The Nation Newspaper

Tag: Airlines

  • ‘Harsh environment causes airlines’ failure’

    ‘Harsh environment causes airlines’ failure’

    An expert in the aviation sector has linked majority of airlines’ failures in the country to the harsh operating environment.

    He said this has reduced the number of operational airlines in the country from 150 in 2000 to less than nine.

    The Nigerian Civil Aviation Authority (NCAA) few weeks ago said when the regulator commenced operation in year 2000, it had 150 operating airlines in its register, but that number has reduced to about nine.

    The President and Chief Executive Officer, Sabre Network NMC West Africa and President of the Aviation Safety Round Table Initiative, Gabriel Olowo,  said 30 per cent of the failures of the airlines were as a result of mismanagement by the owners and 70 per cent are as a result of the harsh government policies.

    Olowo, who spoke in Lagos, said: “I have been in the sector since 1973 and I have seen the airlines failing within a space of ten years they started operations. So, there is a common factor. The business of Nigeria Airways was government business. The problem of corporate governance has always been there.

    The airline was supposed to be repackaged and become a new carrier, but the then president said the government was not buying into the repackaging,” Olowo saidd.

    He recalled that the second generation airlines, such as Okada Airline, Hak air, amongst others, all meant well, adding that Okada brought a Boeing 747 and that aircraft never flew but was left to rot.

    “The operator of the airline got a promise from government, but we were looking at the airplane everyday positioned to do Lagos-London-Lagos routes. That was on the side of government and this was the same situation for Okada Cargo and Hak Air,” Olowo said.

    He said as far back as 1994, exchange rate was around N22 to a dollar, while Nigerian airlines were selling one hour in Jet for Lagos-Abuja or Lagos-Kano at N2,200  at the exchange rate of N22, that amounted to $100dollars.

    “Lagos-Abuja was $100 value in 1994, which was about 23 years ago. Today exchange rate has moved from N22 to N450. Today, an airline sold ticket for N16,000, which is just the equivalent of $30.

    “Someone in government should raise alarm on whether they want to kill the airlines. If I am in government, I will shut down the airline, because this is showing you desperation for cash flow. And they call it promotion. What kind of promotion?” He said the exchange rate will never make you earn the right tariff because people will not be able to buy the ticket.

  • Disquiet in aviation sector over AMCON takeover of airlines (II)

    Disquiet in aviation sector over AMCON takeover of airlines (II)

    •Continued from last week

    “This is how they have been running the place and these were some of the things we met on ground.

    “The first thing we did when we moved in was to address the payment of staff salaries. Remember, some of them were owed up to seven months. The staff members have expressed satisfaction with what we have done.

    “We are hopeful that with an annual profit of about N7 billion, and if the monies are not laundered, I think we can pay back the loans in time. The AMCON debt is about N147 billion. There are local banks which Arik Air is owing about N165 billion. These banks collect all the monies they make.

    “The issue of converting the airline to a national carrier is not on the table. Arik is too complicated to make a national carrier. The total asset worth of the airline right now is less than N40 billion.

    “The government does not have plans to do that. The interest of government is that we must continue to fly and people must work. They have about over 2,000 employees.

    “They do not need more than N10 billion to stabilise their operations. Within the next three months, they will be able to pay back what we have put in right now. In national interest, Arik Air should be allowed to fly.

    “We are thinking of suspending international flights. Arik Air needs about N1.6 billion to buy fuel for international routes. We cannot do that right now. By the time we manage it for about six months, the airline can now survive and then, we can sit down and talk about where to go from there.

    “Based on what we have achieved in just one week, we are hopeful that in the next three weeks, the issue of delayed or cancelled flights will be things of the past.

    “We are carrying everybody along. At the end of the day, we want to return it to profitability. We need to emphasise one fact – that the only way we can recover our debts is for Arik Air to continue to fly. The banks have come to realise that this is important.

    “The government has a responsibility to ensure that it intervenes whenever there is any threat to national interest. Within the next 30 days, we will be going to places we have not been to in the last three years.”

    Observers said that a lot of positive developments have returned to the airline barely two weeks after the AMCON took over Arik Air’s management.

    The challenges created by the airline’s former management, have been surmounted the Capt. Roy Ukpebo Ilegbodu management, under the receivership of Mr. Oluseye Opasanya.

