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DRIFTING IN TURBULENT

WATERS!

AVIATION INDUSTRY 2004

OVERVIEW

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17, CHIEF GBAJUMO CRESCENT, OFF ADENIRAN OGUNSANYA, SURULERE, LAGOS – STATE.

Tel/Fax: +44(0)7774037263 http://www.nigeriaaviationsafety.org/index.html

Chairman Founder Capt. Dung Pam Late Capt Jerry Agbeyegbe

DRIFTING IN TURBULENT WATERS!

AVIATION INDUSTRY 2004 OVERVIEW

On a global perspective, the aviation industry is just on the verge of initiating a recovery. The fallout of September 11 2001 is still resonating in the background. The war in Iraq and SARS has had their toll and the ripple effects cannot altogether be avoided. Finally, the fuel crisis has robbed the industry of profitability in 2004.

Just as a constitution is the final guiding document of any jurisprudent society. So is the civil aviation policy the lighthouse towards which the Nation’s stake-holders should be moving towards. The minimum ICAO standards and recommended practices will form the benchmark for determining how the Nigerian aviation industry has fared this year. This will enable the readers to be the true final assessors of the journey so far. In giving a fair appraisal, it is necessary to x-ray the component parts of industry.

Nigeria Civil Aviation Authority (NCAA)

Open skies and the International Aviation Safety Assessment.

In 26th August 2000, the Nigerian government signed a provisional open skies agreement with the USA with the expectation that the NCAA will be able to achieve the IASA (International Aviation Safety Assessment) category 1 certification soon after.

By Safety 1st We Stand Priority One

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Under the leadership of the current DG, the regulatory body has made spirited efforts to ensure that it meets the minimum ICAO safety oversight requirements. Simply put, we needed to prove to ICAO and the world that we satisfy ALL the following five requirements:

1. The country has laws or regulations necessary to support the certification and oversight of air carriers in accordance with minimum international standards;

2. The NCAA has the technical expertise, resources, and organization to license or oversee air carrier operations;

3. The NCAA has adequately trained and qualified technical personnel;

4. The NCAA has provided adequate inspector guidance to ensure enforcement of, and compliance with, minimum international standards; and

5. The NCAA has sufficient documentation and records of certification and adequate continuing oversight and surveillance of air carrier operations.

More than four years thereafter, and despite the efforts of the NCAA, this certification has eluded us. This means that any aircraft on the Nigerian register is not safe enough to fly to the USA, because it has not undergone the minimum safe certification process.

70 illegal aerodromes, airstrips, helipads operating in Nigeria

In the ministerial brief of December 2004,The Minister admitted that “ the high powered ministerial committee set up on the monitoring and control of the private airports in the country" has discovered more than 70 airdromes, airstrips and helipads operating illegally across Nigeria without license and control or supervision. This obviously means the system of continuous surveillance of air operations by the NCAA is grossly inadequate. This either means legal aeroplanes (known to exist in Nigeria) have been making illegal flights, OR out rightly illegal aeroplanes (not known to exist in Nigeria) have been flying illegally to these facilities. Either way it shows gross incompetence or gross negligence considering the assertion in 2002 by the then Minister that “NCAA generated requirements for certification and regulation of Airports, Airstrips and helipads”. Apparently, this was carried out without taking into account an analytical account of the subject matter.

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The slok-gate affair.

This is June 12 of the aviation industry, and if not redressed quickly will form the Achilles heel of our current system of jurisprudence. There is no masking the vindictive nature of the out come of this unpleasant travesty of justice. The punishment did not fit the crime. Refer to schedule 15 of the NCAR’s (Nigerian civil aviation regulations). Operating an illegal airport will be regarded a treasonable offence compared to adding two more aeroplanes that have been duly given a Cof A ( certificate of airworthiness) and just awaiting inclusion on the operational specification of a valid AOC (air operator certificate). The fact that over 3500 jobs losses have resulted from the revocation order slammed on Slok airlines should have triggered a rethink of the ill-conceived decision. If any such decisions are to be taken, it is beneficial for the authorities to brain-storm with the stakeholders in the industry to be able to harness the required synergy; Leadership should seek to build consensus rather embarking on unilateral action. This is definitely not the most efficient way to regulate our budding airline industry. It is highly doubtful that an autonomous NCAA would have been party to this serious error of Judgment.

Nigeria Airspace Management Agency (NAMA).

