Connect with us

Business

Aviation professionals outline paths to sector recovery

Published

on

Professionals from different disciplines in the aviation industry have suggested various ways to ease the pains and ensure progress in the sector over the next 12 months.

They spoke during different interviews with our correspondents. A retired airline captain, Muhammed Badamosi, raised concerns over the state of Nigeria’s aviation sector, warning that years of neglect, weak regulation, and poor infrastructure could push the industry to the brink of collapse if urgent reforms are not undertaken.

Badamosi likened the sector’s development to “a journey where you take one step forward and two steps backwards,” arguing that little has changed over the past decade.

“In terms of infrastructure, financing, and regulatory oversight, the aviation sector today is no better than it was 10 years ago. Which of these areas has truly improved? We need to ask ourselves honest questions if we want progress.”

According to the retired pilot, Nigeria’s major airports are still operating with obsolete navigation systems that the rest of the world has long abandoned.

Badamosi explained, “Since the 1980s, most of our major airports have relied on Category 2 Instrument Landing Systems and VOR for navigation. Globally, aviation has moved on to Category 3-1, 3-2, and even 3-3 systems. What are we still doing here, more than 20 years after joining the world on Category 2 ILS?”

He noted that while Nigeria is spared the extreme winter conditions of the northern hemisphere, the limitations of Category 2 ILS still pose risks. He said, “In severe weather, Category 2 ILS is practically useless. We are only lucky that what we deal with here is mostly harmattan haze and short-lived fog.”

Badamosi also pointed to deteriorating airport infrastructure, including runways and taxiways that require urgent rehabilitation or outright reconstruction.

See also  No power, no growth, Dangote warns govt

“Have we achieved total radar coverage under TRACON? I don’t think so. These are the things that make airports safe. Without them, safety is compromised.”

Another major concern raised was the prevalence of ageing aircraft in the country’s fleet, many of which are second-hand. He cited recent incidents involving nose-wheel collapses during landing or taxiing as troubling signs.

“Some of these incidents should never have happened,” Badamosi said. “In some cases, the Nigerian Civil Aviation Authority is complicit because of corruption in the system.”

Badamosi criticised the current structure of aircraft inspection within the NCAA, noting that inspectors often stay far longer than regulations allow. “Inspectors are meant to be engaged on three-year contracts, renewable for just one year. Today, some have been in the system for over eight years.”

He explained that the original policy was designed to reduce the risk of inspectors becoming compromised by operators. “If you ask the Director-General, he may say it’s cost-effective,” Badamosi said. “But it’s time we weigh the cost of training against the cost of flight safety.”

He also described federal funding for aviation as inadequate, noting that about N714bn has reportedly been budgeted for aviation services. “That amount is highly inadequate for a sector as capital-intensive as aviation,” he said.

As a solution, Badamosi suggested concessioning some airports to reduce the financial burden on the government and improve efficiency. “The government can help itself by concessioning airports if Nigeria wants to be highly rated in global aviation,” he said.

Looking ahead, he stressed the need for sustainable financing and strategic partnerships. “Aviation is capital-intensive. Both airlines and service providers need sustainable financing to meet the challenges ahead. Members of the Airline Operators of Nigeria should seek partnerships with foreign airlines willing to operate here.

See also  U.S terminates all trade talks with Canada

“One of the reasons foreign airlines are reluctant to lease aircraft for operations in Nigeria is the state of our infrastructure. If these issues are not addressed urgently, the sector risks collapse and possible blacklisting.”

Also speaking, the President of the National Association of Nigerian Travel Agencies, Dr Yinka Folami, insisted that the controversial claim about 18 taxes on airline operators was unfamiliar to industry professionals with decades of experience in airfare construction and ticketing.

He called for a government probe of the claim for the benefit of all. He explained that in over 50 years of NANTA’s existence, the assertion of 18 government taxes on a single ticket was new to the association, which has over 4,000 registered members.

