State governments running airlines must have exit plans – Capt. Sanusi

Capt. Ado Sanusi is a renowned aviator and Chief Executive Officer of Aero Contractors Airline, Nigeria’s oldest carrier. In this interview with our correspondent, he bares his mind on the state of the industry and why the aviation industry still lags behind.   What is your assessment of the industry in 2025 and the outlook […]

Capt. Ado Sanusi is a renowned aviator and Chief Executive Officer of Aero Contractors Airline, Nigeria’s oldest carrier. In this interview with our correspondent, he bares his mind on the state of the industry and why the aviation industry still lags behind.

 

What is your assessment of the industry in 2025 and the outlook for the Year 2026?

Last year, I don’t think the industry witnessed any significant growth regarding airlines, regarding infrastructure, regarding other meaningful investors coming into the industry. Of course there have been some improvements, we have to identify those improvements and there have been some achievements in 2025, we have to acknowledge those. But the truth of the matter is that we are not where we are supposed to be as an industry and you have a roadmap for the aviation industry and if you look at the roadmap, we have not gone far, following that roadmap. That calls for concerns as to what is the issue, what is hindering us from achieving our potentials.

Aviation still remains an infant industry in Nigeria. Aviation, despite the fact that it is extremely important in economic growth, still lags in Nigeria and in Africa in general.

You can say in 2025, many state governments built an airport, they started an airline but as an industry player, I looked at it as a two-way thing. It is an improvement in the capacity. Is it sustainable? That is one thing I think we have to look at. If it is done haphazardly, will it bring the necessary growth in the aviation industry? Not necessarily. State governments can harmonise their positions into regional position but there must be an exit plan. As a governor of a state, you can’t be boasting that in your eight-year term, you started an airline, I don’t think that is a major achievement because as you are leaving another governor may not have that vision of maintaining the airline because state governments are not designed to run an airline.

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When I looked at the state governments and I see that they are starting airlines and I look at their schools, I look at their healthcare system, I look at other fundamental aspects for their citizens, I asked whether it’s a misplaced priority. But as an aviator, it is an added capacity. I believe that state governments should buy if they have excess liquidity and they have taken care of healthcare, education, infrastructure and basic things of their states and they still have excess liquidity, they can buy airplanes and lease to responsible airlines to run them for them. It is a stream of income. The state governments can put their name on their airplanes, nobody is saying they cannot. The governor can of course use it for his political achievement but he should make sure those assets are generating revenue for the state government.

So despite the fact that I am a player in the aviation industry, despite the fact that I believe increasing capacity will definitely foster growth in the aviation industry but I still believe doing it right is the best way to move forward. Sustainability is the best way and is the key to a successful industry. So airlines that are coming up and being run by the state governments must have an exit strategy because state governments cannot run airlines successfully.

 

You talked about reforms that the government should be looking into. What are those reforms you think would actually increase the number in terms of passenger statistics especially domestic passengers that are reducing?

Naturally passengers drop around this time of the year in aviation cycle. We have been having reforms in the aviation industry but I think a genuine reform is what we need. We need to review and look at the aviation policies that foster growth, sustainable growth of the airline, a reform that will look at the independence of the regulator and financial independence of the service providers-  FAAN, NAMA, NiMet; reforms that will look at easing levies and taxes imposed on the airlines; a reform that will look at the competitiveness of the service providers like handling companies; a reform that will look at incentives that would bring in newer airplanes into the company; a reform that will look at the basic financing of acquisition of assets including aircraft engines and auxiliary power units (APUs);  a reform that would look at catering; a reform that would look at regulating the fuel marketing industry; a reform that will look at the transparent pricing of Jet A1 and the list will go on and on. These are genuine reforms that must be looked at; genuine reforms that would look at the new tax regime and identify those taxes that might hinder the growth of airlines, parastatals, service providers and other industry players. Those are genuine reforms.

 

One of the reforms carried out last year is the domestication of the Cape Town Convention and the implementation of the Irrevocable De-Registration and Export Request Authorisation (IDERA) by the federal government, are we seeing the impact of this, has this translated into having more aircraft?