We are pleased to say that this para-statal has earned our pass mark in the year under review. Major achievements are primarily in the drive towards maintaining of navaids and man-power development. The agency has been able to harness the available synergy and the resourcefulness it’s personnel to be able to get a record number ILS transmitters serviceable ever in the nation’s history.

Building on past achievements

The changes at the top management level of NAMA have been effected seamlessly and without noticeable adverse consequences

Business Model and Financial Viability

NAMA’s revenue stream is set to improve following the move to provide effective navigation and landing aids. The result is improved user confidence and hence increased traffic. The Federal Government has agreed to assist NAMA with funding for the TRACON project.

Commerciality, Co-operation with the private sector,

Recent moves towards taking over the management of private airstrips are alarmingly retrogressive. Apart from this misguided attempt to expropriate private property, there is no sign that NAMA are addressing the possibilities in this field.

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HR Management

NAMA remains understaffed in the core professional cadres and overstaffed on the administrative/ancillary side. Commendable progress has been made in the area of staff training and development, as well as motivation through realistic pay scales.

Equipment, Radar versus ADS, Navigational aids, Power, Ground Facilities

The Total Radar Coverage project, which has been neglected for 6 years, is now on the front burners. The benefits amongst others things, will enhance national security as well as reduce pilot and controller workload. It is too optimistic to assume completion during the first quarter. The third quarter appears to be reasonable target date.

Successful tests have been carried out at several the airports in Nigeria that indicate a promising future for satellite-based landing guidance but nothing has been done to build on this foundation.

The poor liaison between NAMA and FAAN, particularly in the areas of quality power supply and control of aerodrome and approach lighting systems is still a source of friction and potential danger to the flying public. This has resulted in the inability to fully utilise the category II capabilities of the installed ILS ground beacons.

ICT Management

Some effort has been made to raise ICT awareness within the organisation; scope remains for a more radical review of working procedures and the business model and this will require absolute commitment from management.

Distribution of NOTAMs and other important information through the (presently rather inactive) NAMA website would be a good start.

Safety Management, Quality Control and Audit

There are indications that NAMA is actively working towards timely compliance with ICAO standards and Recommended Practices in this critical area. Unfortunately this has been marred by the assertion that illegal flight operations may have been taking place within the Nigerian airspace undetected by NAMA.

Reduced Vertical Separation Minima (RVSM) mandate,

The 5th January 2005 date for the implementation of the RVSM has passed without any feedback from the Nigerian RVSM management team. (Refer to NASI’s position paper of September 2004 on the RVSM). The level of inter agency cooperation and huge financial responsibilities required for a successful mandate may not be achieved this year if the team is not proactive.

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Nigeria College of aviation technology (NCAT)

As a paradigm, this is the Niger delta of the aviation industry. The most important resource the aviation industry can have is well trained and experienced personnel. The investments of all stake holders and the lives of the travelling public are finally entrusted in the hands of humans.

Notwithstanding the technological advancement, the cost and complexity of the redundant systems available, the human interface is still the deciding factor in the safety chain. Not to degrade human life by attaching any monetary value to it, just one brand new B737 cost over N5 billion (naira). Just like the Niger delta, this parastatal has suffered serious neglect and/or mismanagement until the advent of the current minister. The worst period was 1991 to 2003.

The lost decade

The last decade of the last century saw the graduation of only one set of flying students (SP 21). Meaning in that duration the school provided less than 50 new pilots to the industry. The absence of flying activity meant the quality of the hands-on internship acquired by both the maintenance engineering cadets as well as their air traffic control counterparts invariably suffered a decline. The college also lost a good number of experienced instructors. The effect of such neglect will be quite grave if not promptly arrested. Those responsible for this should be exposed and brought to book.

Academic upgrade for NCAT

For the forty years it has existed, NCAT has only been able to provide professional training in the somewhat sedentary aspects of aviation like, piloting, air traffic control, despatch, maintenance, etc. Even at that, the college has not been able to provide and carry out Airline transport Pilot training (ATPL).The idea of academic upgrade to a degree awarding institution has only received lip service. In May 1990, the then minister of aviation (Graham Douglas) on an inspectoral visit pledged to upgrade the college to a degree awarding institution. 1995 Five years later, when the first degree awarding ceremony should be taking place, we find another minister of aviation (Air Vice Marshall Nsikak Edouk) making the same unfulfilled promise. In 2001, Dr. Chikwe also spoke along the same lines. If the intention of our leaders is to see Nigerians play an active role in the future of our (Nigeria’s) Aviation development, special attention has to be placed on securing the foundation of sustainable manpower development. The long term goal is to produce personnel who will be actively involved in aviation research, development, design and construction processes. No nation can commence aerospace development without a functional and proactive aviation industry. No wonder, our satellite was launched in Russia.