He, however, said the claim of 18 taxes on each ticket may not be impossible but insisted it required proper enquiry and deconstruction. “Unfortunately, everyone has become an expert on aviation taxes. But leadership demands focus. Let us stop speculation and interrogate the construction of these alleged 18 taxes.”

“In June, a Lagos–Abuja one-way ticket sold for about N100,000 or less. By December, it jumped to between N200,000 and N250,000. Government taxes did not change within that period. So, the increase cannot be attributed to taxes.”

He insisted that such fare increases were a result of airline business decisions influenced by seasonal demand, not government policy.

Also commenting, travel analyst Lucky George attributed the persistent fare challenge to capacity constraints by Nigerian airlines, rather than taxation. George said the Nigerian aviation market serves over 200 million people, yet capacity is limited, stressing that high fares are largely a result of supply failing to meet demand.

See also  CBN warns that naira abuse is driving up printing costs

He argued that high prices have made air travel inaccessible to a large segment of the population, despite strong demand. George also canvassed the re-establishment of a new national carrier, declaring that the current indigenous airlines lack capacity.

Industry expert Olumide Ohunayo emphasised the need for stronger collaboration among airport authorities and for unruly passenger cases to be taken beyond media attention to actual prosecution.

He also argued that rising airfares should not be dismissed as a seasonal issue. According to him, government support in helping airlines acquire more aircraft and establish local maintenance, repair, and overhaul facilities would ease capacity constraints and ultimately reduce ticket prices.

“First, I really want to see real synergy among airports and take unruly cases beyond the airport and media to the prosecution stage. We have seen in other climes where offenders are punished by the law because of rules that automatically take effect when airport laws are violated.

“The system follows through to ensure that airport offenders are punished, but here, what we see is that after media reports, everybody goes to sleep. That is why we continue to have a recurrence of bad behaviour at our airports. Nobody should be above the law.

“Rather, the government should continue to help airlines get more aircraft and also establish MROs within our domain. These measures will help drive airfares downward. What we have noticed is that there is a capacity constraint, and this aspect needs serious attention at this time.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Read how Nigerians tap savings, loans to buy Dangote refinery shares

Published

on

Some Nigerians seeking to invest in the Dangote Petroleum Refinery and Petrochemicals FZE Initial Public Offering have turned to personal savings, loans and proceeds from the sale of assets to raise funds to buy shares, Saturday PUNCH has learnt.

Findings by our correspondents revealed strong interest in the shares among prospective retail investors, some of whom said they expected the investment to yield substantial returns in the future.

While some respondents said they were dipping into savings or raising funds through other means, others said the prevailing economic hardship had made it difficult for them to participate in the offer.

The refinery opened its IPO on Monday, September 14, giving Nigerians an opportunity to own equity in the company.

The offer comprises 4.1 billion ordinary shares priced at N525 each, with the company targeting about N2.15tn to part-fund an expansion that would nearly double the refinery’s capacity to 1.4 million barrels per day.

The minimum subscription is 10 shares, costing N5,250.

Dangote Group Chief Executive Officer, Aliko Dangote, said the low entry threshold was deliberately set to allow ordinary workers, including drivers, cooks and domestic staff, to become shareholders, describing the offer as “the IPO for the people.”

The offer is expected to close on October 13.

Investors turn to savings, loans

A staff member of the Federal Ministry of Works, David Adelabu, described the shares as expensive for struggling civil servants but said he considered the offer an opportunity to become a shareholder in the refinery.

He said, “I have small shares in some companies, including Glo and MTN, but Dangote’s shares will be the highest I will be buying. It is on the high side, but I feel this is an opportunity to become a shareholder in Dangote.

“I understand that the dividends are not going to be immediate, but I don’t mind even if it will entail selling a plot of land I have in Metumbi here in Minna. I will gladly do so.”

A trader in Dutse, Jigawa State, Adamu Bala, said he planned to use savings from his business to buy the shares.

See also  Federal Govt Secures €21m German Funding For Clean Energy Transition

“I will not sell my house. I will use a small profit from my shop to buy,” he said.