    Tumba said: “Nigerian banks that hitherto turned their backs to Arik are now cooperating and supporting the new management; engagement with international and local creditors have also been successful; just as discussions with critical service providers and industry stakeholders have yielded the much desired positive results.

    “Arik Air has also paid the insurance premium, which was on the verge of expiry had the AMCON not taken over on February 9. The airline has also commenced the payment of outstanding salaries, which has greatly boosted staff morale as well as performance.

    “The airline is also in discussion with different creditors and stakeholders to recall a good number of aircraft into the fleet as soon as possible, which will increase the number of daily flights.

    “Aside from that, a good number of affected passengers have been refunded and efforts are on to reach out to those yet to get their refund as a result of suspension of flights to some routes.

    “As a result of these positive developments, customers of Arik Air, especially from the corporate circle, are gradually coming back with assurances of stable and professional management with improving performance record within a short period, which is buoyed by the fact that the airline has an unparalleled safety record that speaks for itself in the history of aviation in the country.

    “The new management of the airline under the auspices of the AMCON has held series of fruitful engagements with major suppliers of aviation fuel (ATK), and agreements reached for regular supplies of the product to Arik, which has guaranteed regular flights.

    “They said that incompetent people are running the organisation, yet Arik Air has no financial account since 2015, has not paid taxes or remitted staff pension deductions for over two years and new debts are popping out every day. A clearer picture will come out after KPMG forensic audit report in the next 12 weeks.”

     

    The beginning of the end

     

    Arik Air sailed into trouble water for its failure to service the non-performing loans it acquired in 2011 from two distressed banks, which were taken over by agency.

    The N85 billion loans were acquired include: N17 billion from Union Bank Plc and N14 billion from Keystone Bank Limited.

    A source hinted about the airline’s exposure: “The facilities were granted to Arik Air for purchase of additional aircraft and to refinance existing term loans. The default in repayment by Sir Johnson Arumemi-Ikhide, the principal promoter of Arik Air posed systematic threat to the banks and indeed Nigerian economy.

    “As a matter of fact, apart from the AMCON, Arik Air is also currently indebted to other commercials including Standard Chartered, Zenith Bank, Ecobank and Access Bank to the tune of about N165 billion.

    “Arik Air owes the federal aviation agencies and regulators N26 billion. $11 million is owed to European aviation agencies and service providers $20million owed to Lufthansa Technique.

    “In September 2011, the agency, in a bid to provide further support to Arik Air restructured its debt from N85 billion to N70 billion as a nine-year term loan, running at 12 per cent  per annum. Other terms of the restructure include the following:

    • The AMCON to appoint a resident monitoring manager who shall have the authority to call for any of Arik’s records for examination;
    • Arik to provide three-year record of its remittances to FAAN.

    “In all of these, Arik Air defaulted on the term of the restructure and failed to make the monthly repayment as agreed. Again in May 2013, the agency sourced N26 billion of the Central Bank of Nigeria (CBN) Power Aviation Intervention Fund (PAIF) through the Bank of Industry (BoI) on behalf of Arik.

    “The AMCON disbursed N21.38 billion of the BoI loan to Arik as working capital. Out of this amount, N21.4 billion was meant for reconfiguration of two aircraft from passenger to cargo carriers.

    “This was never done as the funds were diverted by Arik management and is now the subject of Economic and Financial Crimes Commission (EFCC) investigation. Both aircraft were abandoned in the United Kingdom (UK).

    “In December 2015, due to the accrued interest and unpaid principal, a second restructuring was proposed for Arik Air’s debt to reduce the debt from N138 billion to N90 billion, which is awaiting CBN approval.

    “This was proposed based on the airline’s plan to do a private placement and subsequently do an IPO within a period of six months. Based on that, they were expecting N44 billion from Afrexim as a bridge. None of this happened as Arik Air could not comply with any of the conditions given for a peaceful resolution.

    “In spite of the leniency, good will and good faith demonstrated by the AMCON to support an indigenous strategic business; Arik Air, throughout the negotiations, refused, or neglected to adhere to the terms of amicable settlement.

    “However, the agency continued to bear the burden of repaying the Bank of Industry (BoI) loan at one per cent interest rate without any corresponding commitment from Arik. So far, the AMCON has paid N9.05 billion on behalf of Arik.

