Weaker naira, Reason for High Airfares In Int’l Destinations – GMD Finchglow Holdings

Mr. Bankole Bernard, the Group Managing Director, Finchglow Holdings Ltd, in this interview with Emmanuel Olisemeke speaks on the seemingly high airfares out of Nigeria to Europe and other international destinations, planned concession of airports and the reason for the success of Detty December organised by the Lagos State Government last December, among others. Excerpts: 

Air travellers originating from Nigeria have over the years lamented the high airfares charged by foreign airlines on the Nigerian routes, what is the current situation?

Personally, I will say that there has not been an astronomical increase in airfares over the years. It is just that our currency has become weaker. Airfares used to be at the Central Bank of Nigeria’s (CBN) rate. But now, everyone has moved to a central exchange rate. The rate of exchange for tickets is not standard anymore. So, the issue of blocked funds has disappeared.

Gracious, somebody was thinking enough to come with a policy that supports that. Not only that, even the airlines now can plan. They are not worried about anybody holding on to their money. They can plan effectively and that has helped them to say ‘we could invest more.’ Now, the question you as a journalist should ask yourself is: Why will British Airways go to South Africa and establish a regional flight there? And here, there are no regional flights. Does that stop the domestic carriers from competing? It means that they could synergise, they could collaborate.

But we have not created that environment that can make people synergise. Government should not get involved in business decisions. You are a regulator, create the enabling environment for these businesses to thrive and they will yield to the demands of the markets. So, how do you create such an environment? Are your landing fees competitive within your region? Is the cost of aviation competitive?

Have you gone around our airstrips? It is a disaster. We travel everywhere, even within Africa. And we see things being done properly. But we chose to do otherwise because we don’t pay attention to it. Go to our terminal. It’s shameful. So, there are certain things we just need to do as a nation through the government. When we pay attention to those things, things become a lot better for us. And we are able to make progress.

Will the concessioning of the airports bring out the best in our facilities?

When we are talking of the concessioning of the airports, we have to look historically. The concession that we have made in the past, what is the outcome? Is there any legal implication to it? I know that there are still legal battles between the Federal Government and the Bi-Courtney Aviation Services Limited (BASL), the operators of the Murtala Muhammed Airport Two (MMA2), Lagos on the concession that was granted. So, you think I as an international financier will want to come into that environment?

All these things that we are talking about airport concessioning, I think we are just dancing to the gallery. The government before now, spoke about concession for eight years and it’s gone. This government too is talking about concessions, in the next few weeks, it will be two years and in the next two years, you won’t talk about concessions again because it will be all about elections, except the election is now concessioned.

As it stands, there is a shrinking of capacity by indigenous airline operators due to absence of adequate aircraft, do you think establishing a leasing company in Nigeria will address this challenge?

You see, like I said, the government has no business in business. Regulators must always maintain their stance as regulators. The government can encourage the private sector, set up an equity fund to take care of this particular sector. These are things we see them do in China. The Chinese government picks about four major players in the agricultural sector, grant them loans to boost their business. This will lead to massive growth in the agricultural sector and at a reduced rate. The Chinese government is truthful, they don’t give such loans to cronies and friends, but to those with capacity, but in our climate, it will go to our brothers who will not invest it in the right channel. Accountability is what is lacking in our society.

The passenger traffic in Nigeria has been on the decline in the past few years, yet countries like Egypt, Ethiopia, Brazil, Indonesia and others are recording an increase, why is this so?

Well, first of all, it is difficult for us to establish the fact that Nigeria passenger traffic is not growing. And why is it difficult to establish the fact that we are not growing? It is simply because of the lack of a database. Any organisation or country that pays little or no attention to data is not willing to grow because data is what will help you determine whether you are growing and the percentage at which you are growing. This will help you to forecast and do projections for the future.

But unfortunately, our government has paid little or no attention to that. And I have said it in my previous interview, until the government pays attention to creating a data centre, then, the whole world will know they are in for business. There is a lot happening around the globe. Aviation is not what it used to be. A lot has changed. Has the Nigerian government or the industry even spoken about the scarcity of aircraft in the aviation industry globally?

For every situation, there are challenges and there are also opportunities. The foolishness of man is not knowing that there is a situation because when you don’t know that there is a situation, how do you now know the opportunities, not to talk of the challenges? But it is known globally that there’s scarcity of aircraft.

They have got to look at the entire aviation ecosystem. What new things have we introduced other than we renovated our glorified airports? Who has published the figures of any of these parastatals? Charity begins at home. Why can’t we hold ourselves accountable? We are telling the airlines, ‘we want to see that you are economically viable, so submit your financials to us.’ Who holds the parastatals accountable? Do we know how much the Federal Airports Authority of Nigeria (FAAN) is earning on a daily basis for instance? Do we know how much the agency earns monthly? I will say something to you, there is a nation that is growing in Africa astronomically. It is Morocco. They don’t have our population. They are very rich in agriculture. Their airline is the fastest growing in Africa at present. You can check the records.

At every point in time, they are growing their tourism significantly. They came to Nigeria to take a lot of Nigerian travel agencies to Morocco. They do daily flights and it is always filled to capacity. The question is what did they do? They used data to position themselves and they’ve been able to grow their country. Their airline is doing very well. They are growing tourism simply because these people did not joke with data. They will give you the figures. The facts and figures are with them. What have we done with ours? They are selling beyond Casablanca, Marrakesh and there is a city in Morocco called Fez, which is in the northeastern part of. It is often referred to as the country’s cultural capital.

What is your projection for 2025 Detty December?

Detty December will continue to grow. As far as they are concerned, our currency rate remains very weak. And we are fun loving people. So, it is very easy for anybody to come here and spend their Christmas and really enjoy themselves. Because when you are talking about Detty December, it is about going to places where you will have fun. It is like me saying I am going to Rio in Brazil because of the Rio Carnival. So, they know that in December, everywhere in Lagos is going to be fun. If you change $1,000, that is N1.6 million. Tell me how you will not enjoy yourself? In two weeks, you would have had a fantastic holiday.

Now, the question is this, as a nation, are we prepared for such? The opportunities are there, but we are not ready. Take for instance, Ogun State that is sharing a border with Lagos, are they even taking advantage of the opportunity of being next to Lagos? Do you know that you can live in Ijebu Ode and come to Lagos to work? It is a 45 minutes-drive if the road is good.

Because there are people working in Washington DC and they live in Maryland. They travel that route daily. So, what are we talking about? Is the Ogun State Government encouraging developers to develop the state? We are not interested. We are too selfish. Until that mentality changes, we are going nowhere.

Quotes:  “Detty December will continue to grow. As far as they are concerned, our currency rate remains very weak. And we are fun loving people.”