Similarly, a civil servant, Fatima Mannir, said women in her group had started raising money through contributions, known as adashe, to participate in the offer.

“We have started raising money through adashe,” she said.

A trader in Damaturu, Yobe State, Malam Musa Ibrahim, said he invested part of his business savings after learning about the offer.

“I am using part of the money I have saved from my business.

“I believe that if I can invest a small amount now, it may become useful to me in the future. But I am also being careful because business is not easy at the moment,” he said.

Another resident, Aisha Mohammed, said she raised money by cutting down on some household expenses.

“I did not borrow money to buy the shares. I have been saving little by little, and when I heard about the offer, I decided to use part of what I had saved,” she said.

A businessman, Abdullahi Yusuf, however, said he obtained financial assistance from a friend to increase his subscription.

“I wanted to buy more shares than what my savings could afford, so I discussed it with a friend who agreed to lend me some money.

“I know that borrowing money to invest carries risks, but I am hoping that the investment will perform well. I will repay the money from my business income,” he said.

A petty trader, Hauwa Lawan, said she sold some personal belongings she no longer used and added the proceeds to her savings to finance her purchase.

“I sold some things that I was no longer using and added the money to my savings,” she said.

A farmer, Mallam Abdullahi Adamu, said he sold farm produce to raise about N500,000 to invest in the shares.

In Kano State, an investor, Abdulmalik Ibrahim, said he bought 10 shares for N5,250 using personal funds.

Hardship keeps some investors away

While some Nigerians are finding ways to participate in the IPO, others said economic pressures had put the investment beyond their reach.

See also  U.S terminates all trade talks with Canada

A civil servant in Kogi State, Saliu Joseph, said he would have loved to invest but had just paid his children’s school fees.

“Right now, I don’t think I can afford to participate unless a miracle happens,” he said.

A retired permanent secretary in the state, Bola Boro, also said he would not participate because he could not afford the investment at the moment.

“As a retired civil servant, I cannot afford such an amount to invest in the offer. Even though I am a fan of investment through the stock market, which I have been doing for years, I don’t think it will be convenient for me to participate considering the time frame of just one month,” he said.

A civil servant, Kuta Abdulahi, said the financial demands of his children’s education had left him unable to participate in the share offer.

“I must tell you the truth, I know about the Dangote Refinery shares, but I cannot even think of it at this time. My children are just resuming a new term in school. Where will I get the money for their school fees before thinking of buying shares? Please, I have a lot on my head,” he said.

Similarly, a vulcaniser, Ahmed Alkali, said his income was barely enough to meet his family’s basic needs, making investment in shares difficult.

“With the kind of job I do, I am working from hand to mouth. So, how can I buy shares when I have not eaten?” he asked.

Experts warn against borrowing

Investment experts, however, cautioned Nigerians against taking loans, selling properties or committing all their savings to the IPO, warning that equity investments carry risks.

Speaking with Saturday PUNCH, the Group Managing Director of Lancelot Group, Adebayo Adeleke, urged prospective investors to understand the risks associated with the capital market before committing their funds to the IPO.

Adeleke, who is also a former Secretary of the Independent Shareholders Association of Nigeria, said capital market investments should be made with funds that investors could afford to leave untouched for the long term, noting that equities were unsuitable for people struggling to meet immediate financial needs.

He said, “When you buy shares, you are buying a portion of the ownership of the business. Investment takes a lot of time to pass through gestation, to stability, to profitability. And you cannot, with any degree of certainty, predict when the company is going to turn the corner and begin to produce profits.

See also  No power, no growth, Dangote warns govt

“So, investment money is not the money you are likely to need in the next two months, three months, six months, even one year. If you cannot part with your money for a minimum of three to five years, the capital market is not the place to invest.”

Adeleke, however, described the IPO as a strategic investment, citing the refinery’s scale and demand for its products.

Also speaking, the Head of Financial Institutions Ratings at Agusto & Co., Ayokunle Olubunmi, urged Nigerians to consider the risks associated with the investment and avoid committing all their savings to the offer.

