On Monday, United Nigeria Airlines expanded its operations to Accra, Ghana, in a unique style. It was a momentous occasion that showcased Africa?s cultural richness and paid tribute to one of the continent?s most influential figures.

At the Nnamdi Azikiwe International Airport in Abuja, a vibrant cultural troupe was on hand to launch the maiden flight, leaving everyone in awe. At the Kotoka International Airport, another energetic troupe of Ghanaian men and women, dressed in colourful traditional attire, entertained the guests with lively performances.

What?s more, the aircraft was named after the late Ghanaian President, Jerry Rawlings, reminding all present that his place in Africa history is sealed.

After the flight, United Nigeria Airlines founder, Professor Obiora Okonkwo, spoke to a select group of journalists on how the carrier intends to sustain the route and challenges confronting airline operations in Nigeria, among other interesting issues. Excerpts

You have just activated the Accra route. What is your competitive edge and strategy to remain sustainable in this highly saturated market?

Passengers can only buy tickets from airlines that are available. We have not been available in the market, so we could not have competed. Now, we are in the market, our first strategy is promotion, letting people know that we are here with an exceptional service to offer. Our CRJ-900 for that route is a beautiful aircraft. The aircraft is like a genius, the configuration is great, the interior is marvelous, it is very suitable for this kind of operational flight, it has a passenger capacity of 90. So, if we have an adequate and a reasonable number of passengers to fly there, that aircraft will be dedicated on that route. We also have ERJ-145 to compete. Pretty much, we are offering the passengers not only apple to apple, but also what is bigger and better than apple. That is one way to tell you that we are ready and we are prepared. In terms of the saturation of the market, at least from available data, out of the whole region of West Africa, traffic from Nigeria to Accra is more than all the other regional flights. I mean the whole traffic from Nigeria to other regions. 50 per cent of the traffic is between Nigeria and Accra. So, it is still a place to compete. In other words, we have to be as reasonable and fair as possible with our pricing and costing. Above all that, we will do more than the passengers? expectations. Every passenger will want to have a convenient schedule, and then with that convenient schedule, will want to get there on time. If you look at our records at United Nigeria, our on-time departure is almost 98 per cent, if not more. There is no record that is better than that. Those things we have developed out of our experiences in the domestic market, we will take them to the regional.

On the regional route, the Federal Airports Authority of Nigeria, FAAN, gets about $80 as passenger service charge. The NCAA gets $20 as security levy. That is apart from the five per cent ticket sales charge that still goes to NCAA which will now be disbursed among five other aviation agencies. This issue of tax or levy has really denied a lot of people air travel. With these charges and the heavy competition that is expected on that route, how do you intend to sustain this route?

This should be the industry?s concern. This should be a national concern because it is not to government?s credit that Nigerian airlines that start operations in the region would close shop shortly after. All the airlines that operate majorly are private companies and they can only operate on a route if it is sustainable. The maximum you can fly is three to six months, unless you have some support. Nigeria has a reputation to tax more than any other country, and that is not good for aviation. It is not good for the passengers. Every passenger taking off from Nigeria to Ghana is already paying $100 and then returning from Ghana to Nigeria is $60. If you have to go that route from Abuja to Ghana, you buy a ticket for as much as N300,000 and you put tax and fuel, you would find out that that ticket is free. It is zero profit to the operator. Such things are killing us and suffocating us. If the taxes are so high and Nigerian operators can?t remain competitive on that route, these other people who are coming, whatever ticket you pay, is a capital flight from Nigeria. It is a capital flight because those foreign airlines, even if you buy their ticket in Nigeria, they have to convert that money and send it back to their own country. There is no obligation that they must leave the money here. You can imagine that Nigerian airlines are competitive and not suffocated by all those charges. For instance, they have access to single digit loans, they can acquire more aircraft, the business can be taken away from the international carriers. In such a case, the companies that would be closing shop now would not be Nigerian companies, it would be all those people that have been exploiting these routes.

