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Published On: Tue, Oct 28th, 2014

Nigeria needs a 30 year aviation plan to catch up with the world – Amenechi

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Etihad-Airways2Chris Amenechi is a 25 year executive veteran in the airline industry.

His career spans executive leadership experience in revenue management, pricing, distribution, planning and corporate strategy, E-commerce, digital and data strategy, marketing business process transformation, ancillary strategy, and merchandising. He’s currently the Vice President, Revenue Management of Porter Airlines, Canada’s third largest carrier.

With your rich experience in airline business, in what ways can Nigeria tap through her potentials in helping herself in the development of aviation?

The Nigerian aviation industry has significant upside. Unfortunately, the leadership over the last 30 years has not been consistent or visionary enough.

The previous missteps made in this respect, has left it moribund for the most part so it is not a surprise Nigeria is lagging it’s global peers. So, what are the opportunities? First and foremost, the industry is not referenced or defined by one airline alone especially as some circles call for a government national carrier.

The industry spans the breadth of airlines, airports, intermodal transport infrastructure, maintenance and overhaul, hospitality, tourism, technology, manufacturing, distribution, airway infrastructure, cargo/logistics, defense, etc.

Nigeria needs a focused 30 year infrastructure plan focused on all these areas. I call it the “aviation/aerospace excellence 2045″ plan. It is not for my generation but for our children’s children benefits. • Commercialize our airport infrastructure with the following goals • Handle 200 million passengers a year • Become the industrial parks for Nigeria’s economic springboard

• Increase general and recreational aviation • Become the domestic and international tourism gateways for each city/state.

This means FAAN needs to become a competitive outfit alongside other global airport operators, grow to a large multinational, create employment, and justify its existence.

Are you pleased with the growth of the sector not only in Nigeria but in Africa?

I am not surprised at where we are in terms of development.

Specifically, Africa is now the least developed in aviation/aerospace infrastructure. Fundamentally, for the continent’s economy to grow, intra-Africa traffic and flights must increase significantly. The

continent is bigger than the US and Europe together in size and look at the anemic capacity to travel from Nigeria to Tanzania? Each government is guilty of unjustified protectionism when it comes to access to their gateways. Given the immense economic growth opportunity for over 150 million people to travel within the continent alone, Africa will be in a much better state and could be driving a $120+ billion injection on a yearly basis.

What about market access and the challenge of securing funds to grow the industry?

Fundamentally if there’s an enabling environment, the funds will show up. I’ll give you an example, if I am in Burkina Faso and want to travel to Tanzania at the moment…it’s a problem. Why?

There are no direct or even simple connecting flights. However, once there is stability in policies, infrastructure direction, the investments or funds will show up to support airlines to fly these markets. Cost of aircraft is not different for anyone in this industry, the issue is the enabling environment needed to run or compete in the industry. The risks are too high for the best business plans.

You led the efforts to introduce Africa to the continental map as MD of Nigeria/Africa based in Lagos. The Open Skies pact between Nigeria and USA is described as one sided, what better ways can Nigeria benefit more from the pact?

Based on the question above, you know where I stand on this. The agreement is generally fair. It can be one-sided if one side does not live by the spirit of the agreement. Let me illustrate further:

The Nigerian customer now has more choices – 3 nonstop flights to major US gateways. Yes, airfares in general have come down and European connections are no longer the norm. In fact, this opens up more seats at cheaper fares to European gateways. The same agreement also allows connections via Middle East gateways like Dubai

The Nigerian airlines have the opportunity to fly wherever they want in the US. They must operationally pass the US technical and safety prerequisites first.

This is a lengthy process and any airline must be prepared already to undertake it. It is no different for the US carrier trying to fly into Nigeria. So, how is it one sided?

Some airline operators and analysts say that opening six gateways in Nigeria will dilute the market. Do you agree with this view?

There are about 5/6 gateways in Nigeria. The issue of diluting the local market through these gateways is complete idiocy in my opinion.

How do you then develop Infrastructure? Why can’t I fly from Asaba to London nonstop? Why fly via Lagos, if the market is there? If an airline wants to develop the market, Federal/State governments should be encouraging the effort. If the market is not there then nobody flies to Asaba. If the airlines build the market and prop up the economy, the states and local governments will also begin to take notice….all foreign carriers want to fly into a gateway if they know they have a formidable partner that can bring people to/from every domestic/regional point into their flights into Lagos, Abuja and/or Port Harcourt. The whole thing of trying to force one gateway, while logical to the average eye is highly destructive long term to development. I keep saying that you cannot force it, as much as you keep trying, you’ll never succeed or develop. It’s very short sighted and myopic. You have to open this market so investors can go build, and anyone who’s smart enough will figure it out and will want to build local capacity. If I build my capacity everybody will want to play with me.

There’s an argument that our airlines are too small to compete with larger global carriers, so the need a national carrier. Do you agree?

That’s a commercial decision. You need many carriers and let the fittest survive.

You don’t want a national carrier. Secondly talking about competition; you can never win in the UK being a Nigerian carrier, they own that turf, it’s their territory. So you have to find a way to partner with somebody there, so you can spread your wings in that market.

How many Nigerian carriers partner with any carrier in the UK or in SA? The issue with us is ….if five carriers with three planes cannot work, then it can’t work, end of story.

If you want to restrict people coming into your country, you’ll not grow your infrastructure and your economy will not grow.

In what ways can start up airlines drive revenue vis a vis what airline model to be deployed?

The revenue goal for most startup airlines is focused around the low operating costs and low fare models.

My issue is that the operating environment is still a bit immature for the model. However, there are a few markets where the model can proliferate and create a change.

I think there is room for all types of models and even uniquely uncharted models that are Africa centric should be embraced.

How does this fit with proponents of low cost airline model compared to government policy?

Africa does not have the infrastructure for a low cost carrier model. It’s not that we don’t have airports or airlines, we do. What you don’t have is a mindset, a visionary mind set. I’ll give you an example, MMIA Lagos acts like its god.

They must pay us to fly into MMIA. LHR begs airlines to fly into them despite the fact it’s a crowded and busy airport.

They court airlines to fly there, and yes it’s difficult to get slots, but they’ll present you with operating airlines with options on slots, because they don’t want you to fly to other airports.

Now tell me, has any manager in Enugu airport gone out to court any local airline to fly there?

There’s no incentive to do so. When you’re a commercial private entity the mindset will flip.

Then the creative mind will set in; get intermodal traffic to get people from everywhere to come into the airport.

What’s lacking is understanding, a mind-set of the integral part of what aviation does for the country and even the cities.

Atlanta is the largest airport in the world, but you know why it is? Because it’s the natural distribution point, a trucking point, between the south, north east and west of the U.S. Then it became an airline distribution point.

It brought people from the north east, south east, west and mid west into Atlanta and distributed them around the country. And that’s why it’s the largest airport in the world, and it has a vibrant economy. Why can’t Benin, which used to be the biggest transport hub in Nigeria or Kaduna or Abuja or Akure be the same in Nigeria?

FAAN should be commercialized or go private. Government has no business running an airport.

There was a time Nigerian government accused foreign airlines operating into Nigeria of price fixing, what constitutes fair pricing?

I am not sure I am qualified to discuss the specific allegations and resolution.

On a separate note, pricing in the airline industry is the most transparent thing any regulator can find.

The competitiveness is so intense that airlines can change fares 3-4 times a day and competitors match each other so no one has an advantage. To the untrained eye, this looks like price collusion but it is so far from that.

source: Nigeriatravelsmart.com

 

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