LAST_UPDATED2 Sunday, 12 August 2012 18:11 Monday, 13 August 2012 00:00

Written by BIODUN AKOMOLAFE

Since the sad Dana Air crash of June 3, 2012 which subsequently led to the suspension of licences of seven of the ten airlines operating domestic services in the country , the remaining three airlines have increased their fares by about 100 per cent.

In this interview the managing Director Chief Executive Officer of Aero contractors airline, Capt Akin George told BIODUN AKOMOLAFE,  that  contrary to the general belief that the airlines have been smiling to their banks,  have been faced with the  recent  tax, fuel surcharge, imposed on the airlines by Nigerian Civil Aviation Authority (NCAA) , even as the number  of air travelers across the country has dropped drastically. He argued that the airlines are left without t any option than increasing the air ticket price, if they have to meet cost of operation.  Excerpt:

Could you please tell us briefly about your self and designation in this airline, Aero Contractors and what impact  you have made on the airline since you came on board as the chief executive officer?
 My name is Captain James Akinlawojo George, the Managing Director of Air Contractors Company of Nigeria. I have been in office since Jan, 2011. When I took over the office, don’t forget I have been with Aero contractors for 23 years  so I have been part of the restructuring till date. By the time when we came in we have been in the constructive programme and I have to come in and continue that process that would get us to where we need to get to.

I have passed through a lot. When I finished my flying course, I went to University I did aviation management in America;   I also did Bachelors in Aeronautical Science and Masters in aviation management. Following my living school, I worked as a flight instructor in America for a short while before this opportunity came forth. I came back home and joined as a co-pilot here; I have worked through all the various departments here before reaching this managing director position.

Since the unfortunate  Dana Air Crash of June 3, and the suspension of the operations of most of the domestic that followed, Aero has remains one of the three airlines operating in the country since then. That means that you have been smiling to your bank since then especially as you have increased your air ticket price by almost 100 per cent. What is your take on this?
That is not correct. That is what people believe. It isn’t correct. The reason why is that since the unfortunate accident, the total number of  people flying in Nigeria has dropped.  When you came in , you saw me that I was using my computer. I was calculating passenger numbers.  What we have in reality is that because the passenger number has reduced drastically. Yes, there is a little bit of pressure on the Lagos Abuja and Port Harcourt but that is it. All the other routes are not performing as they used. So, the total number of passenger outflow, we believe we are down in the industry by about 30 per cent.

But you have increased your ticket price to make up for this short fall?
Well, no; you see our business model has always been to offer the Nigerian flying public a reasonable fare. Yes, our ticket prices have gone up. But there is a reason it has gone up is not because  of pressure or anything like that. The reason it has gone up is that, as you know we have been asking the to reduce the taxes on aviation and all that. But in reality, the taxes have actually increased as of the beginning of this August the Nigerian Civil Aviation Authority (NCAA) actually increased the taxes on each ticket. That is why we have have to respond by increasing our fares a little bit. But our business is to offer you what you call realistic value for money.

 Aero is the only airline in the country operating rotary and fixed wing aircraft. This implies that you have part of your operations in the oil and gas sector. How do you think the passage of Petroleum Industry Bill (PIB) before the National Assembly would benefit the company when f the bill eventually passed and assented by the President?
That bill is going to affect the ability of more operators into the oil and gas sector. Not from the flying point of view but from the oil point of view. We are to service that industry,

But look at its implications on the aviation industry?
Yes, for us in the aviation industry, what we have is that, we have the ability to talk to more customers in that regard and so, it is no longer talking to big players of Total, Agip and co, now there are a lot of other companies that are also requiring services and they need the expertise of operators like us to also keep them in business that is where we come in.

You don’t think it would affect you?
Well, hope so we have seen the increase in the request from people, requesting whether we are able to provide services to them. We are waiting for it to manifest into actual contracts.

Last year the Federal Government through the Central Bank came out with a bail out policy for the Power and Aviation sectors by providing funds to help the airlines, including Aero,  address their debt profile. AMCON was said to have managed the fund to discount the debts with the banks. There are indications that AMCON is trying to get into the management of the airlines to be able to retrieve the funds. How are you relating with the financial organisation?
Well, We have started talking directly with AMCON since the end of last year, November or December, when we started talking to them.  This was not on our own insistence but the insistence of our bank which went to go and meet AMCON. So it was not that we wanted to. But since we were put in that position, we have spoken to them. We are yet to get the final on it. But we believe that in the next two to three weeks this will be done. We are close but we can say for the last eight months, we have been running on  own internally generated funds.