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In 2004 alone, EADS (European Aerospace Defence and Space) systems and Boeing Corporation invested over USD$3billion in research and development. This is necessary in order to improve on the quality/efficiency of the science of aviation. Boeing Corporation’s gross earnings for 2004 stood at $57 billion, more than Nigeria’s ($43b) GDP for the same period.

Bold steps in the right direction

We sincerely commend the Minister for the genuine efforts to salvage this indispensable organisation. First, for entrusting it to a person of such credibility and pedigree as Mrs. Folashade Odutola and secondly, for getting the executive council to approve the funds required to implement the rescue mission. It is our earnest wish that the funds will be released without undue delay and the Chief executive will receive all the support needed to accomplish the mission.

NIMET

Business Model and Financial Viability

The transition from Ministerial Department (Directorate of Meteorological Services ) to commercialised agency (NIMET) seems to be proceeding smoothly, from the internal perspective. Externally, however, there has been hardly any change. There is nothing to indicate that NIMET will, in the foreseeable future, be able to support itself and perform its assigned functions without ongoing subventions from Government. The signs are that, sooner or later, end-users of NIMET’s services will be obliged to fund the Agency either through a dedicated tax or through increased direct charges.

Quality of Services

The scope of NIMET’s services extends well beyond the aviation industry but the Agency’s position as a parastatals of the FMA is an indication of its primary focus. On that level it has to be said that the impact of the new arrangement has, so far, been marginal. End users report that services are still mostly limited to actual weather reports from various destinations; en-route and other forecasts are not routinely available. NIMET is not making its full contribution to the safety of aviation and more needs to be done to improve the interface between the Agency and those who use its services.

ICT Management

The defunct DMS always had the best communications network in the Ministry of Aviation and is currently playing the lead role in effecting an ICT network to be shared by the Federal Ministry of Aviation (FMA) and all the aviation parastatals. This laudable project is in gestation and will eventually be judged by its impact outside NIMET.

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Equipment

The year witnessed efforts to upgrade he Agency’s technological base by procuring Doppler weather radars for six locations and the installation of several automatic weather stations. The Agency has made good use of Nigeria’s recognition in international meteorological circles to garner support and funding for its projects.

It must be presumed that, if and when all this additional technology comes online, along with other data-gathering units planned for on and off-shore locations, there will be a significant enhancement of input to NIMET’s service process. This, in turn, may lead to an improvement in the quality and quantity of service output, and benefit to end-users.

Federal Airports Authority of Nigeria (FAAN)

Airports present the portal through which a glimpse and hence a first impression of a country or place is made. Hence politically, it has become a pivot of a flurry of face lifting and face saving activities in the past five years.

Building on past achievement

Incessant and unexplained management changes have negatively impacted on continuity of programmes. This has frequently resulted in protracted or non completion of projects.

Business Model and Financial Viability

This has always grossed the highest revenue compared to other service providers. Poor initial planning has made it difficult to improve facilities and enhance service delivery. The criteria citing most of the 21 FAAN airports by the government was informed more out of social responsibility than economic viability. This has meant that revenue from the most profitable airport is used to fund services in others.

Commerciality, Co-operation with the private sector,

This offers almost limitless potentials that have remained undeveloped over the years. Progress has been made in the area of utilities and conveniences. Unstable political climate and declining economic fortunes have not allowed extensive and long term private sector investment. Presently, local security concerns and lack of essential infrastructure is threatening investor confidence.

HR Management

Progress is hampered by lack of cognate experience and the cost of specialised training. The prospect of training and deploying personnel to airports with very little activity leads to erosion of acquired skills. While the lack of training means absence of qualified personnel.

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ICT Management

This unit has been one of the first to embrace computing technology. Some effort has been made to put the relevant framework place but real-time connectivity remains a major drawback.

Airport development is closely tied to economic activity; however the following basic airport facilities need to be urgently addressed the absence of like:

1. Security of the airport perimeter.

2. Appropriate fire coverage.

3. Fuelling facilities.

4. Proper Apron and manoeuvring area lighting

5. Uninterruptible power supply for emergency exits and essential amenities.

So far, less than 30% of FAAN managed airports can boast of these basic facilities.

It is rather worrisome to hear that instead of divesting by consessioning airport management with private sector investors, FAAN and NAMA are to take over management of the very well managed private airstrips we have at the moment. This is incoherent with government policy on liberilisation and privatisation.