    “Arik Air vehemently refused to cooperate with the AMCON resident monitoring manager. It refused to disclose financial information to the agency. Of all our investments in Arik, AMCON total recoveries from Arik till date is N4.6 billion, which is only 3.2 per cent of current exposure. The total repayment by Arik in the last 12 months is N50 million.

    “As part of its support for the ailing aviation industry, the AMCON opened fresh talks in January last year with the airline towards a new settlement agreement based on its planned recapitalisation. There was an agreement on new restructuring terms, subject to CBN approval.

    Included in the terms are: N3.3 billion monthly payments from Arik Air sale; N13 billion Afrexim guaranteed loan; and N20.0 billion from Arik’s planned private placement.

    “But Arik did not keep its end of the bargain with the conditions unfulfilled.”

    Investigations showed an improvement has been recorded on the performance on Arik Air’s “Golden Triangle” routes of Lagos – Abuja – Port Harcourt.

    According to statistics, on time performance on the airline’s other domestic routes and the West African Coast has improved by about 78 per cent in the last one week.

    A source claimed that on time performance dwindled under the former management because of its inaccessibility to aviation fuel, arising from huge debts to all fuel marketers.

    The source  alleged: “In the past, Arik Air flights were delayed because their managers’ indebtedness to fuel marketers, who were unwilling to supply on credit.

    “There were no spare parts in the store. Insurance cover was almost expiring and workers’ salaries were unpaid. All these impacted on the operations of the airline.

    “But, under the AMCON appointed management, the airline is running smoothly, we have secured the confidence of our suppliers and vendors and the airline is running better than when the old team was there.”

     

    •Concluded

  • Airlines’ grave?

    Airlines’ grave?

    •Staggering failure rate suggests a fundamental problem

    The statistics of failure is staggering — 141 airlines have failed in the past 17 years (2000 -2017), making it an average of eight failures in a year!

    The West African coast was dubbed the white man’s grave, no thanks to tropical mosquitoes and the consequent malaria. Might Nigeria now be branded the grave of aviation, with so many airline businesses going under?

    According to the Nigerian Civil Aviation Authority (NCAA), between 2000 when it birthed and this year, 141 airlines had gone under, among them many market leaders in their days. These include Bellview, which was a market leader for quite some time, Virgin Nigeria (which birthed from the Obasanjo Presidency’s aviation reforms), Chanchangi, Sosoliso, EAS, Okada Air, Space World and others.

    According to Sam Adurogboye, NCAA’s general manager, public affairs, the reduction in airlines was due to operational and safety “sanity”, which the regulator imposed. From 141 in 2000, therefore, the number is down to nine.

    That is quite a crash, and we could just imagine the high level of investment blood that sector has shed. Yet, you cannot blame NCAA for taking its regulatory duties very seriously.

    Indeed, better to bleed in cash (no matter how painful and distressful for individual pockets), than for airplanes to drop off the skies like poisoned birds, leaving utmost anguish and misery; and a gash in the national psyche. With more operational rectitude, those tragedies are avoidable.

    Indeed, in the International Civil Aviation Organisation (ICAO) code, NCAA has a global operational constitution. That has no space for the so-called “Nigerian factor”, euphemism for tweaking the rules for short-term gains, but long-term ruin. Though with this sharp failure of operating airlines, many an investor must have faced ruin, safeguarding air passengers’ safety is hardly a subject for sentiments.

    If the regulator does its job well, ICAO-sanctioned checks would be carried out, home and abroad; rigid and robust maintenance checks would be done; minimum manpower requirement would be maintained, especially but not limited to certified pilots, among others. As NCAA rightly said, the ICAO rules are clear: whoever can’t cope with its rigour drops out. It is so all over the world, so it can’t be different for Nigeria.

    In fact, lax regulations accounted for much of the air disasters in Nigeria. As NCAA admitted, any vain but rich Nigerian could just walk into the aviation sector and pick up a licence, simply because he has loads of cash and even more — tons of ego. That never should have been. Aside from fatal air crashes, such practices trivialise passengers’ rights; and de-market local aviation.

    Still, even NCAA, and by extension the Federal Government, must admit the harsh operational environment for aviation in this country. Players groan at gruelling costs, the most basic of which is the low parity of the naira to foreign currencies.

