to build a hanger in Lagos it was again turned down. Can‘t see any progress has been made within the last three years on that.
to having our brother Medview go through the system and then be able to fly Nigeria registered aircraft to London and to US and to Jeddah. We are looking forward in cooperating with them and they are very decent people, they are not people who engage in negative publicity and de-marketing like one of the local airlines. How has inadequate supply of foreign exchange affected your operations? In aviation 80 per cent of the input is in dollars because we don’t manufacture the spare parts here. And even all the charges like over flight charges I am sure Medview and ourselves have been had hit on this because we had to pay Europe control in foreign exchange and it is not in CBN rules. We found that the regulations of the CBN do not take into cognisance payments for international aviation. If you talk about over flight charges, you put in your paper to the bank they say sorry it is not part of the CBN rule. If you talk about even simulator training, you should know that, yes we fly internationally but most Nigerians like to pay in naira. Even London-Lagos now for this season you will find that many Nigerians pay in naira here. And we as Nigerian airline we cannot refuse our countrymen from paying in their local currency. That is the only way we can strengthen the naira because the more you go down to foreign airlines and pay then they will demand from CBN to take this money out, then you are encouraging capital flight. And we felt that this is the reason why the CBN should give Medview and us special concession, and give us the opportunity to buy forex. At least we have saved the country a lot of money that would have gone out as capital flight. They should also give other airlines too to meet their spare parts requirements. I am aware that one airline is in the habit of using such funds meant for airlines for its other sister company business and that I am sure the CBN and the authorities can check. We need to be very honest with ourselves, we need to be straightforward, the money belongs to all of us Nigerians. The more capital flight we can save or prevent, the better. But then a few people are abusing it and they should not be allowed. Somebody cannot have one or two aircraft and be requesting something in the neighbourhood of $26 million. It doesn’t make sense. I think there is need for the CBN to work with the airlines and put some regulations down to check round tripping and abuse in the system. Yes, there is scarcity of foreign exchange but what is there is that we should be able to use it prudently and use it justifiably not somebody having two or three aircraft and asking for stated sum and yet people who have six aircraft are asking for $5 million and they can’t get it. Whatever savings we can make as Nigerians, we need to save and save our country. The country belongs to us we have no other country than Nigeria and we shouldn’t be wasteful. We need to be prudent and I appeal to the CBN to call for a meeting, let us discuss it, let us put a mechanism in place that will ensure that only the needed foreign exchange is made available for the local airlines. Recently Lloyd’s of London threatened to stop insuring Nigerian airlines because of their failure to pay their premium. How will this affect airline operation in the country? Yes, I agree with Lloyds of London. Let us take this thing in two parts. Aviation is an international business even if you are flying Lagos to Abuja, you are going to meet people from other part of the world flying. And of course if you are flying to London or New York or any other place, you have it as an international business. So insurance especially aviation is done in dollars and I think these are one of the reasons I believe CBN should meet with the airlines, let us sit down, form a committee and we can put some regulations down that will be easier to pay for. This is because when you are making your claims it is in dollars. For example, if your aircraft is damaged you are going to pay in dollars because when you get to the place to repair it; you pay for the service in dollars. If there is compensation, God forbid if
Arumemi-Ikhide anything happens, it is going to be in dollars. So, I think there is need for us to understand that the currency in aviation is in dollars. Like I said earlier on Medview and ourselves, we are taking naira from Nigerians who buy tickets, yes, we can spend the naira here, pay salaries and other things but we still need some dollars to pay for spare parts, services and other requirements. However, let me say quickly that this shortage of forex is not peculiar to Nigeria. Our experience is that the same thing is happening to us in Angola and Arik has some funds trapped in Angola since February 2016 and we have not been able to get it out. We have made a lot of effort to the Angola Ministry of Foreign Affairs to assist us. We have written to IATA and the Angolan government is insisting that they have a serious problem of foreign exchange; that we should bear with them. So let’s not heap all the problems at the door step of the Nigerian government. We even have some West African countries that used to be flexible, they are now tightening up,some of our funds are tied up in some countries. But what I still appeal to the Central Bank of Nigeria is to assist us to pay the over flight charges because this is very important both for Europe control, the Caribbean and some other parts. Let me humour you a bit, but it is a fact. In Angola we wanted to have our funds trapped there, which is in their local currency and we wanted to pay for the over flight charges to go to South Africa with their local currency too and the Angolan government refused; they said we should pay them in dollars. Whereas they have our own money trapped there and we told them that you are refusing your own local currency and you are saying I should get you dollars when I have a lot of the Angolan currency trapped in your country and I can’t get it out, where am I going to get the dollars.