He said, “There are plenty of risks to this business. It’s not risk-free. Things can get worse for the business. Valuation is based on expectations of what will happen in the future. Things might not go as planned. And, like we all know, equity is a risky business.”

Olubunmi particularly cautioned prospective investors against selling property or using up all their savings to invest in the offer.

He advised them to invest only a portion of their funds and diversify their portfolios.

The expert also advised those considering taking loans to buy the shares to have a separate and reliable repayment plan rather than depending on returns from the investment.

The Emir of Kano, Muhammadu Sanusi II, had earlier warned prospective investors against using their children’s school fees or selling their homes to invest in the shares.

Sanusi, who gave the warning on Thursday while speaking at the company’s roadshow in Kano, urged prospective investors to invest only money they could afford to set aside for some time, suggesting amounts such as N10,000, N20,000 or N30,000.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

Continue Reading

Business

ARE NIGERIANS BUILDING CHINA’S ECONOMY WHILE NEGLECTING THEIR OWN?

Published

on

While other nations are busy producing, manufacturing and exporting, Nigeria must ask itself a difficult question: Are we building our own economy, or simply creating a bigger market for other countries?

Nigeria has a huge population, abundant natural resources and a massive consumer market. Yet the country continues to depend heavily on imported finished products—from electronics and clothing to machinery, household goods and other consumer items.

The issue is not simply about Chinese businesses or businesses from any other foreign country operating in Nigeria. Foreign investment can bring capital, technology, jobs and expertise.

The bigger issue is whether **Nigerian businesses are being given the opportunity and support to manufacture competitively at home.

Instead of remaining primarily a consumer of finished products, Nigeria needs to strengthen its manufacturing sector and move further up the value chain.

Nigeria needs to produce, not just consume.

A stronger manufacturing economy could help Nigeria:

* Create more jobs for Nigerians
* Add value to locally available raw materials
* Develop industrial skills and technology
* Reduce excessive dependence on imported finished goods
* Build competitive Nigerian companies
* Increase the country’s ability to export

The goal should not be to drive legitimate foreign businesses out of Nigeria. The goal should be to build an economy where **Nigerian manufacturers can compete, grow and eventually take Nigerian-made products to markets around the world.

The question Nigerians should be asking is simple:

**Why should Nigeria remain one of the world’s biggest markets for finished products when we have the potential to manufacture many of them ourselves?

See also  Olodo uprising: Tinubu aide faults critics of First Lady’s Akara, Kuli kuli comment

🇳🇬 **Nigeria must move from being predominantly a consumer nation to becoming a stronger producer, manufacturer and exporter.

What do you think?

Which products should Nigeria prioritize for local manufacturing instead of relying heavily on imports?

Share your thoughts in the comments.

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

Continue Reading

Business

ICRC defends toll pricing on highways

Published

on

The Infrastructure Concession Regulatory Commission has defended the toll pricing structure under the Highway Development and Management Initiative, saying charges are evaluated against the quality and benefits of the upgraded roads.

In a statement made available to PUNCH Online on Thursday, the Director-General, Dr. Jobson Ewalefoh, cited the 227-kilometre Akwanga–Makurdi road corridor as an example.

He said the route has four toll gates, and motorists pay as they travel along it.

He argued that toll payments should be viewed against the previous costs imposed by the poor condition of the road, including lost man-hours, vehicle damage and accident risks.

Feedback from road users, he said, shows many motorists are willing to pay tolls where they see clear improvements in road quality.

Some drivers have expressed support for similar arrangements on other major corridors if the roads are upgraded to the same standard.

“That, to me, is the beauty of a well-structured PPP,” Ewalefoh said.

He explained that negotiators carefully consider toll pricing to keep charges fair. A portion of the revenue is set aside specifically for road maintenance. Under the concession agreements, the government does not bear additional maintenance costs for the duration of the contract.

The government must repair potholes within 48 hours, and it funds major routine repairs from the dedicated toll revenue.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

See also  CBN warns that naira abuse is driving up printing costs
Continue Reading

Trending