The current administration is putting in efforts to grow the aviation sector. However, the issue of access to single digit loans and numerous taxes and charges are still there. What are the impacts of taxes and charges on airlines as well as lack of access to single-digit loans?

When we talk about single-digit loans, we are bearing in mind that aviation is one worldwide and the competition can be very high. In Nigeria, we are competing in the same market with other large carriers and legacy carriers such as British Airways, American airlines, Lufthansa, Qatar, just to name them. In their country, they have loans at two to three per cent, not even a special window loan. Compared with our market, we have to loan in Naira, convert in forex at the existing commercial rate, which is already over 30 per cent. It is a spillover effect.

One way or the other, all these things are factored in costing. When all these things are done, it is just our ticket as the major product. For instance, a trader or business person, or manufacturer who has a product has to factor in everything that went into the product before arriving at the cost. The components must be able to cover cost before a tiny margin is added. Automatically, if somebody in another country is getting interest loans at five per cent and we are getting it at 35 per cent, my ticket cost is already 30 per cent more than it should be in that country. However, when you do not do that directly, you will deprive yourself of other benefits. When you fail to do that, you find yourself at a level where you cannot make enough margin to grow, expand and strengthen your business. Business must be able to remain sustainable. It must be viable to attract financing because airlines are capital intensive. The business owners can only scale up with huge finances. These finances are mostly available with the banks or other financial institutions. For them to do business with an operator, the operator?s books must be very attractive to show a good business plan. We are asking government to treat aviation as an essential business. It should not be seen as a business of one individual because where there is strong aviation, it is a catalyst, it is an enabler to other economic growth. If you do not make it available for people to fly from Abuja to Lagos comfortably, it will affect their business. The point we are trying to make to the Nigerian government, the policymakers and even the general public is that, for instance, there are attachments put on agriculture that bring all those incentives. Yes, feeding is good, but it is just as essential as aviation. There is no government economy that will grow if focused only on the lower income elements. For any nation to grow, they have to put in place a policy that is good enough to break the middle class and even upper class. I do not think that any country can achieve all its economic growth from tax. You cannot tax yourself, you cannot tax your country, you cannot tax your citizens to greatness. I strongly believe that tax is necessary, but it has to be that tax that will enable other things to grow. We still have certain things that have been considered in this new review for the aviation industry that is a killer. It will erode all the good intentions this government has for this industry.

Minister of Aviation and Aerospace Development, Mr Festus Keyamo, who was represented by the ministry?s Permanent Secretary, Dr Ibrahim Kana, at the launch of your maiden flight said government has given duty-free importation on aircraft and spare parts. Can you share insight into that?

It is duty free. There are still some highly disturbing taxes. We still pay one per cent of the Economic Community of West African States, ECOWAS tax. That one per cent tax should be totally eliminated because you pay that one per cent tax on the duty value of the aircraft. When there is no duty, you cannot put something on nothing. That one per cent should be gone, but they will always say it is for ECOWAS. Do not forget that all these things we are asking for are not a special favour. I don?t know of any country that puts duty on aircraft. There is none. So even if there is nothing so special for us, let them do what other progressive countries are doing. While Ghana is taking $60 from passengers, Nigeria is taking $100.

Even if it can not be reduced, put it at $60. What it means is that $40 is already to the benefit of the passengers. But their easy explanation is that you are not paying, the passengers are paying. But when you are outpricing yourself, it is affecting your market value. We also think that even the five per cent passenger charge is becoming extremely too much for us to bear. They always say, you don?t pay, passengers pay. The bottom line remains that all these things are in violation of the International Civil Aviation Organisation, ICAO, and International Air Transport Association, IATA aviation rules. By this law, the proceeds or the revenues generated in aviation should only be commensurate with your own expenses. It is to cover your expenses of delivering that service, but not to generate revenue for the country. It might interest you to know that apart from all this money that is being collected, we pay for every single service. We pay adequate resources to cover every single service that is offered by the NCAA. If they are going for inspection, we pay. If they issue any renewal, any certification, we pay. So, what is that five per cent for? It goes into government revenue. NCAA is one of the government agencies that can feed revenue to the Treasury Single Account, TSA. This revenue that is collected from us, that could have been part of our own revenue to strengthen our capacity, goes into other government fundings that are non-aviation. It is not done anywhere in the world. The most you should get is to plough it back into aviation services because this recognises the fact that aviation is an essential sector that offers services beyond revenue, not only to the regulators, but also to the operators. We are being taxed to death. It is too much that we cannot even breathe anymore. It is suffocating us. We are only urging them to apply what is existing in other progressive countries.

