PRESENTATION AT THE INTERACTIVE FORUM WITH THE AVIATION STAKEHOLDERS

By Senator Hadi Abubakar Sirika

Honourable Minister of State Aviation 16th May 2016

Federal Ministry of Transportation

OUTLINE

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Section 1: Introduction Section 2: Our focus

Section 3: Other Challenges in the Aviation Sector

Section 4: May to May

Section 5: Conclusion

1. INTRODUCTION

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Aviation is pivotal to growth of key economic sectors certainly not limited to travel and tourism, agriculture production and distribution, rural development, trade and commerce, manufacturing, oil and other non-oil sectors. It is that critical tool necessary for economic transformation of any nation. Indeed, the value chain creation by aviation is enormous.

.… INTRODUCTION

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✤The Nigerian market is a market servicing a population of 600m people in West and Central Africa.

✤Half of Africa, twice the US and far greater than continental Europe

✤Considering 10% of the population only, that is 60m pax within the region (not considering international transit)

✤Nigeria having about 40% of the entire population is therefore a good market.

2. OUR FOCUS

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The present administration is focusing on issues that will rapidly develop the Aviation sector within the shortest possible time and is as follows:-

1. Safety and Security What are the Challenges ? a. Global safety and security challenges b. National Security Threats from Terrorismc. Compliance with International Standards & Best Practices (ICAO Audit etc)

Government’s Responsea. Comprehensive security threat and vulnerability assessmentb. Certification program for airportsc. Development of a new security strategy in partnership with international

security organizations (NTSA to take the shape of TSA)d. Procurement of modern/state of the art equipmente. Capacity development

…. OUR FOCUS

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2. Infrastructural development through airport concession What are the Challenges ? a. Obsolete and dilapidated Airport/airspace infrastructureb. Inadequate capacity c. Facilities do not meet international standards and best practices

Government’s Responsea. Concession of four major airports (Lagos, Abuja, Port Harcourt and Kano)

first phaseb. Airport infrastructure upgrade and renewal Programmec. Completion of Four New International Terminals (Target)

…. AVIATION SECTOR STRATEGY

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…. AVIATION SECTOR STRATEGY

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…. AVIATION SECTOR STRATEGY

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…. AVIATION SECTOR STRATEGY

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3. National Carrier What are the Challenges ? a. Capital flight b. Absence of National and strong Flag Carriers c. Maximization of Bilateral Air Services Agreement (BASA) Multilateral Air Services

Agreement (MASA) and Open Skies advantagesd. National Image and Prestigee. Choice of appropriate Business Modelf. Corporate governance and Management g. Inadequate capacity of airport and airspace infrastructure

Government’s Responsea. Establish a National Carrier in order to gain optimal benefits from the BASA/MASA.b. National Carrier will be publicly owned/listed (institutional investors, public offering)c. Form alliance and/or Joint Venture with other airlines to increase reach and number of

routes.d. Engage Transaction Adviser to develop appropriate business model and framework for

establishing a National Carrier using a Public Private Partnership concepte. Provision of required infrastructure to support the expected growth.

…. OUR FOCUS

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4. Maintenance, Repair and Overhaul What are the Challenges ? a. Absence of a major Maintenance, Repair and Overhaul (MRO) facility in

West and Central Africa.b. High cost of aircraft maintenance.

Government’s Responsea. To create an enabling environment for the setting up of a world class MRO

facility that will attract clientele from all over the World especially Africa.b. The MRO will further be encouraged to start manufacturing of airplane parts,

with intent to go into manufacturing for the long term (Ethiopia and Brazil)

…. OUR FOCUS

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5. Agro-Allied Cargo Infrastructure What are the Challenges? a. Lack of Infrastructure b. Billions of Dollar market, with Nigeria having insignificant sharec. Poor marketing

Government’s Responsea. Agro Allied and Cargo Terminals developmentb. Planning to achieve 40% market share c. Socio-economic impact:

i. Curb Rural-urban migration ii. Reduction in crime rateiii. Massive rural development

d. Forex earningse. Employmentf. Increase aviation activities (including local markets)

…. OUR FOCUS

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6. Establishment of Aerospace University

What are the Challenges? a. Absence of high level management cadre.b. Absence of research and development capabilities to evolve long term plans

and strategic vision for the industry.

Government’s Responsea. Establishment of a university that will specifically produce the needed

workforce for better efficiencyb. This is to be achieved with technical and management support of ICAO and

some donor nations.c. This item will require legislation and the Government will provide the

enabling environment.