    For starters, airlines fund their costs in dollars. But they make their revenue in naira — and it takes no less than raking in N400, to make back every dollar spent. Yet, the market is not big enough for each airline to charge the market price. So most times, there are caps on fares. Otherwise, volume would drop, investments would go to seed and jobs would be lost.

    Local civil aviators also complain of high taxes, not enough hangers for aircraft checks and routine maintenance, periodic glitches in a basic component as aviation fuel in a country that produces crude oil, and suspect corporate governance in NCAA and allied agencies the airlines have to deal with in their day-to-day line of work.

    Although the government had in the past intervened in aviation with special funds (all to little avail), the sector should be viewed as strategic to a modern economy; and given the crucial attention it craves.

    This high rate of business attrition in aviation suggests a fundamental wrong, apart from the notorious Nigerian penchant of not playing by the rules. Those skewed fundamentals must be found and fixed, to change the present sorry tale.

  • ‘Poor corporate governance to blame for airlines failure’

    ‘Poor corporate governance to blame for airlines failure’

    Sam Adurogboye is the General Manager, Public Relations, Nigerian Civil Aviation Authority (NCAA), the apex regulatory body overseeing airlines in the country. In this interview with Ibrahim Apekhade Yusuf he gives a bird’s eye view of the challenges besetting airlines and proffers the way forward. Excerpts:

    What is the true state of the airlines in Nigeria?

    Going by the records in the defunct Federal Civil Aviation Authority (FCAA), what we inherited was over 150 airlines. But by the time we went for audit in 2006, many had gone under. When we were clearing our register we discovered that all these 150 airlines said to be operating at one time or the other were no more there. Nobody blamed the FCAA for that. The question now is, for those airlines that went under the US did anybody blamed it on the FAA? No. Every business has free entry and free exit. As we speak, there are just about nine airlines that are functional and among the domestic operators, there are those that pick up bills that have never owed us. There are new airlines that are making profit despite the tcredit crunch in the economy. The fact is, if you do this business the way it should be run, you can break even. But if you do it by ‘Myself, Family and Nigeria Limited,’ without recourse to good corporate governance it’s a recipe for failure. For instance, there is a case of  an MD of an airline coming in and asking his staff how much did you make today and he goes away with the money even the one that ought to have been ploughed back for the business to pay insurance, for maintenance and all that is not being taken care of. There is no way such an airline can succeed. That has been the experience thus far.

    What is the role of the NCAA in all of this?

    Unfortunately, some stakeholders both within and outside the airline industry have been blaming the NCAA for the misfortune of some of these airlines. NCAA is a regulating agency for the industry and by law both within our domesticated statutes and universal law, it’s forbidden for a Civil Aviation Authority to run an airline or get involve in any commercial venture.  The only reason the NCAA exists is to ensure the safety of the aircraft and make sure it’s airworthy at all times. We oversight the operators, that is those who work on the aircraft including the pilots, the engineers and every other person that works with the aircraft. We use our certificates to regulate the industry. Now, the aircraft operates in an environment which is the airport, so we oversight the airport too. The aircraft flies through a space, which is a flight path, the airspace and that is being managed in Nigeria by the Nigerian Airspace Management Agency (NAMA). Then of course, people work in an aircraft and we try to find out where they are trained from. To do that we oversight the institution that trains the personnel as well. So the totality of everything we do revolves around the aircraft just for it to continue to be safe for air travellers. That’s the only reason why we exist.

    What are the requirements for setting up an airline?

    Now, if somebody is going to set up an airline, there are requirements. If you go to our website, it’s all laid out there in black and white. There are categories of aircrafts you can buy whether as a corporate body or as an individual or for third party use. There is a requirement if you want to buy commercial airline different from the one you want to use for yourself and so on and so forth. Now aside that requirements, there is an aspect security will come in, which we equally need and it will get to us confidentially about the source of the money, your antecedent, in order to give us your profile. The idea is to make sure the money was not stolen and things like that.

    Then we also ensure your capabilities in the area of safe operations. We have to see the aircrafts, your rented office, you must also have insured the aircraft, and you must have employed staff.  Of course, you must have done your own feasibility study and the business model you want to adopt.

    What will you say of the multiple charges and levies being paid by the operators?