Yuletide is around the corner. Any moment from now, more passengers will flock to the aviation industry, and this is a season that we usually have delays and cancellations. How prepared is United for this period? In terms of aircraft fleet, how many aircraft do you have in your fleet that are serviceable?

We have scaled our operations and our capacity. By the end of this month, we will have nine aircraft. We are ready to deploy these nine aircraft to serve both old routes and new routes. On some old routes, we are going to increase our frequency on those old routes. Like Lagos, for instance, we are doing about four to five flights everyday. Before the end of the month, we will do about six flights. What it simply means is that every hour you can get to the airport and travel from Abuja to Lagos on United Airlines within the operational periods. For the aircraft, we have a 100-passenger capacity and 180-passenger. As for the delays and cancellations, 95 percent of them do not happen because of the operator. The Yuletide period is when we have unfavourable weather. What happens is that if you have your first flight, let us say from Lagos to Asaba for 6:30 am and then the aircraft is on ground and then you want to have the weather information from Asaba, which may have come in around 5 am at the end, there could be low visibility to Asaba. You cannot take off to Asaba in a very bad weather situation, you have to wait for that weather to clear. If the weather report came by 6 am, the next time you should have that weather checked would be by 7. If it isn?t clear by 7, you have to wait for 8. If it is such a bad day that the weather does not clear, you have an aircraft on ground, which is not supposed to be so because you calculate aircraft value and revenue by the hour of flights made. You have a crew that is already on standby at the airport, and probably if they had gone into the aircraft to ensure all was well for the flight, their duty time was already counted. In other countries where people think that delays and cancellations are not available, you could have as well flown from Lagos to Asaba under that weather condition, if the necessary technology is in place, which you call the Instrument Landing System, ILS. With ILS, you can close your eyes, land in any airport with zero visibility. If this equipment is not provided in the airport, it causes delays.

You have hammered on taxes and levies. Starting from December 1, the NCAA would introduce the $11.5 security levy on inbound and outbound international passengers. What is your reaction to this?

What is happening is that aviation has become like an elephant, where a whole lot of people are feeding on. All of these people who are plugged into aviation, the operators are the hens that lay the golden eggs. Every charge is put on the operators. Before now, there was $20 security. One wonders what security they are providing. The $11.5 is coming from immigration. I do not know whether when they were talking about this, the NCAA did not inform them that it already had $20 security. If you would recall, there was controversy surrounding the $20 security. It was collected for many years and it was like the subsequent governments forgot about it, until one minister came and discovered, saying there is actually some money here and embarked on some renovations. If you collect what is supposed to be for security, and put it into some corporate services, or staff welfare, or innovation, it is collecting money by false means. It is dubious. I believe that we can find out what other countries charge and if it is commensurate with ours and if it is really applied for the purpose for which it is meant. I do not know of any security that the NCAA provides at the airport.

Aside from United Nigeria, there are two other domestic airlines operating to Ghana. Does United intend to partner with them?

Yes, we have the spring alliance to that effect. The spring alliance is what we have between some of the domestic operators like Air Peace, Aero and Arik. We will apply that on that route. United Nigeria is open for collaboration with the Nigerian operators. We have an open arm and we welcome any opportunity to deepen that relationship. (Vanguard)

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