control, a lot of people have records of Arik, a lot of financial bodies have records about Arik, so they watch us and they know what we are doing. So when people write whatever they want to write we don’t bother ourselves. But let me comment on something. A week ago I was watching a programme on AIT by Rev. Father George and he was talking about people spreading false information. That was even before this rumour came out. He said that people like bad news. Once they hear any bad news they go straight to the social media and spread false information that in itself is bad and it is destructive to the society. You don’t check, you didn’t confirm whether what you have is correct or not you start passing it round. Any time you now get good news and you have something that is serious nobody is going to believe it. So what I am saying is that I never knew that EASA would release their certification about Arik, this gentlemen went out and spread false information about us. And I was wondering why a highly respected person would get a text and start circulating it without checking. There are some people I have respect for, but when I see what they do my opinion about them changes. This is because if you cannot reason, cross-check their facts before spreading false information then their dignity is questionable and their sense of reasoning is also questionable. This is because the issue we are discussing about is that Arik has over 600 pilots, if one pilot who was disciplined decided to write against is because he knows the psyche of the public, he plays on their intelligence and then you now decided to take and spread it. I read in the papers the other day that an Arik staff had an accident, if the person is working in Arik he should have a name but all the newspaper headline said that Arik staff had accident. So it looks as if all the public want is negative news about Arik.
Is it possible that because of lack of forex some airlines may have aircraft that are due for maintenance but they may not take them out for checks? I can’t speak for other airlines. Let me speak for Arik. Now we have scheduled maintenance and whenever they are scheduled we carry out the maintenance, we cannot because of forex refuse to carry out this scheduled maintenance. Like I told you, we have IOSA, we have EASA and FAA certification, so we breathe safety like air in Arik. Mind you, we are being monitored by European aeronautical
Have you spoken to the government about the charges levied on domestic carriers by agencies? In think all domestic carriers have spoken with one voice. My brother in Medview the other day spoke extensively about it, the Chairman of Air Peace spoke about it and we have always talked about it. And as far as I am concerned, it doesn’t make sense. There are multiple charges, they are expensive and they are not actually necessary. The government itself has to contribute something to air travel in Nigeria. If you say
How are Nigerian airlines going to come out of this recession? Well, I think everybody has its own strategy and the only way to come out of it is if the airlines, I mean the functioning airlines come together and talk. They mustn’t merge but I think it is lack of cooperation; lack of discussing strategies to tackle the problem is what is worrying us. I think confronting it alone will not help. We need the cooperation of Air Peace and Medview and Dana to work together and form a body to strategise. One person cannot strategise, so we need to strategise and look at it and actually get it done. If we don’t do that then I think we are not going to get anything done and that is the truth. The system is taking advantage of lack of corporation among us and again we should not allow armchair critics and armchair operators to meddle into what is not their business. A few of them told me they have been in aviation for 50 years, all their life. I respect them, they have been there but they are not operating now and the challenges of that time and now are completely different. So as far as I am concerned there is need for us to make moves to talk to one another, interact with one another, that is the only way. Even though we make one flight a day to UK, I know that in UK there is this body that talks about the airlines, some of them make about 20 flights a day, some three flight and some one flight, so we have three categories but at the end of the day we still talk. Even in the repair of runway at Heathrow, we had an input and to be fair to them in UK they are quite reasonable. People fear that the cancellation of flights, flight delays during the last festive season will affect the patronage of Arik as many people were disappointed with the airline. We really apologise for those infractions. We apologise to our customers. I want them to understand that every airline wants to operate and generate revenue. No airline will pay huge sums of money and acquire aircraft and want to leave it on the ground. Aircraft is making money when it is in the air. The truth is that we have a deficient system and no matter how you make your plans, if any part of the process chain is deficient it will affect your operation. We did not get enough aviation fuel to operate our flights. Our fuel demand is about a total of what all the other domestic airlines need to operate all their flights. We promise that if the fuel supply is normalized today we wont have such disruptions. I also want our passengers to know that stopping an airline from operating because you did not get your bag or your own flight was cancelled cannot solve the problem; it will compound it. For example, your bag did not arrive with you from London, another flight wanted to go to London to go and bring the bags, you refused that they should go. You have stopped the airline from going to get the bags and you have complicated issues for that airline. This will delay the airline from getting your bags. While we apologise to the airlines, we also plan to open a channel of communication to ensure that our passengers get the right information.