For the aviation sector to generate more income, the government must address a number of challenges to maximise the sector's full potential. Such challenges include compliance with the International Civil Aviation Organisation global standards, the difficulties experienced by aviation stakeholders wanting to access funds or ensure financing for the modernisation and expansion of their infrastructure, the slow implementation of the Yamoussoukro Decision and Nigeria's requisite skill shortages.
For the Nigerian aviation industry 2018 began on a relatively high note. In 2017 the sector experienced a number of milestones which should serve as leverage for building success as the country becomes an air travel hub in West Africa. These developments include the country's increased ranking in the Level 3 State Safety Programme Implementation Process, the International Civil Aviation Organisation certification of two airports and the signing of the Executive Order on Ease of Doing Business in Nigeria.
It is important that the safety and security standards adopted in the Nigerian aviation sector be given proper attention to ensure the protection and safeguarding of all stakeholders against acts of unlawful interference or other threats. However, aviation security in Nigeria is fraught with challenges and this has brought about recent deliberations from the government, regulators, the aviation industry and the public.
In May 2017 the Federal Executive Council approved the allocation of N1.52 billion for the financing of preparatory steps towards, among other things, the reintroduction of a national airline. While this is commendable, the need for a national carrier cannot serve as the conclusive basis for a decision that will have adverse effects on national and economic planning. As such, the government must carefully consider and address the concerns regarding the re-establishment of a national airline.
The Nigerian aviation industry has the potential to contribute in excess of 5% to the nation's gross domestic product and support over 1 million jobs. Nigeria's recent achievements and Level 3 rating in the state safety programme implementation process have positioned the country to become a travel hub. However, the inherent challenges facing the industry must be addressed before this status can be achieved.
The Nigerian business aviation industry has the potential to expand significantly as the economy grows and diversifies, but some issues must be addressed in order to maximise results. As such, the business aviation industry needs an effective policy that will harness its potential and attract more foreign investment, as well as address safety and national security concerns.
The Civil Aviation Regulations were first promulgated in 2006 in order to establish national requirements that align with the Civil Aviation Act 2006. The regulations were most recently amended in 2015, following a review by the Nigerian Civil Aviation Authority which aimed to align the regulations with recent amendments to the standard and recommended practices contained in the Chicago Convention on International Civil Aviation and industry observations.
Over the years, questions have arisen as to the effectiveness and profitability of Nigeria's bilateral air service agreements (BASAs) for the country's economy. It is apparent that certain BASAs have been negotiated or renegotiated without extensive consideration of the commercial elements required for the industry to experience the proposed targeted benefits of such agreements. Further, there has been little emphasis on the economic realities which Nigeria is facing.
The International Civil Aviation Organisation (ICAO), in conjunction with the Nigerian Civil Aviation Authority, recently commenced implementation of the Africa-Indian Ocean Plan Aerodrome Certification Project for two of Nigeria's 26 airports. The benefits of ICAO certification are considerable – for example, it will help the government to achieve its aim of attracting investors into Nigeria by boosting the country's aviation safety rating.
In order to commence airline operations in Nigeria, a number of steps must be undertaken in line with the Nigerian Civil Aviation Authority Guidelines and Requirements for Grant of Air Transport Licence. The first step is to obtain a renewable air transport licence, which is an authorisation to operate cargo services or scheduled passenger services within Nigeria.
In 2015 the federal government announced its intention to grant concessions for Nigeria's four major airports. In light of Nigeria's existing economic climate, many experts and stakeholders in the aviation industry have backed this resolution. However, before this process begins, experts and stakeholders in the aviation industry have impressed on the government certain issues that must be addressed.
The aviation minister recently announced that a transition adviser will soon be appointed to assist in the establishment of a national carrier. Past experience would suggest that the most suitable structure for the carrier would be a public-private partnership led by the private sector, with government participation ensuring that the airline is not hindered by unnecessary bureaucracy and that the requisite approvals are received in a timely manner.
The Nigerian Civil Aviation Authority (NCAA) has prohibited the launch of remotely piloted aircraft (known as 'drones') in the Nigerian airspace without a permit from the NCAA and the Office of National Security Adviser. The NCAA stated that the move was part of the safety guidelines issued by the regulatory agency to drone operators following their proliferation in Nigeria.
A number of legal considerations apply in case of death on board aircraft – from the procedure to follow to who is responsible and whether compensation is available for the deceased's family. This update discusses the international conventions and the Nigerian statutory framework and guidelines that govern these matters and protect the rights and dignity of the deceased, their families and the airline carriers.
President Mohammadu Buhari recently expressed concern over Nigeria's lack of a national air carrier after receiving a briefing from Ministry of Aviation officials. Despite being informed of the challenges that domestic airlines face, the president ordered that expedited action be taken towards the re-establishment of a national carrier, and has inaugurated a ministerial committee to look into this.
Operators wishing to perform specific commercial air transport operations must obtain an air operator's certificate (AOC) from the Nigerian Civil Aviation Authority, which confirms that they have the required personnel, assets and systems in place to ensure the safety of their employees and the general public. The Civil Aviation (Air Navigation) Regulations 2000 govern the procedure for applying for, processing, renewing and revoking an AOC.
For nearly three decades in Nigeria the rights of passengers have largely been ignored by airlines. In a bid to address this issue, the Nigerian Civil Aviation Authority (NCAA) has introduced a passenger bill of rights. Its overarching objective is to protect the rights of passengers and increase their confidence in aviation services. However, the NCAA's commitment to implementing and enforcing the bill must be questioned.
The outright purchase of an aircraft is a highly capital-intensive venture. The emergence of alternative financing models to alleviate the financial burden associated with outright purchase has been welcomed by the aviation industry. This update highlights popular financing models adopted by Nigerian airlines, including lease financing, direct lending and Islamic financing.
When faced with higher-than-anticipated costs or the imposition of excessive tax and other charges by the government, most airlines have two choices. They can either raise their prices, risking upsetting consumers and losing market share to cheaper competitors; or they can sacrifice profits to keep prices steady and retain market share. However, in recent times some airlines have found a third solution: the imposition of fuel surcharges.
The need to provide adequate compensation for air travellers in the event of damage to their person or luggage – while also preventing excessive or spurious claims against aviation operators – has led to the development of a regime of international laws regulating the quantum of liability borne by air carriers in the event of accidents. This update outlines Nigeria's compliance with international regulations regarding air carrier liability.