There is the issue of maintenance and insurance, which are paid in dollars. That is apart from paying for aeroplanes. The habit of maintaining our aeroplanes outside the country is unsustainable. It will kill all of us. Each time a Nigerian airline prepares to go for maintenance in Europe, the company gives an estimate of $1.5 million for the check. However, the airline ends up paying closer to $3 to $4 million at the end of the checks. That is unsustainable. Insurance is also paid for in dollars.

Import tariffs

On import tariffs, it was 1.5 per cent, and then the previous government of the late President Muhammadu Buhari removed it. Even though it was announced at the top, the people under did not implement it; they were still holding us to the 1.5 per cent. If an aircraft is $50 million, imagine what the tariff of 1.5 per cent of that is. In the new tax regime, it has been increased to four per cent. Can you imagine paying four per cent of $50 million? Again, our listening minister said he would intervene, and the intervention appears to have granted us the reprieve of that four per cent. However, government is also bringing back the 7.5 per cent Value Added Tax, VAT, in the new tax regime.

Solutions

What can we do to navigate this obstacle? The first is to try to get cheaper aircraft financing, because it is the biggest problem. If you see my management accounts, the line for finance costs is huge. That is direct profit. If we were not paying those heavy finance costs, we would be such a massively profitable airline. So, we need to do something. We have to start maintaining our aircraft. If not by ourselves, we can in our country because we are being scammed. Maintaining our aeroplanes outside makes it difficult to plan properly. Also, airlines need to be more productive in the utilisation of aircraft. The rest of the world uses aeroplanes plus or minus ten hours a day. We use our aeroplanes between five and a half and six hours a day. That’s about six sectors a day. If we could do eight sectors a day, we would do much better because what has happened is that at the end of the year, we have 1,080 fewer flights per aircraft than our average competitor elsewhere, and it is for many reasons, including infrastructure. Because we are unable to utilise our aeroplanes, we operate 720 fewer flights per aircraft a year than all our competitors elsewhere in the world. That is huge money being lost. These are the things that we can do, but we are not doing. Another thing is that we need to grow. Three, four, five, six aircraft per airline won’t work. To climb as quickly as possible, an airline needs 10, 11, 12, 15, or 20 aircraft to have a chance of being a sustainably successful airline and being a profitable entity. We must move away from being small. We need to plead with governments to help us reduce the numerous charges, as they are taking a toll on our ability to be profitable. Of course, we also need to lobby for the reduction of the exorbitant regional fees; they make flying around Africa a very daunting experience. (Saturday Vanguard)