ARISE Business Analyst, Chika Mbonu, says the aviation crisis that disrupted flight operations could have been prevented through better management and earlier intervention by stakeholders, stressing that disputes affecting critical national infrastructure can have far-reaching economic consequences.
Speaking during an interview with ARISE NEWS on Wednesday, Mbonu said the impact of the aviation union strike went beyond airlines and passengers, noting that disruptions to the sector affect businesses, airports, hotels and the wider economy.
On the need for better management of disputes in the aviation sector, Mbonu said:
“The aviation crisis that we had yesterday could have been prevented. It could have been prevented. And I say, I stand here and say that it could have been prevented with better management.”
Mbonu said aviation contributes significantly to Nigeria’s economy through employment, GDP and its linkages with other businesses and sectors.
“I estimate that directly and indirectly, aviation contributes about 270,000 jobs to Nigeria, about 2.5 billion dollars to our GDP, and direct employment is about 40,000 employees.”
He said the economic impact of the disruption extends beyond the direct revenue losses suffered by airlines, affecting airports, businesses, hotels and passengers.
“It’s not just about the quantified amount of Naira loss. It’s also about the attendant linkages to this issue.”
Mbonu identified revenue losses for airlines and airports as some of the major economic consequences of disruptions to flight operations.
“Airlines lose revenue when operations are disrupted, while airports also lose income from retail businesses, parking, lounges and handling services.”
He added that passengers and businesses also suffer from missed connections, meetings, appointments and lost productive hours.
“Airlines lost revenue, airports lost retail businesses, parking, lounges, handling and transportation of passengers, hotels, missed connections, meetings and appointments, businesses and executives and employees losing productive hours, and Nigeria losing reputational damage and reduced confidence in infrastructure.”
Mbonu also said the scale of the losses could become significant when the financial impact on thousands of passengers affected by the disruptions is taken into account.
“The impact becomes significant when you consider the financial losses suffered by thousands of disrupted passengers.”
He urged all stakeholders to resolve disputes before they escalate into situations capable of paralysing critical services and disrupting economic activity.
“The cost is enormous and we believe that everybody, all the stakeholders involved, must talk to the economy and handle this issue like this before the climax and literally shutting off the airports and preventing passengers from travelling.”
On the issues surrounding the strike, Mbonu said the dispute involved the alleged non-remittance of a statutory five per cent ticket sales charge and concerns over the right of airline employees to unionise.
“The dispute was about the five per cent ticket sales charge and the right of airline employees to unionise.”
On the statutory charge, Mbonu said airlines serve as collection agents for government funds and are expected to remit the money collected.
“If you start with the passenger’s charge, it is regulatory money, it is government money and the airlines are the agents for collecting it. And so the expectation is that when they collect it, they should remit it to the government.”
He questioned how the alleged debt could have accumulated over several years without proper reconciliation or intervention.
“How did they allow that figure to move from 1 billion, to 2 billion, to 3 billion, to 5 billion, to 10 billion, to 15 billion, without reconciliation and so on and so forth?”
Mbonu acknowledged workers’ right to unionise but said disputes should be resolved through established legal and regulatory mechanisms.
“Workers are entitled to their right to unionise and it’s important that they’re allowed to do so.”
He, however, cautioned that having a legitimate grievance does not make every method of pursuing it legitimate.
“My one argument is illegitimate grievance does not automatically make every method of pursuing that grievance legitimate.”
Mbonu said labour laws, courts, regulators, negotiations and arbitration processes should be used to resolve disputes without paralysing the aviation sector.
“There are labour laws in the country, courts, regulators, negotiation and arbitration processes that can be used to make sure that this issue does not escalate to the level it is going now. So we can protect workers without paralysing passengers.”
He also highlighted the financial pressures facing Nigerian airlines, noting that several major operating costs are linked to foreign currency, including aircraft maintenance, spare parts and aviation fuel.
“The issues of everything that concerns aviation is in dollars. The maintenance is in dollars. The spare parts are in dollars. The fuel is even priced in dollars. Aviation fuel is priced in dollars. Literally everything that we have in aviation is priced in dollars.”
Mbonu identified weak consumer purchasing power and slow growth in domestic passenger traffic as additional challenges facing airlines.
“Consumer purchasing power is also low. Even passenger traffic, based on some reports I saw before, domestic passenger traffic is not really increasing the way it’s supposed to increase. So, the Nigerian airlines are struggling.”
He said an improvement in the broader economy could increase passenger numbers, potentially reduce ticket prices and make airline operations more affordable.
“I have a feeling if the economy becomes better, maybe more people will travel, and maybe ticket prices will drop, and the airline operations will be cheaper.”
Mbonu said the aviation crisis should serve as a lesson for stakeholders on the importance of early intervention and effective dispute management, particularly when disagreements involve critical national infrastructure.
“Disputes involving critical national infrastructure require early intervention and effective management to prevent wider economic consequences.”
In conclusion, he stressed that resolving disputes before they escalate would help protect workers’ rights while preventing disruptions that impose wider economic costs on passengers, businesses and the Nigerian economy.
“So we can protect workers without paralysing passengers.”
Goodness Anunobi
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