How Covid-19 changes the face of Nigerian Aviation sector

Chinazor Megbolu

To say that the aviation sector was among the hardest hit by the rampaging Covid-19 pandemic is an understatement.

The sector, like others the world over, encountered its own negative angle, which affected global economies. No thanks to the incursion of the dreaded virus into Nigeria.

Twice, the Federal Government of Nigeria towards checkmating or curtailing the spread, declared total lockdown throughout the federation.

The lockdown led to job and revenue generation losses in both the public and private businesses in the aviation sector.

Aside essential goods and services, import and export trade during the lockdown era ceased.

We can go on and on.

In August 2020, the government eased lockdown so as to enable local airlines resume operations and in early September 2020, international flights also resumed.

Impact of Covid-19 on the aviation Industry

A research study discovered that the pandemic threw the entire global economy into trouble politically and socially.

The nation’s economy especially the aviation sector in particular, has been in a serious crisis as a result of the pandemic.

Some of the negative impacts of the pandemic on the nation aviation industry led to the closure of airports, indicating that flights would not take place until lockdown was eased.

The negative impact also led to increase in the industry debt profile, negative effects on tourism, increased competitive pricing and massive loss of job opportunities.

With the aforementioned, it shows it will definitely take sometime before the sector recovers from the devastating effects of the scourge.

Again, the turnaround time for local and international travels increased as aircraft will be needed to sanitise each time the planes land in furtherance of maintaining safety protocols to forestall spread.

Experts Opinions

Recently, the Institute of Directors (IoD), held a webinar with the theme, “Impact of Covid-19 on Aviation Sector: The Way forward”. According to the association, the pandemic would birth “a new normal” in the aviation sector.

The experts agreed that the new normal would be challenging but must be adhered to if the industry must survive the post pandemic.

The Managing Director, Aero Contractors Airline, Captain Aso Sanusi, noted that travellers must trust that boarding a plane was safe and that they would be able to enter the destination country.

He also opined that the most immediate and perhaps most visible change the industry would witness is social distancing or touchless travel.

According to him;

“shortly before the total lockdown, we had implemented the social distancing policy and that took a lot of time. We witnessed a lot of delays because we had to ensure passengers keep safe distances at the check-in point in order to curb the spread of the virus. But physical distance policy in the aircraft will not be possible. That will not happen.

“Passengers will have to be fit to travel, as the Yellow cards will be substituted for Covid-19 card. Passengers must arrive earlier than they used to at the airport and definitely expect more delay. The old normal turn around for local will increase from 30 minutes to over 1 hour (new normal) because aircraft will be sanitized every time the plane lands”.

Sanusi added that there would also be panic at the airport or in an aircraft if certain things happened.

“For instance, if anyone sneezed, others would panic. We will have to work hard to psychologically educate the passengers that the aircraft is the safest place to be,” he said.

Moreover, the Country Manager, Nigeria & West Africa, Qatar Airways, Mr. Kennedy Chirchir, also agreed that the new normal of the industry would mean a total paradigm shift.

He stated that the development would affect airline preparations, check-in preparations together with how agencies interacted with customers and airlines.

“We are moving to the digital space where physical interaction would be reduced drastically. Most of the operations will be on a digital platform. There will be more requirements in terms of the turnaround of aircraft.

“Before now, it takes about one hour for aircraft to turnaround but now it may take as long as two or three hours because there would be stricter checks. These will happen but will not stop people from travelling,” Chirchir said.

The Managing Director, BTM Travels Limited, Ms. Lola Adefope, explained that the adoption of technology would be looked into, insisting that it was important for operators and regulatory authorities to ensure that right policies and processes were in place to drive the technology, else, the nation would be placing the cart before the horse.

According to her; “what we need to do is to implement a proper education process and platform. That is to ensure people understand the risk of travel and the safety measures in place with the technology to support the process. The technology will push notifications to people directly.

“We are going to see a move to much smaller groups when it comes to actual leisure travel. Leisure travel won’t develop at the international scene immediately but we have to develop domestic tourism. We must put in place policies and processes before we open our borders for intercontinental or international tourism.

“The new products that will be sold in the new normal are health, safety and compliance and not comfort and leisure that was the focus in pre-Covid-19,” she added.

