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Aviation sector needs special Forex window, says Aisubeogun, former FAAN MD

A former Managing Director of the Federal Airports Authority of Nigeria (FAAN), Dr. Richard Aisuebeogun has admitted that the present Nigerian airline business climate has been positively competitive.

He however said that for the industry to witness continuous growth and stability in 2024, the sector would require government intervention and control of the dwindling foreign exchange market or even provide aviation businesses special window access to the much-needed foreign exchange.

Former Managing Director of FAAN, Dr. Richard Aisuebeogun

Aisuebeogun lamented that institutional funding had been very low, stressing that the volatile nature of the market makes commercial bank funding challenging to access and equally unattractive due to the high cost of funds.

The former FAAN MD who is the co-chairman NIGAV Award Committee in his review of the sector in 2023 and outlook for 2024 was optimistic that the full capitalization of the aviation leasing company of Nigeria would help airline owners attract the capital needed for fleet improvement.

He noted that there is a need for the industry to consider several funding options for aviation projects by establishing a structured funding instrument like a sector bank that can guarantee the financial stability of the industry.

The Federal Government, he reiterated would need to discuss and subsequently negotiate with the Dangote refinery or indeed any other private refinery initiatives in the country for a quick response to jet fuel availability to avoid crises for the airlines.

“Aviation in Nigeria remains the safest means of transportation and the quickest modal facilitation of economic growth. The industry in the year 2024 is projected to suffer setbacks due to the low spending power of Nigerians due to the present cost of living, but if the government supports the industry directly, it will help change the trend of the slumping economy by providing the interstate and international mobility required to drive high earning services.”

“This can come in the form of tax incentives, waivers and deliberate and consistent policy of air transportation infrastructure improvement by reducing short-term expectations from aviation and removing aviation from the TSA remittances.”

He called on the Minister of Aviation and Aerospace Development, Mr. Festus Keyamo to prevail on the Acting Director-General of the Nigerian Civil Aviation Authority (NCAA) to wield the big stick on any organization business promoters that deliberately violate the strict adherence of all sections of economic regulations requirements in the industry, stressing that this would add to guaranteeing a safe, secure and efficient air transport.

Speaking on the 23.1 billion budgeted for the rehabilitation and repairs of airport facilities across the country next year as part of the Minister’s budgetary proposal of N63 billion for 2024, he said, “Although, this may be small. If the government’s concession plan is followed through and becomes successful, the additional funding for such an upgrade would come from the private sector.”

“It is expected that 2024 will see the full concession of some airports, which are likely to be fully concessioned using the best business model, as the government no longer has the resources to fund the airports to the world-class airport solely needed by Nigeria. This then brings about the question of what FAAN will become, which the past administration did not give a definite answer to in the concession plan.”

He was of the view that in 2024, the safety and security gaps identified in the International Civil Aviation Organisation (ICAO) audit report would be closed, adding that also this year, more emphasis and funding must be directed at training at all levels as the country has become quite deficient in technical, professional and managerial manpower in all aspects of the country.

Aisuebeogun

He recommended that for continuous growth, the current administration would need to harmonise the five-point agenda of the present aviation administration with the earlier aviation roadmap, pointing out that a review of possible hindrances to the roadmap is required to offer a way forward for all to key into its implementation.

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