    In aviation business whether in Nigeria, Ghana, Canada, Singapore, there are universal charges. So there is no question of multiple charges at all. It’s all part of statutory requirements. You can’t operate in an airport and you won’t pay for landing. Each time you bounce the aircraft on the runway, it is required to be maintained. You can’t operate an aircraft and refuse to have an office. You want to operate from one point and the other and you don’t want to pay navigational charges? Every plane that is flying follows a path. You don’t go to London and you find your way to Owerri. Why are you not on the way to Owerri? It’s because there is aid, the airspace is charted, and everybody follows a path. Navigational instruments are installed on routes to guide you. Somebody is in touch with you from the Tower, who hands you over to the next airspace manager if you move outside of their airspace and the other sides picks it up to guide you. Personnel and equipment being used cost money and this has to be catered for. It’s the same charges being paid here that is paid elsewhere. So it’s not any different. Insurance is dollarized. The cost of fuel is high. All these are not within the control of the NCAA. So you can’t blame this on the NCAA. We don’t joke with maintenance, aircraft must be 100% fit at all times. The maintenance is fixed.  If you move the aircraft from one point, you must carry out an A check and when you fly for some hours you go for a B check and another fix hours you go for C check, which is a little bit comprehensive and most C checks are not done in Nigeria, they’re done abroad and you don’t do it anywhere you like you have to do it at where we approve. Meaning that wherever you’re going to service your aircraft, we must be involved as long as you’re in our register. And when you’re even doing the servicing, we have to send our personnel there to monitor the process to ensure that things are done in line with the standard procedure. That’s how painstaking we’re.

    Can you clarify the issue of airline operators paying 5% surcharge to NCAA?

    Our only source of revenue is 5% of ticket handling and it’s  in the Civil Aviation Act of 2006. NCAA is run and sustained by passengers because we exist for the safety of the passengers. When I fly now, I buy a ticket and become a passenger as well. The 5% is added to the airfare paid by the passengers to the airline for a one hour flight. The airline only collects this on behalf of the NCAA to remit to us later. So it’s not a surcharge to the airline in the first place. No. Even the idea of collecting on our behalf was a decision taken by the airlines at a Civil Aviation Committee Review because our officers use to collect it. But the Committee said rather than us  having our officers at the counters, let’s collect on your behalf and remit later. So how does it now become a surcharge? That is deliberate propaganda and lies against the NCAA by those out to deceive the uninformed publics. There is also hue and cry about NAMA charging navigational fees. All these are standard procedures done abroad nothing is arbitrary here.

    Does this charges applies to foreign airlines operating in the country as well?

    Of course, the foreign airlines operating in Nigeria are also paying and they pay it in dollars too. But the local operators who pay in naira just don’t want to pay. Are you saying the foreign airlines are not facing recession too? Nobody is immune from it,  not even the U.S. There are more mergers of airlines in America than anywhere else in the world. As we speak, bigger carriers are merging. There is  no airline that doesn’t belong to one alliance or the other. British Airways, for instance, belongs to Star Alliance, One World; etc. Everybody is pairing up because they know they can’t do it alone in view of the prevailing economic situation afflicting most countries. What I expect from local operators is to sit down and look at how to get over the worrying economic situation rather than resort to the blame game.

  • AON: multiple charges, unfair taxes killing domestic airlines

    Domestic airlines under the aegis of Airline Operators of Nigeria (AON) yesterday lamented what they described as “multiple and unfair taxes” inflicted on indigenous carriers.

    The operators said such taxes were stifling their airlines and might soon kill them.

    AON Chairman Captain Nogie Meggison, who spoke at the weekend, alleged that domestic airlines had become cheap targets for government agencies.

    Such development, he said, has put additional burden on operators, thus providing the reason why 27 airlines have died in the last 25 years. If domestic airlines must survive, Meggison canvassed harmonisation of the charges by aviation agencies into a one-stop payment shop.

    He canvassed a 10-year tax holiday for domestic carriers.

    The AON Chairman appealed to the government to urgently review taxes, including Ticket Sales Charge (TSC), en-route navigational charges, Value Added Tax (VAT), passenger service charge, charter sales charge, aircraft inspection fees, simulator inspection fees, landing charges, parking charges, terminal navigational charge, fuel surcharge, airport space rent, electricity charges and apron pass, ramp access charges and others to enable them in business.

    Meggison wondered why government would charge domestic carriers VAT and other modes of transportation are excluded.

