Concessioning Remains Strategic to Airport Mgt, Says Kuru

Ugo Alio

As part of measures to drive growth in the aviation sector, the Managing Director, Asset Management Company of Nigeria (AMCON), Ahmed Kuru, has stated the need for the federal government to embark on concessioning as a key strategy to improve airport management in the country.

Kuru, who disclosed this in Lagos at the 2018 Nigeria Travel Market (NTM) Colloquium with the theme: ‘Corporate Governance and Airline Industry Development in Nigeria’ noted that internationally airport management is private sector driven.

He also stated that effective airport management doesn’t allow for 100 per cent government involvement, adding that concessioning would lead to growth in the sector and change the structure of the airports.

Kuru said due process should be adhered to in concessioning the airports and should be transparent and international best practices must also be adhered to.

The AMCON MD further stated that if regulators don’t adhere to strong corporate governance principles in the operation of the airlines, the sector may not move forward.

“Concessioning is very key in driving growth and it is essential for us if we want to change our airports. When people say they don’t like concessioning it is madness. What is important is that we must ensure due process in concessioning. But government has no business running airports. This is a private sector issue and we must encourage government to embark on concession. When the airports are concessioned it would drive investments such as hotels, shopping malls and others. We investors whether local or foreign, but essentially individuals with track record, who don’t need to re-invent the will when you bring them onboard,” he noted.

Continuing, Kuru added: “There should be cash flow for setting up Airlines must be professionally scrutinized to make business sense. The Aviation Industry operates on a low profit margin and a low profit margin requires prudence that can only come with good corporate governance. There should be provision of affordable sources of funding and access to foreign exchange. Scrutinize the ownership and source of funding of the prospective Investors to confirm fitness. Conduct routine and deep examination of the operations and books of the Airline to ensure compliance to set standards. Existing standards must be enforced and airlines penalized for non-compliance.”

He charged the NCAA on regulations, stating that they are either weak and that the NCAA, “lacks the courage to enforce compliance based on current standards or need more fine tuning to ensure effectiveness of the airline.”

Earlier in his remarks, the Chief Executive Officer, NTM, Simon Tumba, said corporate governance in most private enterprise in the country is weak, but the airline industry in Nigeria is worse.

He said the absence of strong corporate governance is a major contributory factor to the dwindling fortunes of the industry.

Tumba expressed confidence that the potential to have a very vibrant airline industry, stating that all that is required is to be consistent in policies, be more innovative and creative, with strong regards to corporate governance.