Our refineries can address aviation fuel problems – Med-View boss
In this interview, the Managing Director of Med-View Airline, Alhaji Muneer Bankole, talks about vital reforms needed in the country’s aviation industry and other issues:
Med-View is the only airline currently listed on the Nigerian Stock Exchange, how is its performance?
We have been in the market for about two years now. We went to the market with N1.50k; we have been going between N1.80k and N2; so it has been good. For the shareholders, in the last two years, we have posted profit; we posted significant profit in 2018 and in the first two years, we gave out about 30 kobo to the shareholders at about N500m on two occasions. And last year, because of the development and return of the aircraft for international operations, we had a downturn and recorded a loss.
The shareholders are all happy, we have been sincere, because when you are in the stock market, there is no hiding place and this gives confidence. But so far, so good. We are improving gradually to bring back all the aircraft to operation and by the grace of God ,we hope to get back soon.
What impact has your listing had on your operations?
It gives a kind of comfort that there are people behind you, that have interest in that business. It is no more your business, there are shareholders and stakeholders and everybody is interested. This makes you to be on your feet. Corporate governance is there, so you can’t just do anything, you must be transparent in totality; you can’t do anything less than what is expected and that makes a difference between you and other entities.
There are speculations that Med-View has suspended its operations. What is the true situation?
We don’t know where the information came from but we have given our position which is the truth. If we suspend our operations, the regulator will speak about it, because there is a section in the Nigerian Civil Aviation Regulations that gives us the right to say ‘in 30 days, because of certain things we want to suspend our operations,’ but there was no communication to that effect.
As far as our records are concerned, we have four aircraft on the ground, which are Med-View aircraft. One aircraft is in Estonia, one is with Aero, one is in Abuja where we are fixing an engine and will return to service in a couple of days. Another one is for international flight which is supposed to be for the hajj which we are closing up with our partner in Ethiopia.
As an operator, what are your expectations from the minister of aviation who has been returned for a second tenure?
In the first leg, he was a minister of state under a minister and under the ministry of aviation, which implied that he had two bus stops before getting to resolution. He would report to the permanent secretary of the transport to the minister and the minister will report to the president. But the good news now is that he has been given a substantive ministry which is aviation; that is one stop, one shop.
From his background, he has had a stint in aviation, he knows about flying and the industry. He had been a serving senator which makes him a politician and a technocrat, so he knows the game better than those of us on one side.
He has a listening ear, we met him to welcome him and had a good talk with him on some of the things we know he has to put to the ears of the government and some of the areas that need to be looked into. We talked about fuel, whether this will be a better way to use one of the refineries, we have Warri, Kaduna and Port Harcourt. One of these could be used to reduce foreign exchange on fuel.
Second, he should buy into international application for repair and overhaul to reduce the problem of taking our aircraft out. One of those we are promoting now is Aero, we have been taking our aircraft to Aero and some of our colleagues have been doing that too, it reduces our exposure to foreign exchange which I think he can look into on a larger scale, so that out forex will remain back home.
Third, is the issue of fuel hydrant, all these issues of allowing aircraft to wait for traffic to subside before trucks bring fuel, we have passed that stage. In the past, in this same country we had that on the ramp, it reduces delay, contamination and pressure. I heard the airport in Asaba will be a litmus test, let’s pray it comes up fine and then we make a change at the other airports to develop the industry.
What major reforms would you like to see in the industry?
The minister should look into all the agencies. We don’t have to go on with the same stories; we need to go deep. Where there needs to be a surgical operation, it should be carried out; there are a lot of reforms that have to be carried out. We are bound by International Civil Aviation Organisation regulations and International Air Transport Association and even internally, we need a lot of orientation and awareness. A lot of things need to be reviewed.
What is your take on open skies for Africa?
We are backward; they have it in European Union. There were 26 of them, they started an open sky and set up two to three bodies, one to leverage payment overfly, they call them Euro Control; the other is called European Union Aviation Safety Agency to leverage on technicality, viability and safety.
Why don’t we have something like that? It is not a crime. America has it; Asia has it. The whole essence is to come together; we are about 54 nations, if I am right, just like in West Africa, we can call it open skies West Africa. Nothing stops me from going to Togo. We are brothers, if you look at the geographical location we are all on the coastline up to Dakar, Senegal.