Nigeria airways ltd.

Liquidation

Against popular public and professional opinion to restructure, turn around and privatise, the government opted to liquidate the airline. The authority shrewdly files for “forced” as against “voluntary” liquidation in order to limit it’s liabilities to the proceeds accruable when Nigeria Airways’ assets are sold. The very poor execution of the process is the subject of much litigation and trauma.

Under the constitution of the Federal republic of Nigeria and the pensions act of 1999, employees of Nigeria Airways Limited are civil servants whose pensions and gratuity must be paid out of the consolidated revenue fund of the federation and not based on the proceeds of the operational unit.

In the light of this, payment of their gratuity and pensions (15 years minimum) should be guaranteed. Why is it difficult for the present administration to assure the staff of the liquidated airline that they will be paid their entitlements?

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Why is the government shielding the persons indicted destroying NAL, by the Justice Nwazota panel and yet feels no guilt in withholding salaries and pensions of the victims?

It is illegal to attempt to evict the staff from their official quarters without first handing them their severance pay? How do you expect them to resettle? The very barbaric and inhuman treatment being meted out to the hapless employees by government agents borders on human rights abuse and should be investigated by amnesty international.

We are afraid that Ghana airways which is about to be liquidated as well, may take a cue by the precedence set by the Nigeria.

Airline operators.

Two weeks of the September 11 terrorists attack, the US government approved a $ 40 billion package in order to protect their aviation sector. This is broken down into $5b direct grants, $10b loan guarantees and $25b security upgrade. European Union officials said they would be looking closely at the US aid package, to see if it needs to be matched in Europe. "We do not want a situation where European airlines are placed in a disadvantageous position," according to the European Union Transport Commissioner Loyola de Palacio.

The USA has three other policies aimed at protecting their operators and manufacturers, namely:

1. The fly America policy. 2. Owner ship and cabotage restrictions. 3. Chapter 11 bankruptcy protection. 4. Commercial launch loans and subsidies to Boeing.

The EU also has invested heavily into EADS which has 80% stake in airbus, enabling Airbus to offer new aircraft packages at lower prices than Boeing. In October 2004, Canada decided to increase aid to their local manufacturer, Bombardier and in Jan2005 agreed to give $168 million research and development grants to their engine manufacturer.

These and other forms of government backed financial facilities that have continually given the foreign carriers undue advantage over our local operators when it comes to operating here in Nigeria.

What incentives has Nigeria effected to foster its burgeoning airline industry?

Synergy: It is regrettable that while we accuse the government of failing to protect local operators against the assault of unfair foreign competition, the operators have also shot themselves in the foot by refusing to exploit the advantages of mergers and teamwork. It is a shame that they could not coordinate a merger and put forward a bid for the National carrier.

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Safety: The absence of accident does not infer improved levels of safety. Though 2004 was relatively free of accidents, the operating standards of most of our airlines still leave much to be desired. The quality of maintenance needs to be closely monitored with special emphasis on the history of components used in maintenance processes and the recording of deferrable defects. Reports reaching us point to possible violations in personnel duty/flight time limitations and inadequate simulator training.

High cost of operation

1. Inflation which averages 15% annually has constantly meant every year all foreign denominated expenditure increases by that value.

2. Fuel: This item, which accounts for about 30% airline operational cost, has been hiked by over 30% last year. This is the singular reason that prevented the global industry from making profit in 2004. Any increase above $34 a barrel will preclude any chances of profits this year.

3. Maintenance: The absence of any heavy maintenance facility locally is contributing to the high cost of operation. An average C check that is required every 18 months will cost about $300,000. The following is a quote by the former Minister (Dr. Chikwe) during her brief in 2002 with respect to the national hangar project.

“With the coming of the present Administration, the project was re-visited and contract for the construction of the hangar was awarded. This project has been in the pipeline for over 20 years and was finally realized with the support of Mr. President and the Federal Executive Council. Messrs A. O. G. Company who won the contract has already cleared the site and is ready to commence work.” What level of progress has so far achieved on this project? Why was this not even mentioned in the ministerial briefing of 21st December 2004.

4. Training: Airlines have to send pilots and flight engineers abroad for both initial and recurrent training since no simulator facility exist within the country or the West African sub-region. This further compounds the problem of capital flight and delays the much-needed transfer of skills.