On his part, the Executive Chairman, Phillips Consulting, Dr. Foluso Phillips, posited that his expectation is for the new normal to birth new digital skills that would grow the aviation industry.

He hinted that the development would lead to job losses, because some people’s services would no longer be required with the advent of technology.

“It is obvious that the Federal and State Governments are saddled with bigger responsibilities of public safety, decay in education sector and Nigerians should expect them to be fully involved in implementing the desired turnaround needed in the sector.

“We need to privatise airports and have extremely sophisticated airports. There is no magic silver bullet, we have to try and engage the people and restore their confidence in the sector. These are the real things we must face.

“Let us lessen the burdens of the government. That for me is the new norm. How can we bring confidence to people? People should be able to say, ‘I want to go on vacation, as I now have confidence in the system,” Philips said.

Moreover, the Covid-19 pandemic has impacted every sector of human endeavour and has greatly affected the activities of the aviation sector.

These were the thoughts of Mr. Nnamdi Oraguru, Mr. Ugochukwu Nwaokike and Ms. Sharon Juwah all of Punuka Attorneys and Solicitors.

According to their July 17, 2020 research tagged; ‘Nigeria: Embracing Post-Pandemic Realities in the Aviation sector’, they noted that the efforts by many countries of the world to curtail the importation and community spread of the virus led to closure of borders and introduction of social distancing guidelines respectively.

“The closure of borders and restriction of movements led to major disruptions in the aviation industry as majority of airlines were grounded. The crippling effect of the lockdown resulted in huge loss in revenue suffered by the airlines and effort to cut cost, led to many downsizing efforts across board.

“This article seeks to analyse the effects of the pandemic on the industry and how it has impacted on the performance of contractual obligations in the aviation sector,” they said.

The trio maintained that the aviation sector and the effects of the pandemic, global trade is fostered through the aviation sector due to its swift delivery and large capacity as wide variety of cargo can be transported in one trip.

They also stated that the closure of borders, lockdown, movement restrictions and the travel bans placed by governments crippled the operations of the aviation sector.

While taking a cursory look at the impact of Covid-19 on the aviation sector in Nigeria, they revealed the disruption of operations and the cessation of revenue generation, stating that the travel ban has translated into the shutdown of major airports in Nigeria such as the Murtala Muhammed International Airport, Lagos, the Nnamdi Azikiwe International Airport, Abuja, as well as the closure of Malam Aminu Kano International Airport, Kano, Akanu Ibiam International Airport, Enugu, and Port Harcourt International Airport, Omagwa1 .

They also added that all local airports are closed with only essential flights allowed as well as that the sector was completely grounded as no flight operated, leading to the disappearance of major source of income in the sector.

“Similarly, revenue from non-aeronautical activities has dwindled as they were hinged on patronage of air travel. On the global scale, the impact of the pandemic on the aviation sector cannot be over emphasized.

“International flights are majorly grounded while only humanitarian and essential flights are allowed. The prevalence of the pandemic has also impacted on the revenue of the sector and induced breach of contractual obligations amongst the key players in the sector.

“Considering the enormity of the impact of the pandemic on the aviation sector, government intervention seems inevitable to rescue the sector from going insolvent,” they stated.

Meanwhile, they noted the pandemic cost domestic carriers almost N400 billion resulting in over 250,000 staff being laid off as well as that the major concerns regarding the grounding of over 120 aircrafts is the high cost of servicing for equipment and planes that have been abandoned for months.

This means that upon reopening of the airports, money must be sourced to handle servicing of planes before flights can go on as scheduled. For this reason, the aviation sector is heavily dependent on a government bailout,” they said.

International Intervention

The International Air Transport Association (IATA) had called on the Nigerian Government to intervene for aviation-specific financial relief measures towards addressing the severe impact of the Covid-19 crisis on the air transport sector.

IATA hinted recently that Air transport has grounded to a halt in efforts to stop the spread of Covid-19.

The international organisation maintained that along with the direct impact on jobs and companies in aviation, related industries like tourism, hospitality and trade have been hit hard by the lockdown declaration, adding that these above-mentioned subsectors do play an essential role in creating jobs and boosting economies.

IATA averred that before the crisis, aviation sector contributed $1.7 billion to Nigeria’s Gross Domestic Product (GDP) and also supported 241,000 jobs.