The Cape Town Convention was domesticated a long time ago. IDERA has been in place a long time ago. The achievement of the Honourable Minister of Aviation and Aerospace Development was to ensure that we scored high in implementing what was domesticated at the Working Group. We scored over 70 and that is good theoretically. Yes we have scored high but does that translate into getting more aircraft? From what I am hearing, we have one aircraft that came in as a dry lease to one of the airlines. But it is not going to be easy because operators must prove to the leasing world that Nigeria has changed and in Nigeria if you bring your assets you can move them out easily but this does not come in one day or in one year. It comes based on a long term commitment to respecting the rule of law and the contract terms by both operators and the leasing company. IDERA has been there, it is just the score of the working group that has changed in the past couple of years. For me, I think yes it is an achievement but I don’t think it will translate into us getting a brand new aircraft. What translates into getting a brand new aircraft is if you give me good financing. If you give me good financing, I can go and get a new aircraft. But in as much as I am going to commercial banks to get financing of about 20 to 30 % interest to finance an aircraft or to bring an aircraft while some airlines are getting it at five, six per cent. So I am competing already at a very disadvantaged position and that of course would stunt the growth of any industry, not only aviation.

 

You spoke on charges and levies which have been an issue in the industry in recent times, what more can we do on these levies and taxes?

The truth of the matter is, in as much as the parastatals would rely solely on the airlines to fund their operations and with the type of operation the parastatals are operating, it is difficult for the airlines to fund their operation because the operation is not on cost-recovery. Sometimes back, the NCAA was declaring an operating surplus of millions meaning that they have charged us so much money that they made profit and they are returning it to the government and the industry is not growing. If the parastatals are returning N500m to the government while the industry is shrinking, I don’t think that is productive. I don’t think we should be applauding that. If the industry is growing and we are not remitting to the federal government, that is the time to applaud because it means we are bringing more people out of poverty because they are coming to work in the aviation industry.

 

As far as I am concerned no airline is saying he doesn’t want to pay taxes or he doesn’t want levies but let them be transparent. Let them be taxes that are internationally recognised. I don’t think we should pay value added tax on ticket sales after paying 5% ticket sale charge. There are two taxes on tickets already and I don’t think we should now start paying levies on items of safety oversight that I have paid 5% for. That doesn’t make sense to say, ‘pay 5% for safety oversight’ and then when you are going to do safety oversight of inspecting a simulator facility, I still have to pay for those things. These are parts of the five per cent ticket sale. That’s why I have been advocating that all aviation parastatals should be looked at on a cost-recovery basis as of now. Maybe in future they might be generating revenue for the federal government but we have an industry that is near comatose and then you are putting levies, taxes and still requiring that industry, the airlines that are hardly standing on their feet to fund the parastatals and when we fund these parastatals, they too are struggling because they have to improve their infrastructure, they have to improve the salaries and wages of their staff. So a genuine reform must be looked at to ensure the parastatals are financially independent and they provide a seamless service. Airlines pay charges based on international norms and practices and levies are transparently done in such a way that they are on cost-recovery basis because I see no reason why as of now the aviation industry should contribute to the federal government coffers. The contribution is economic growth because aviation is a catalyst to economic growth of the country.

 

The federal government has commenced the rehabilitation of the Murtala Muhammed International Airport (MMIA) even though there were divergent views about the desirability of spending N710bn, almost a trillion naira on the rehabilitation, what are your expectations as the project takes shape?

I believe for the federal government to spend close to a trillion, I believe it is a brand new terminal they are building and a modern terminal. That is my belief. I will be horribly disappointed if we don’t get that. But I strongly believe that it is going to be a brand new terminal, modern terminal with not only transit services but all the necessary things that we enjoy outside the country.

 

Including train linkage to the domestic terminal?

Yes including fingers that have capacity to provide electricity to the aircraft and air-condition to the aircraft like we see in Heathrow and other good airports. The money is a lot, it is more than $3bn. $3bn in any economy is a lot of money to build an airport.

 

Let’s talk about Aero Contractors MRO (Maintenance, Repair and Overhaul) facility which has been doing well. What are the plans for expansion and also the expansion of the operation of the airline?

The MRO is expanding, we are just concluding the renovation on the flooring and the height so that it can accommodate 737 NG and Max and Airbus A320. Yes we are confident that very soon we would be announcing the MRO has EASA approval to do line maintenance, that is what we are working on diligently. Our application should go in a couple of months and hopefully we should get it before the last quarter of this year. We are doing line maintenance for some foreign airlines and by the time we have EASA approval, we would do it for more airlines. We are also working diligently to improve our workshop, to increase our capabilities, before the end of this year, we want to have the capability of doing overhaul for the Auxiliary Power Units (APUs) on the aircraft, that is 737 classics. We are also looking at having the capability to do the landing gear, the tyres of the aircraft of the 737 classics…

In terms of the airline operations, we are very confident with what we have done. We have four airplanes and one helicopter. We believe before the year runs, we will get investors that would invest through AMCON divestment. We are confident that the future of the airline would be shaped with the investments that are coming.