    The Civil Aviation Act of 2006 (Part 18.12.3) requires that the NCAA regulates civil aviation and the charges imposed by civil aviation authorities and agencies.

    Such charges, Meggison said ought to be approved and reviewed periodically in consultation with stakeholders.

    The NCAA policy, Megginson said is not being adhered to as airlines are saddled with charges without any form of consultation whatsoever.

  • Airlines unable to repatriate ticketing cash from Nigeria, others

    Airlines are complaining that dollar scarcity has made it difficult for them to repatriate ticketing cash from Nigeria, Egypt, among other countries.

    Ethiopian Airlines yesterday said it could not get cash out from some African countries, lamenting that it was unable to repatriate about $220 million held in local currency in Nigeria, Egypt and some other African countries because of foreign exchange shortages in the countries.

    Its Chief Executive, Tewolde Gebremariam, told Reuters that this was partly because countries, such as Nigeria, had been hit by recent falls in oil prices, which was reducing foreign exchange inflows. This also meant cash held in the local currencies was losing value, he said. “This is a huge challenge for us,” the CEO added.

    The International Air Transport Association (IATA)  last June, following the introduction of flexible foreign exchange policy.

  • ‘Airlines’ de-marketing unhealthy for growth‘

    ‘Airlines’ de-marketing unhealthy for growth‘

    An aviation expert, Captain John Okakpu, has warned players in the aviation sector to desist from de-marketing airlines, describing such as an unhealthy trend  for the industry.

    Okakpu, who is Chief Executive Officer (CEO), ABX Cargo, said it was wrong for players in the sector to pull down any airline by insinuating that such carrier flies aircraft that are not properly maintained.

    He was reacting to public outcry over alleged negligence of Arik Air aircraft maintenance.

    Okakpu said people spreading such misinformation about Arik Air do not have the interest of the sector at heart, saying such destructive and baseless allegations were counterproductive.

    The expert said such allegation would damage public support and confidence in the sector.

    Okakpu said safety was the first obligation of any airline, adding that in the present circumstances, Arik is the only structured airline in West Africa with state-of-the-art maintenance facility.

    He said: “As a stakeholder in this industry, it beats my imagination for some people to believe wholeheartedly that Arik would play down on safety, knowing very well that any slight mistake leads to catastrophe.

    “Though the airline has made clarification on the maintenance status of its aircraft, it is still quite instructive to plead with Nigerians not to kill this ‘baby’ through rumour mongering.

    “As a stakeholder in the aviation industry, I can’t feign ignorance of the fact that flights are delayed or cancelled, leaving bad impressions on the minds of passengers. But that is totally different from ignoring safety measures.

    “It is not only unpatriotic, but malicious and total sabotage for someone to make such baseless allegations just to deceive the public.”

    He said should Arik depart from ICAO set standards, experts will call on the Nigeria Civil Aviation Authority (NCAA) to exercise its regulatory powers.

    Meanwhile, the Nigerian Civil Aviation Authority (NCAA) has warned industry stakeholders to avoid anti-competitive practices in the sector.

    The warning was contained in a statement by the regulatory authority’s spokesman, Sam Adurogboye.

    He said the NCAA is getting worried over recent cases of disinformation prevalent in the industry.

    Adurogboye said it was unfathomable that some questionable sources have been posting and circulating some fictitious stories about some airlines – insinuating a crash or claiming a particular carrier does not possess aircraft spares to sustain a safe operation, using the online platform.

    The NCAA, he said only recently carried out a safety audit on Arik Air and no issue of safety concern was found.

    He warned: “All those involved in this nefarious activity should promptly desist from this course of action as the consequences is seriously detrimental to the industry, particularly the confidence of the passengers.

    “The Nigerian Civil Aviation Authority (NCAA) is well aware of the high volume of passenger movement within the country and from the Diaspora during the yuletide season.

    “NCAA’s Aviation Safety Inspectors (ASI) have, therefore, embarked on increased surveillance on Airline operations in addition to our daily Ramp inspection diligently carried out so as not to leave room for anyone to cut corners.”

    Also, the management of Arik Air has countered effort to de-market it by those that may have axe to grind with the company, claiming that the airline does not adhere to the maintenance schedule of its fleet.

    In a statement, its spokesman, Adebanji Ola denounced the allegation.