In its estimation, it claimed the Covid-19 crisis puts 124,000 Nigerian jobs at risk and some $900 million of the country’s GDP as well.

Although, the federal government introduced broad economic relief packages to mitigate the devastation caused by Covid-19, IATA charged the government to implement specific financial relief measures for aviation in order to ensure the sector will be capable of driving the recovery.

“Nigeria has announced general relief measures for sectors affected by Covid-19, but not specifically for aviation.

According to the Regional Vice President for Africa and the Middle East; Mr. Muhammad Albakri, IATA; “given the importance of air transport for Nigeria’s economy and connectivity, the government must not let aviation fail. The industry faces a liquidity crisis.

“Without a viable aviation sector , Nigeria’s eventual recovery from Covid-19 will be longer and even more painful. Aviation-specific financial relief measures are urgently needed as a matter of survival”.

He stressed that the government should consider implementing some or all of the following relief measures in form of direct financial support to passenger and cargo carriers loans, loan guarantees and support for the corporate bond market by the Government or Central Bank of Nigeria (CBN), tax relief – rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020.

Others includes; financial relief on airport and Air Traffic Control (ATC) charges and taxes reduction, waiver or deferral of government-imposed taxes and fees and foreign exchange availability.

“As the aviation industry looks to restart, it is important that key regional players like Nigeria are ready and able. Aviation is a strategic pillar for social and economic development.

“Supporting aviation now will mean that Nigeria’s economy can pick up from where it stopped and drive forward,” Albakri said.

The Federal Government Appeal

Recently, the federal government has appealed for social dialogue between the employers and the employees in the sector in a bid to prevent loss of jobs.

The Minister of Labour and Employment, Dr. Chris Ngige in a statement, signed by the Deputy Director, Press and Public Relations in the ministry, Mr. Charles Akpan, in Abuja during a reconciliatory meeting with airline operators and the trade unions in the aviation industry to discuss contentious issues, especially pay cut and laying off of workers, made the appeal.

Ngige appealed to them to collaborate with the federal government to endeavour there were no job losses in the sector.
He explained that the cardinal principle of the federal government is to prevent any kind of job losses.

“The government on its part will honour its obligation to the industry by providing palliatives in the form of tax reduction, tax exemption, and elimination of Customs duties on aircraft spares and logistics.

“The Central Bank of Nigeria will also provide (a) stimulus package to encourage the operators in the industry,” Ngige said.

He, however, lauded the efforts of the airline operators, like; Air Peace and Bristow Helicopters, which showed concerns and kept on paying the salaries and allowances of their staff during the Covid-19 epidemic era.

Ngige appealed to the operators to allow their employees exercise their right to unionisation as Section 40 of Nigerian Constitution guaranteed that.

According to him; “we encourage the airline operators to allow members of staff who desire to go into unions to do so, as belonging to unions is a voluntary thing.

“Obstructing them from doing so, is to curtail their fundamental rights as enshrined in our Constitution”.

He further explained that the management of Air Peace, the Minister of Aviation and the trade unions had already signed a memorandum of understanding that Air Peace would dialogue with their workers on the re-absorption of some of the sacked pilots and engineers.

Ngige buttressed that those who had already got employment elsewhere would be allowed to go peacefully with their entitlements.

He, however, used the opportunity to urge the unions in Turkish Airlines to forward, in writing, their complaints about victimisation of officers in the unions to the Minister of Aviation, and copy the Federal Ministry of Labour and Employment.

He also stated that on Bristow Helicopters, 90 – 95 per cent of the issues had already been solved through social dialoguing.

“We understand the plight of the employers, being that the volume of work in that organisation has dwindled, from 50 aircraft business to an all-time low of 12 aircraft.

“We appeal to both management and workers to dialogue with human face in order to save jobs,” he said.

Ngige maintained that the thrust of the social dialogues was to save jobs, so that even the management could also consider reduction in the number of people slated for redundancy.

He also noted that even if redundancy must occur, it should be done under the ambit of Nigerian law on redundancy.

On the unilateral pay cut by Arik Air, as well as the disagreement on terminal benefits for workers, Ngige mandated the management of the airline to engage the employees on social dialogue and come up with a mutually agreed remunerations.