We can do so many things not only in aviation; we can work on rail too. It is a welcome idea but in all we do, we must have sincerity not that when one person leaves and another comes in there will be story.
Recently you had a face-off with the National Hajj Commission of Nigeria over breach of hajj contract and you petitioned the Federal Government. Has there been any reaction?
Part of our business is to know who gives you business; the business is from a government-regulated body and we must respect it. So, there was a contract between Med-View and NAHCON and there were conditions in Article 4 and 5 that specified the conditions. It was signed on May 20, 2019 and one of the requirements is that we must provide performance bond from the bank.
The initial contract was about $8.9m, which could be increased or decreased. On that note, we collected Advance Payment Guarantee from the bank, the next thing was to pay for part of the contract but NAHCON didn’t pay the money from May 20; no letter of appeal or anything until July 15 when the hajj had commenced.
Our argument is based on two values: hope it is not deliberate because you are supposed to pay $4.4m but on July 15, you paid $2.4 and the argument is, why? We are only three approved by Mr President: Med-View, Max Air and Flynas. I discussed with the two partners being an open-minded person and we had a kind of agreement, we are only three and there must be a relationship, many of which had been done in the past.
So because we are still working on our aircraft we requested for Air Peace as a second option or as a backup after an approval with the Saudi government. It was a clean intention, we wrote to NAHCON; instead of talking to Flynas, it is better to look inwards and talk to our own people, which is Max Air. That was the beginning of the problem. The chairman of NAHCON called to ask that I go ahead with the Saudi partner which I declined; I told him Max Air is our own, why go that far to look for a partner; that was the beginning of the problem.
If you are sincere as a regulator representing a country, which one will benefit you more? We call it economic sabotage, there is no structure for these people in Nigeria’s economy, they are not providing employment, they just come, take and go. And you continue to increase their quota; I will not be a party to it.
Deliberately, they refused to pay us and when they wanted to, they approved $2.4m out of $4.8m, we denounced it and realised that they sent additional $1.7m which they withdrew from CBN. Why did they go there to withdraw the money? We suspected foul play; while we didn’t have to wait for him, we went ahead to talk to Max Air, which obliged us and started airlifting our pilgrims from 17 states.
When we asked for the money, they started playing around, when we went to Saudi and demanded that they pay the authority they said they could only pay through their local cheque in Saudi Arabia. We secured slot for 40 flights and signed agreement with the Saudi Government for 12, 800 pilgrims then we paid $1.5m; last year we had paid $1.8 for landing, you can pay at installments, it is allowed in the industry.
We met all the requirements but they starved us of funds deliberately which is a fundamental breach. A meeting was called on July 15 in their office and we were asked what we want, we said they should pay our money because it had graduated from 50 per cent to 30 and to 10 per cent. The contract said first 50 per cent meaning signing the contract; 35 per cent on positioning; 10 in preparing for return leg and 5 on completion. Why didn’t they follow it, they staggered the payment as if it is a private business.
So, we referred the matter to our legal department and they wrote to them that there has been a fundamental breach which is where we are today. We have conveyed the same message to the office of the Vice President, Secretary to the Federal Government, First Bank of Nigeria and to NAHCON. All the letters have been acknowledged. The presidency is in the know and we cannot go outside that scope for now.
Has there been any interaction between Med-View and NAHCON since then?
They have been writing and we have been replying but they have stopped writing for now. In summary, the total percentage they have paid will be accumulated to 50 or 51 but not as per the contract.
The total number of pilgrims airlifted from Med-View, on outbound with the support of our partners, Max Air, is 4,700; they are also back.
There were situations where we went into Ekiti and Ondo and pilgirms were frustrated for four days. The governors had to ask why pilgrims had to pay when the state government had already paid to NAHCON not to the carrier and on return NAHCON pays the airline based on the contract. So, on whose contract are they deploying another airline? The situation affected Ogun pilgrims and they suffered for four days.
What are your expectations from the Federal Government as resolution to the issue?
There is a contract, and there must be a resolution if they want to pay the money as agreed they are free to go but if they decide on arbitration, it is up to them.
When are you looking at returning to international flights?
Very soon. As soon as our aircraft return to service.
SOURCE: PUNCH