Is Aero threatened that AMCON would be coming on its management board?
We have been working with them and it has been quite cordial. Everything they have done is what we have negotiated with them. So it is not that they have come in and said they are going to take over the management of Aero Contractor. One thing people fail to realize is that aviation is not like other companies. It is a highly technical field and bringing just anybody to run the airline, is not something that anyone should look at.  If not, we would go back to where we are running from.

Talking about taxes and other charges in the industry, how do you think that government can help the industry considering the series of taxes imposed on the industry?
Definitely, this is what we have been saying for a while. We have said it quietly and in the open, The fact remain that the cost of running an airline is quite high. And the idea is that the only way to make a profit is either you reduce your cost or increase your revenue.

And I am sure if you increase your revenue and ask people to start paying N40, 000 ticket for a one way trip to Abuja, I am sure there are only very few people who will come. If this country wants people to travel, which in itself would increase the revenue of the country herself in terms of the Gross Domestic Product (GDP), then they need to facilitate people moving around  and the easiest way to move around in Nigeria this point,  is by air. You know in most countries, we have a total package where you seeing road, rail, water and air. That is from the countries point of view. As the infrastructure in Nigeria is, the only mode of transportation viable in terms of large numbers today, is air.

And if find that air that is to say, like you mentioned, now there is need to give water a break in taxes, you gave road the same thing, you gave rail the same thing. Then you come to air that has the highest number of people moving around on daily basis and then you decided that you are going to tax them. And then taxed them to the hills and when I say tax them I don’t mean direct taxation, In terms of importation everything that requires airports to operate, even down to some kitchen items and all that, they are all imported. All now you come to the state where it comes to double taxation.

I look at what the NCAA  has just done now they say we had the fuel surcharge and the fuel surcharge was not taxed before. But fuel is already taxed. There is already a N2.90 per litre. So, it is not that it is taxed. Now, NCAA is going to tax five per cent again on top of it. So, the question is why? Now that N2.90 is going to Federal airports Authority of Nigeria (FAAN) which is a government agency. Now the five per cent we used to pay to NCAA is also distributed amongst all the aviation agencies.

Now, you have taken the N2.90 through FAAN into government purse so you are going to take five per cent on top of that again back into the same system; so, what are we talking about?  if now sit down and look at it say we paid these taxes , and we say okay what are the taxes used for?  It is to also help us.

But  each time we go to the NCAA and we say we want to do an inspection of an aircraft, we pay for it. So if our taxes are in there working and then anything we asked for we pay for again, then where are we? And that is what we are saying it gets to a point we have to ask that for how long are we going to continue like this? The whole idea is that give us an enabling environment we need to work. But it is happening in the opposite direction where instead of reducing the taxes, the taxes are actually going up and that is the issue we have at this point in time.

There are agitations from every quarters both in and outside the government that we  need an hangar to stem capital flight from the country. But with what Aero and Bristol helicopters have on ground in terms of maintenance facilities both In Lagos and Port Harcourt, how do you think the Federal government could come in to help in developing these facilities to the level  that D-Checks could be carried out in the country?
O yes, like I have said about the services we already provided.  I am not one that believes that government should come in and do everything. Like some people calling that there should be national carrier and all that.  And that is why I advocate that there should be enabling environment where we can work and do what we want to do. If I have a hangar and equipment that I require  I am able to make money from there. I am saying give me the opportunity to make money from what we have from this point in time, I am not able to make a profit from that and if I cannot, why should I spend my own money o and put in.

If the government comes in and builds me hangars and then walks away. But  I think of not make money from it, Then where are we?  Now the  government comes in and builds this hangar, Everybody is going to be happy for the next two three years. But  In reality what are we doing? The hangar are not  going to solve the problems. Why we are successful in this area is that it is not just infrastructure of having the hangar.

You have been there and you have seen the personnel that we have. One thing we take pride in is our total workforce in relation to the rate of expatriate is only six per cent. But the fact remains that as we grow, the only way to expand, is to bring in expatriates because even as we are training people, the people are not still experienced. So just as we are training Nigerians, we still bring in expatriates to help us do the work and maintain the quality and standards that we need.