5. Aircraft acquisition and insurance: Nigeria neither manufactures nor even assembles any aircraft, after over 40 years of aviation. So procurement is strictly an issue of importation in hard currency. The plethora of abhorrent taxes and duties that sometimes amount to nearly 10 % of value. The failure of the Federal Government to ratify the Cape Town Convention on aircraft leasing has been considered the albatross of the nation's domestic airlines in securing favourable aircraft lease terms for their operations. Airport charges have been increased and new types of introduced. It is feared that a new security charge is about to be invented.

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Aviation professionals.

The axiom that a bad tree cannot bear good fruit implies that the standard of professionalism in the industry can not be better than the standard and reputation of the Regulator. It is pertinent to state that over 60% of our practicing professionals have received certification from foreign agencies whose standards are unquestionable.

The assassination of Capt Jerry Eyitome Agbeyegbe.

This was a national tragedy and a loss to aviation safety advocacy. Jerry was an enigma, he lived what he believed and died defending it! He may have been stubborn, recalcitrant and aggressive, but he is usually proved right. So far in the nation’s history, no other single individual had ever created such a stir, and contributed immensely towards enhancing aviation safety. His body may have been subdued, but his ideology has become immortal.

Expectations for 2005.

1. Transparency, accountability and probity

This has been touted as the theme song for this administration, now in its second term. We would like to see the government walk the talk. The internet is the most efficient method of disseminating information. The web sites created by a few of the parastatals are not only poorly designed but also provide little or no information about them apart from their official addresses. Our investigation reveals that one has not been updated since 2002. This feature could be used to keep the public adequately informed about the detailed activities of these organizations. Functional details like projects being planned, work in progress and those completed. This will greatly raise public awareness

In agreement to the proposal made last year by the ministry of finance, we urge government agencies (especially the six parastatals of the ministry of aviation) to publish a quarterly update of their financial activities on their websites (internet). This will further strengthen the resolve to stem corruption and improve public confidence.

The essence of probity is to make known the truth. Where the truth exposes acts that are in contravention of the law; like abuse of office, misuse of government resources, and outright fraud, we demand an appropriate intervention by the relevant arm of the law. This will serve to vindicate the innocent wrongfully indicted by the probe report as well as penalize those who are indeed culpable of the allegations.

In this vein, we hope to see the probe reports on Nigeria Airways and the Nigeria College of Aviation technology properly investigated by the EFCC and the police.

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2. Loan guarantees, grants, subsidies and Tax incentives. This should facilitate acquisition of more modern and efficient equipment and reduction of local expenses.

3. A second national carrier with AON (airline operators of Nigeria) holding at least 80% stakes, given at least the same route monopoly extended to the proposed virgin-Nigeria.

4. A commercial simulator Facility sited at NCAT to cater for the growing fleet of B737 in Nigeria and the West African sub-region.

5. The completing of the National hangar project that was contracted in 2002, and the emergence of full service maintenance repairs and overhaul organisations.

6. The bill on the autonomy of the NCAA being passed in to law. 7. Concerted efforts from all parastatals of the ministry to provide safe and

quality services. 8. Those responsible for the assassination of the Capt. Jerry Agbeyegbe

unmasked and brought to book. In recognition of his contribution to safety and aviation development in Nigeria we request an annual Aviation Safety Award named after Capt. Jerry Agbeyegbe.

9. Better liaison with FAAN to ensure Provision of the non existent components of the ILS approach lighting, threshold, and touchdown zone and runway centreline lights to fully utilize the capabilities of the installed ILS ground beacons.

10. Total radar coverage of the entire Nigeria airspace (Kano FIR) by the end of this year.

11. Provision of modern equipment to aid effective ATC service and to complement the current TCAS mandate. Examples are the Medium term conflict detection (MTCD)and short term conflict alert systems (STCA)which are completely absent in the country’s busy ATC centres.

12. The RVSM management team needs to be more proactive.

The need for a civil aviation advisory council

In conclusion, NASI wishes to resolutely advocate the urgent need for the formation of a civil aviation advisory Committee comprising of stake holders that will confidentially and critically x-ray our policy decision before they are made public. We are not favourably disposed to circumstances where our leadership is publicly forced by events and more articulate public criticisms of policy decisions, to rescind or jettison planned programmes does not increase the much needed confidence in this High profile global industry. Reliance alone on the bureaucrats within the Ministry structure has proved the bane of our current regressive state.

(visit us at http://www.nigeriaaviationsafety.org/index.html) Questions should be addressed to:

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Capt. D.R. Pam – Chairman, NASI governing council

Engr. E. Offiong- Deputy Executive Director

Friday, February 27, 2004