Capt. Nogie Meggison is the chairman of Airline Operators of Nigeria (AON). In this chat with Daily Trust, he said airlines are ready to pay their bills to aviation agencies if they come up with accurate figures as those being bandied about are virtually non-existent. He also speaks on the challenges airlines face on the perennial scarcity of aviation fuel.
What is the situation now regarding the scarcity of aviation fuel?
It is sad and pathetic that for the past two to three months, we have been experiencing unstable fuel supply. It is really affecting us in different ways. One of them is that it is not just epileptic, but you are not sure when you are going to fly. It is also making us delay our flights and unable to provide service for our clients. Almost 50 per cent of our flights are either being delayed or cancelled. You see a businessman coming to the airport for a 9 a.m. flight and departing at 4 p.m.
Already in Nigeria, we are suffering. Most of our landing facilities and equipment that were working in the 90s, in 2000s and even right from the 80s are not working and we are having a situation where you can fly to only some of our airports, apart from the big four, between 7:00 in the morning and 6:30 in the evening. An aeroplane is built to fly 24 hours but in Nigeria, what we are facing now is we only fly 11 hours daily. Because of the inefficiencies of the service providers, you are having to run 11-hour shift. From the 11-hour shift, you are now having a deficiency again because of the fuel epilepsy. So you only have around five hours on a 24-hour business projection. You don’t need to be a rocket scientist to find out what is going to happen to that type of business.
We have reached out to the government to come to our aid and we are hoping and praying because we have a government that is listening; a government that we voted for, for change and we believe and pray that it will listen to us soon. We have a minister that is an aviator and we hope he will take our plights to the appropriate quarters.
How did you take the fuel price increase from N105 per litre early this year to over N200 now?
It is obvious that there is a cartel; there is something behind it. Because this is happening in a country where we were buying fuel in March, April for N105 and today, four months down the line, you are buying it at N200 per litre in Lagos only. Once you go out of Lagos and you start to move into the hinterland, it goes as high at about N240.
It is clear that there is a cartel, or a price fixing at the detriment, sadly, of the Nigerian masses. You can go and look at the profit returns and the first quarter or half year report from the oil marketers, they are now making three times what they made last year at the detriment of Nigeria and Nigerians. I believe that the government needs to step in this time to stop and break that hold.
But how do you find the claim of the marketers who say this skyrocketing price is as a result of forex?
Yes, there is no problem, we have foreign exchange restriction and availability of forex to import. But when you look at the country next door that is also importing, like Accra, today with the government’s assistance, it is selling fuel at N120. We have no reason as a country, if we want to grow our economy, to sell fuel at N200 per litre. It is clear that aviation is a catalyst for any economy to grow. It is part of the wheel and a pivot for any economic stand. If you take any country as an example, once there is recession, the first yardstick you get is aviation and the government jumps in there to subsidise it so that people can continue to travel because you need to spend money to make money. You cannot shut the doors and tell people you cannot travel to the hinterland and expect the wheel of the Nigerian economy to move smoothly. So we need aviation to distribute the people. Without aviation, our recovery from the economic woes that we are going through would be impossible.
But to be fair to the government, they are beginning to shift body and give us a listening ear to see how they can provide the fund for Jet A1 importation but the fear is always that the same marketers that we are talking about will take the same funds and use it to do something else. So we are working out modalities to see how we can get the government to provide that fund and ensure that it is used strictly for aviation.
What about having our local production of Jet A1?
The minister of Petroleum has assured us that by the end of this year, the refineries in Nigeria would be back on stream and would be producing Jet A1. We pray this comes to pass because in the 70s, 80s, 90s, Nigeria produced Jet A1 and with the price of oil today at $50 a barrel or the average, if Jet A1 is produced locally, we would sell it for less than N75 per litre which would bring us down to another 65 per cent off what we are trying to sell. It is obvious that the airlines would pass that buck to the Nigerian populace so that we can get our business back in an efficient way and get our economy growing again.
There is a growing call for Nigeria to have its Maintenance Repair and Overhaul (MRO) facility for carrying out checks on aircraft, how feasible it this?
It is obvious now that without an MRO, aviation or airline business would not take off in Nigeria. Once you have five airplanes, you need to control your maintenance to be profitable. Sadly we are not looking into that. It is like the saying in Nigeria that agriculture can replace oil but agriculture cannot just start on its own, you need to put the policies and the template on the ground. Today no MRO can survive with the policy on ground; the policy is raping, undermining, starving, strangulating, bastardising.
What is that policy?
You want to set up an MRO for example, you need to provide the land. I just got an application on a land, I have been negotiating with them. The down payment is N350 million for a plot of land that can only build a small sized hangar and the lease for the down payment is only 20 years and they also want five per cent of your turn over, not of your profit. Which bank or banker or financier will look at that kind of a thing and give you money. From the onset, it is a non-starter, it is a drain pipe.
If you want to encourage an MRO, you need to put the policies in place; you need to provide the funds. No MRO can start with 26 per cent interest rate of today. You need to provide the foreign exchange for an MRO facility to import its equipment because we don’t produce even a nut. So there are a lot of things when you talk about MRO.
Aviation agencies are threatening to ground airlines operations over unpaid debt of over N30 billion, what is your reaction to this?
We have been talking to the agencies. To start with, there is no business that you can do on your cash even as a country. We take loans and we take a debit position but when you call it debt, is it a credit position or a debt. A debt must be agreed between two people. I think the numbers that they are calling are phantom and ridiculous. They need to go back and do their research to find out the right number. A lot of these agencies have not even done audit for themselves in 10 years. So if you don’t have an audit book yourself, how can you say somebody is owing you money? If you go back and do an audit, you would probably find those numbers are just phantom. They are calling those numbers in the air just to get government attention and the attention of Nigerians. The N30 billion they call does not exist.
One thing AON is standing for, which we are pushing now is that we cannot continue to finance people’s personal habits. They (agencies) need to go back, look at their numbers and come up with accurate bills, not throwing phantom numbers in the air for people to be harassing others. We would not be intimidated. We have borrowed money from banks at 26 per cent, we believe in Nigeria, we are Nigerians and Nigeria must grow but we would not sit down as a group of people that believe in their country, and have gone to take money from banks to subsidise the habit or the extravagance of these so-called service providers or agencies.
But how committed are airlines in servicing their debt?
It is a two-way thing. If you bring the accurate bill of what airlines are owing, AON has repeatedly said and we have put it in writing, we will pay our bills but we are not going to pay phantom bills that do not exist in order to get an attention. Ask them; all these bills that they are calling since 2001, 70 per cent of those airlines do not exist today and it is the same harsh environment and queer methods that these agencies have applied that killed all those airlines of years past. I can name almost 15 — Okada, Kabo, Chachangi, Sosoliso, HAK, Freedom, Sahara, Premium, Bell-View, and several others
