Home Uncategorized Stakeholders hinge African aviation survivability on Good Corporate Governance Practice

Stakeholders hinge African aviation survivability on Good Corporate Governance Practice

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….say owner-manager encourages fraud detrimental to sector’s growth

….call for concerted efforts to address the problem

One of the recipients of the Changemakers award Dr. Felicia Agubata receiving her award from the organizer, Toni Ukachukwu

Aviation Minister, Heads of Civil Aviation Agencies and stakeholders have stressed the need to instill good corporate governance for the survival of the Aviation industry in Africa post covid.

This is just as they stated that, corporate governance which is a key determinant of the industry’s survival, growth and performance can be influenced.

Speaking at the physical and virtual Africa Leadership CEO’s and Aviators and Towers Awards, with the theme: Corporate Governance Structure: ‘A pathway to sustainability of African Aviation’, the Minister of Transport, Ethiopia, Dagmawit Mogues said with the kind of attention the industry was getting with the initiative by the African Union to integrate the continent with Single African Aviation Transport Market  (SAATM) and the  African  Continental  Free  Trade  Area  (AfCFTA), the industry must catch in on this to boost profitability and connectivity.

However, she stated that, for this to be achieved in addition  to bringing  such  continental  policy  and  institutional  frameworks,  African governments should also discuss and bring forward looking solutions for an effective aviation  sector’s  corporate  governance  structure.

“As  the  Aviation  industry  has  followed  the  principles  of  corporate  governance  in business  operations  through  different  administrative,  it  is  a  must  that  the  industry  considers  an  effective,  transparent,  and  measurable  administration  which  shall  create confidence  for  Shareholders,  investors,  and  stakeholders,  which  in  turns,  will  be  the key factors to generate return and maximize value as well as enhance competitiveness of the industry to sustainable growth”.

Mogues noted that, though there were no  universally  accepted  and  optimal  corporate  governance  structure  for  the aviation sector in the world said, no matter what was adopted, a right corporate governance of  the  aviation  industry  should  entertain  broad  ideas  of  fulfilling  long-term  strategic goals of the industry; taking care of the interests of employees; a consideration for the sustainable use of the environment; socio-economic benefits to the  local community; and Maintaining excellent relations with all concerned stakeholders  horizontally or vertically.  

An Aviation Consultant, Dr. Daniel Young said, in Africa, of the three models known globally, the Anglo US, Japanese and German models, none was practiced, adding that, what was practiced in the continent was a partial imperialistic model where the owner of the business is an emperor dictating the rules and decides how the business should be run.

He opined that, with such situation, there would be no checks and balances, no one would be accountable and that was why airlines and agencies fail.

“That is why agencies fail because as the agencies make money as the airlines make money, the original convener the founder can easily without recourse to anyone dip his hands into the airlines and spend at will when the time of A and C Checks comes there wouldn’t be money to take the aircraft out and bring them in, that’s the critical issue that we have here”.

Young emphasized that, Owners of airline business must separate themselves from the business, stay away from the day to day management while they appoint an independent CEO, governing board and a supervisory board.

“Having a governing board and a supervisory board and then having below the CEO board of directors or directors  that are working directly with the CEO and the extension of staff so, you see accountability revolving round the entire circle and that makes for healthy growth and capacity development within the said agency or the airline”.

“Appointing your family members as members of board of Directors that is nonsense, it doesn’t take anyone anywhere, no one goes anywhere with that because when critical issues with regards to employment of Directors and appointment of directors, sacking , making decisions to extend the brand and all that are made, only one person takes that decision and it affects a whole lot of things. And what we are saying here in Africa, if we wish to grow, if we wish to make the industry survive because we don’t have companies in Africa that is up to a 100 years because of this particular issue”. 

The organizer of the event, Toni Ukachukwu in his opening remarks said, no significant development can be made in aviation unless the leadership gaps were addressed. 

According to him, because many airlines in Africa were one man show with the owners in full control of decision making, this had led to low span life of airlines in Africa. 

“This leadership approach fuels unethical practices, fraud, indiscipline, and unaccountability”.

The Director General, NCAA, Capt. Musa Nuhu says, the owner-manager syndrome was a major issue and until that was addressed, accountability, transparency and growth of airlines maybe a mirage.

“I have seen an owner of an airline who went to the counter of an airline to ask how much was made with a view to collecting whatever sales that were made that day. There is nothing I have not seen in this industry.  Economic regulations will be more robust as from next year”.

The climax of the forum was the presentation of awards to aviators who have distinguished themselves in the industry.
The three categories award are the Changemakers with 21 individuals, Brands and Hall of Fame.

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