    Ola said the airline has led the pack in adhering to international safety and operational regulations, using modern aircraft in addition to having high maintenance and safety standards.

    Ola said: “This is evident in the airline achieving the stringent IOSA (IATA Operational Safety Audit) four consecutive times with the last two audits cleared successfully without any findings. This achievement has also earned Arik Air, EIOSA (Enhanced IATA Operational Safety Audit), making it the only airline in West and Central Africa regions to have such certification.

    “The airline operates the youngest fleet in West Africa with an average hull age of 7.8 years and has an existing contract with world renowned maintenance providers such as Lufthansa Technik and Lufthansa Cityline under full “turnkey” maintenance service contracts and other leading maintenance service providers such as SAMCO Engineering, South African Airways (SAA) Technical and Ethiopia Engineering.

    “Arik Air also maintains a well-stocked spares parts store with market value of over 250 Million USD.

    “The Maintenance/ Engineering department of Arik Air has been audited severally by external auditors from the oil and gas sector, who have attested to the airline’s provision of a safe and reliable aircraft operation, first class planning, efficient spares holding, whilst increasing aircraft utilisation with no compromise on safety.

    “This department is responsible for reliability monitoring, original equipment manufacturers service letters and American Federal Aviation Administration (FAA), European Aviation Safety Agency (EASA) notifications, ensuring Arik Air’s fleet is maintained according to standards complimenting air worthiness at all times.

    “We appeal to our guests to ignore any message alleging that the airline’s aircraft are not well maintained.”

  • Why re-insurer will blacklist Nigerian airlines, by operators

    Why re-insurer will blacklist Nigerian airlines, by operators

    Nigerian airlines risk being blacklisted unless they pay the backlog of insurance premium owed global re-insurer, Lloyds of London, Airline Operators of Nigeria (AON) Chairman, Nogie Meggison, has said.

    Captain Meggison said Lloyds threatened to blacklist airline operators because of their inability to  pay premium on aircraft insurance, adding that some were in arrears by four months.

    He said besides blacklisting of operators, the re-insurer may also downgrade Nigeria  into a high risk region where premium on aircraft insurance is prohibitive.

    According to him, failure to pay the monthly premium by some operators was predicated on the difficulty in accessing foreign exchange through the official window of the Central Bank of Nigeria (CBN).

    Meggison warned that blacklisting Nigeria would have a negative impact on the economy because operators might find it  difficult  to acquire aircraft from lessors without insurance cover.

    The Nigerian Civil Aviation Authority (NCAA) prescribed holding of valid insurance cover as a prerequisite for bringing in and operating any aircraft in the transport category in Nigeria.

    The regulatory requirement also includes valid insurance cover for aircraft, passengers and third party liabilities.

    Meggison said failure on the part of debtor-operators to meet their obligation  could lead to suspension of operations and job loss, adding that apart from scheduled and chartered aircraft operators, helicopters flying to oil rigs, vessels, high rise buildings, airport terminal buildings would also be affected.

    The AON chief said operators may find it difficult to lease aircraft from other countries not covered by Llyods re-insurance on account of the blacklist. He listed China and Russia as other markets where Nigerian operators could acquire aircraft with difficulties due to the Lloyds blacklist.

    He said: “If Nigeria is blacklisted, the premium will rise by 300 per cent due to high risk.

    “We are not keeping to payment dates. Domestic carriers have a four-month’ backlog on payment. It will be funny to wait until there is an incident before the airline tries to pay its premium.

    “We, therefore, use this medium to call on the Minister of State Aviation, Hadi Sirika, to as a matter of urgency come to the aid of domestic airlines operating in the country.

    “One of the ways to achieve this is to forge a joint working group with the Federal Ministry of Finance and the Central Bank of Nigeria (CBN) on how the nation can take exigent steps to avoid the downgrade/blacklist in the interest of safety and the economy.”

    Meggison said Nigerian market is grossly unable to effectively underwrite risks in aviation because of its high exposure, stating that airlines require an average of $500 million policy for an airplane to cover hull, war and third party liabilities.

    Meggison said: “When this figure is multiplied by the number of aircraft operating in the country, it becomes clear that Nigerian insurance companies can’t cope, considering the enormous volume of resources needed to cover all those aircraft of which the total coverage value will be in excess of $6 billion.