…. OUR FOCUS

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7. Restructuring of Aviation Agencies

What are the Challenges? a. Dearth of professionalsb. Ageing workforce c. Unsustainable level of staffing

Government’s Responsea. Focused capacity buildingb. Staff Verification/Biometricsc. Review of people, processes and technologyd. Drive towards a leaner organization for the agencies e. Agencies to become self- accounting entities for efficiencyf. Review of Acts setting up the Agencies to upscale governance and reduce

overlaps in functions

…. OUR FOCUS

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8. Aircraft Leasing

What are the Challenges? a. Limited access to capital and high cost of funds (27% interest rate) b. High debt profilec. Inadequate number of aircraftd. High cost of leasing

Government’s Response Establishment of an Aviation Leasing Company

…. OUR FOCUS

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3. Other Challenges in the Aviation Sectori. Employment Policy Challenge✦Currently, there are lot of trained professional aviators especially pilots

that are unemployed in Nigeria while foreign aviation professionals are taking these jobs meant for Nigerians and are paid in foreign currency..

Solution✦Government to enforce expatriate quota system and policy review

validation of Foreign License (no Aviator left behind policy).ii. Aviation Development Bank✦To pursue the APC led Government’s intension to create an Aviation

Development Bank for industry entrepreneurs to get long term funding at reasonable interest rates (single digits).

✦This will support growth and stability in the industry

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.… Other Challenges in the Aviation Sector

iii. Foreign ExchangeChallenge✦Aviation being international, a lot of transactions are done in foreign

currency. ✦Aircraft acquisition, purchase of spare parts, maintenance and training

are all paid for in foreign currency. ✦Carriers (especially domestic) sell their tickets in Naira and have to

pay for the services enumerated above in forex. Solution✦The Ministry is working with CBN, Ministry of Budget and National

Planning and Ministry of Finance to include airlines in priority list of foreign exchange allocation.

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iv. Waiver on Aircraft and Spares (Sustainability)✦Currently the Federal government has approved waivers on duty on

importation of aircrafts and spare parts which has contributed immensely to the survival of airlines.

✦Government is working towards sustaining the waiver for continued growth.

.… Other Challenges in the Aviation Sector

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v. Cost of Aviation FuelProblem✦Aviation Fuel constitute substantial operational cost of the airline. ✦Jet A1 is currently 100% imported and this makes it expensive and it’s supply

inconsistent. Solution✦Arrangements have reached an advance stage to commence the production of

Aviation Fuel (jet A1) in Nigeria in order to bring down the cost and regularize supply.

.… Other Challenges in the Aviation Sector

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.… Other Challenges in the Aviation Sector

vi. Unmanned Aerial Vehicle (UAV)a. Unmanned Aerial Vehicle (Drone) is a recent phenomenon that is fast emerging but yet to

have any regulatory framework. b. The ministry is in the process of developing a policy on the use of these vehicles.

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4. May to May

1. ICAO Security audit of Nigeria (passed with a mark of 96%)2. Nigeria has passed ICAO Universal Safety Oversight Audit of Nigeria. 3. Bringing Services closer to users by way of establishing and empowering

regional offices of NCAA.4. Publication of PBN Charts for all the airports in Nigeria5. Successful implementation of direct routing within the Nigerian airspace for

shorter distances, fuel efficiency and reduced carbon emission6. Automation of Tower Operation at MAKIA Kano}7. Provision of bomb containment vessel @ MAKIA & PH.C.8. Installation of Solar Air Field Lighting at 10 airports- Akure, PortHarcourt,

Sokoto, Yola, Kaduna, Minna, Enugu, Maiduguri, Jos, and Ibadan9. Rehabilitation and Furnishing of the Emergency Operating Center - Abuja

& Lagos airports 

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….May to May

10. Rehabilitation and Furnishing of the Airport Rescue and Fire Fighting Services bay at MMA and Domestic Terminal 1 Lagos.11. NiMet successfully went through the Quality Management Systems (QMS) Audit and retained its ISO 9001:2008 certification for the Aeronautical Meteorological Services provided to airlines.12. Completed the first cycle of annual Competency Assessment Test of all aeronautical forecasters and weather observers at four international airports as prescribed by ICAO. 13. NiMet successfully presented the 2016 Seasonal Rainfall Prediction (SRP) focusing on the theme: The Impacts of Weather Variability and Climate Change on Transportation Infrastructure and Agriculture in Nigeria”.

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14. Achieved designation as ICAO Regional Training Center of Excellence, 15. Two Global Awards with the highest number of Instructors with ICAO Training Instructors Course (TIC) Certificate16. The Highest number of ICAO courses run by any ATO

….May to May

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World map showing Nigeria as a potential hub

5. Conclusion

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Cooperation & Support▪ Public and private sectors have joint responsibility to develop the

sector;▪ All Stakeholders must ensure that they live up to their

responsibilities.▪ The sector can become profitable, self-sustaining and beneficial to

all stake holders;▪ The sector will have an Aviation Master Plan, which will be

presented for inclusion in the National Integrated Infrastructure Master Plan NIIMP

▪ Review of Civil Aviation Act 2006.▪ We invite you all to come on-board to move the sector forward

THANK YOU

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