AMCON Boss Blames Poor Governance For Nigeria’s Aviation Industry Woes

AMCON Boss Blames Poor Governance For Nigeria’s Aviation Industry Woes


Post Views: 488 The Managing Director/Chief Executive, Asset Management Corporation of Nigeria (AMCON), Ahmed Lawan Kuru, on Tuesday, in Lagos, blamed...

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The Managing Director/Chief Executive, Asset Management Corporation of Nigeria (AMCON), Ahmed Lawan Kuru, on Tuesday, in Lagos, blamed poor corporate governance in the management for the short lifespan of airlines in the country.
Kuru, who was Guest Speaker at the third edition of the Nigeria Travels Mart Colloquium organised by the Nigeria a Travel Market (NTM), noted the need for proper regulation of the industry to ensure growth and stability of the all important industry.
The AMCON boss whose presentation was themed “Corporate Governance and Airline Industry development in Nigeria,” while highlighting major challenges of airlines and airports in the country, blamed the incessant collapse of operators in Nigeria on lack of corporate governance and adequate regulatory oversight in the management of aviation business in the country.
He also urged the Federal Government to concession airports across the country as government has no business managing airports, stressing that the time has come for government, the regulatory agencies and practitioners to realise the important role of aviation in national development.
According to Kuru, “the aviation sector is a catalyst for the economic development of nations. It is a wheel that drives economic activities. It facilitates trade, tourism, boosts productivity in the economy, improves efficiency in the supply chain, it is an enabler for investments and can spur innovation. Critically, it is a source of quality employment. For these reasons, it is a strategic sector deserving of a careful plot to greatness if Nigeria is to occupy its rightful place in the comity of nations.”
Aviation regulatory bodies like the Nigeria Civil Aviation Authority (NCAA), he added, must develop the courage to insist that corporate governance is adhered to, lamenting that the industry is riddled with thousands of failed airline businesses due to lack of corporate governance.
He decried a situation where the boards of most aviation industry operators are peopled by family members with no competence to oversee such fragile and sensitive business as aviation.
Kuru listed other challenges in the industry to include the lavish lifestyles of airline owners, at the detriment of adequately paying pilots and engineers; even as airline owners and staff have become contractors. As a result, he said, they compromise standards in provision of services, wondering why the Chairman of an airline arrogates to himself the power to buy an aircraft worth several billions of Naira without due diligence; among others.
This, he said, is responsible for “most cases overpricing services… Airline staff become flight ticket agents in most cases, creating artificial ‘full capacity’ situations where when passengers eventually board, a lot of seats are empty.”
According to Kuru, in such airlines without structure, staff loyalty is only to the owner, rather than to the company, following which proper attention is not paid to suppliers of parts, lessors, line maintenance providers, while fuel suppliers, are not paid as at when due. Once the airline operates this type of structure, he warned that vendors will naturally withdraw all forms of business support, while the airlines tether to the point of failure.
Specifically, he called on the NCAA to step up regulations as has been done in the banking sector.
Kuru said is important, because in his words: “The aviation industry is as important as the health industry because it deals with the lives of travellers. It requires more regulation than even the banking industry. It is only in Nigeria that an airline can abandon you at the airport for more than five hours without any recourse. Indeed, there are consequences for frequent cancellations, however I cannot recall any airline punished in the recent past.”