Ahmed Kuru, Managing Director, Asset Management Corporation of Nigeria (AMCON) on Tuesday called for the adoption of a Code of Corporate Governance for the Aviation industry.
Kuru also urged the Nigerian Civil Aviation Authority (NCAA) to enforce sound corporate governance systems on Nigerian carriers to ensure their sustainability.
He made the call on Tuesday at the 2018 Colloquium of the Nigeria Travels Mart (NTM) in Lagos.
The colloquium had the theme: “Corporate Governance and Airline Industry Development in Nigeria”.
The AMCON boss said that lack of regulations and good corporate governance were the main factors responsible for the failure of about 160 Nigerian airlines, including the defunct national carrier, Nigeria Airways.
According to him, the industry remains in the throes of airlines burdened with debts, under administration or in borderline of collapse.
“There are two major problems with the airlines in Nigeria; one being lack of an effective Board of Directors, thereby affecting internal policies and discipline, the other problem has to do with regulation.
“Given the ownership structure of most airlines in Nigeria, the board’s veritable check on management and excesses of airline owners who show very little patience for orderly and planned conduct of business, is practically absent.
“ A functional board is necessary for the effective operations of airlines with long term survival and profitability objectives.
“Individuals with independence, experience and expertise from relevant sectors of the economy are not identified and engaged,” Kuru said.
He said on the other hand, regulations were either weak and lack the courage to enforce compliance based on current standards, or need more fine-tuning to ensure effectiveness of the airline.
Kuru said: “The aviation industry is as important as the health industry because it deals with the lives of travellers. It requires more regulations 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.
“That is why I want to use this opportunity to appeal to the NCAA and other regulatory agencies in the aviation industry to show courage and ensure that sound corporate governance systems are enforced.
“A starting point can be the domestication and adoption of the draft Nigerian Code of Corporate Governance 2018.”
Also, Chris Amenechi, Vice-President, Pricing and Revenue Management, Copa Airlines, Panama, said Nigeria could become an aviation hub if the country addresses the infrastructure deficit in the sector.
He added that the NCAA should not be an economic regulator of airlines but should rather stick to the technical and safety aspects of the business.