    “Virtually 100 per cent of the aircraft being operated in Nigeria are re-insured by Lloyd’s, hence, Nigeria can’t afford to be blacklisted as a nation because this will have very grave consequences, as the entire domestic airlines will shut down since airplanes can’t be operated without being insured.

    “It will take some days at best to switch to the secondary market of Russia and China, whose premiums will also have skyrocketed if we are blacklisted by Lloyd’s,” Meggison said.

  • NiMet alerts airlines, others over dust haze

    NiMet alerts airlines, others over dust haze

    …Flight delays, cancellations expected

     

    The Nigerian Meteorology Agency (NiMet) has warned airlines of harmattan haze sweeping across the country.

    The agency said the adverse weather condition will compel airlines to delay or cancel scheduled flights whenever horizontal visibility falls below the stipulated minima.

    The agency on October 2016 issued an advisory forecast for dust outbreaks to affect the country during the December to February dry season period.

    The Director-General of NIMET, Dr. Anthony Anuforom said occasional outbreak of dust which will reduce horizontal visibility significantly to 1000m and below in some places.

    He also stated that the expected increase in concentration of the dust particles will lead to colder and drier atmosphere as well as increase in incidences of respiratory disorder.

    In the course of monitoring the weather situation in and outside Nigeria, he said NiMet has observed that in the past 24hours, dust has been raised over the source regions in Niger/Chad republic which will be transported by northeast trade winds into and across the country.

    He noted that visibility is as low as 100m were reported by some stations in the Niger republic.

    His words: “Current reports of visibility values across the country are good. However, deterioration is expected to set in beginning from areas in the far northern parts of the country over the next twenty four to forty-eight hours.”

    “There is prospect of fresh dust plumes being raised in the coming days, with its attendant consequence. NiMet will however, continue to monitor the weather and climate conditions as they unfold and provide regular updates and advisories to the general public”, he added.

    The Nigerian Civil Aviation Authority (NCAA) has continuously alerted airlines and passengers of the impact of harmattan haze to air travel. It has its minimum standard visibility between 700 to 1000 feet depending on the airport.

    Experts reason that regulatory body should look at the equipment of each airline and grant some of the airlines that have Next Generation aircraft the right to operate under low visibility, using the modern equipment in their aircraft.

  • Forex concession: NCAA urges airlines to improve service

    Forex concession: NCAA urges airlines to improve service

    The Nigeria Civil Aviation Authority (NCAA) has advised airlines to operate with renewed vigour, as they  have secured a special sectoral Foreign Exchange (forex) allocation in the Secondary Market Intervention Sales (SMIS).

    NCAA’s Director-General Capt. Muhtar Usman gave the advice in a statement  in Lagos yesterday.

    The forex concession was recently granted to airlines by the Central Bank of Nigeria (CBN) following the intervention of the Minister of State for Aviation, Hadi Sirika.

    The statement said: “This is to further engender market confidence, ensure access to forex by the airlines and sustain the integrity of the Nigerian Inter-bank forex market.

    “The CBN has resolved pursuant to the minister’s show of concern to intervene in the inter-bank forex market through forward settlement.

    “For clarity, the SMIS retail is an important one-off exercise dedicated to the clearance of backlog of matured forex obligation for airlines”.

    According to the statement, this success is another step ahead in seamless operations in the aviation industry.

    “It is expected that this is a major window for those airlines that had earlier ceased their operations to recommence in earnest.

    “Therefore, with this intervention comes a landmark incentive for both local and foreign operators to carry out safe, secure and lucrative operations in Nigeria.

    “In addition, all scheduled and mandatory checks which are done in the diaspora will be undertaken with this leverage at a reduced cost.

    “The NCAA, therefore, expects foreign operators to carry out their operations with renewed vigour,” the statement said.

    It added that problems associated with repatriation were now a foregone conclusion.

    The authrity advised operators to take full advantage of this laudable gesture of the Federal Government and adhere strictly to the provisions of the Bilateral Air Services Agreement (BASA) with Nigeria.

    NAN reports that Usman earlier led a delegation of Airline Operators of Nigeria (AON) to meet with ministers of State for Aviation, Finance and their Petroleum counterparts, including the CBN governor.

    As a result, Sirika was able to extricate for foreign airlines, 50 per cent clearance of their forex obligations.