By Chinelo Obogo, [email protected]
For over nine years, Nigerian airlines have continued to groan under a challenged business environment that makes it difficult for them to thrive. Many of them have at different fora, expressed their frustration at the bottlenecks they are facing including those related to aviation agencies just to keep their businesses afloat. Airline business especially in Nigeria is capital intensive, yet profi margins asre very little.
It was against this backdrop that the 25th annual conference of the League of Airport and Aviation Correspondents conference held in Lagos on July 28, that the domestic operators found a platform to declare that the industry is in dire need of policies and regulations that will revive their businesses. They also said a new approach in the way things are done is of utmost importance if the industry is to fully recover from the COVID-19 pandemic.
Chairman West-link airlines, Captain Ibrahim Mshelia, who spoke during the conference, listed some of the factors responsible for the collapse of domestic airlines after just a few years of commencing operations and he warned that if nothing is done urgently, operators will keep struggling to stay afloat.
Instances of such aviation policies he considers to either be retrogressive, archaic or not in conformity with the global rule of practice include the procedure for obtaining and renewing an Air Operator’s Certificate (AOC). An AOC is the approval granted by the Civil Aviation Authority (CAA), to qualified aircraft operators, so it can use the aircraft for commercial purposes. It is usually renewed after two years but Mshelia said this renewal policy is retrogressive. He proposed that AOC’s should have no expiry date unless suspended or revoked while the ops specs only should have a biannual expiry, to shed unnecessary expenses to the operators
Operators advocate for AOC’s to have no expiry date
“I want to refer to the relevant ICAO provisions on the procedures for the issuance of Air Operator’s Certificate (AOC) and the grey areas, which I am of the opinion, should be corrected for the benefit of operators and the growth of our Aviation sector. The current system and its rigidity have really stagnated the growth of the sector. With the lopsidedness in the procurement procedures and the operational limits of AOC holders in Nigeria, there is an urgent need to amend our act and policy in this area, to empower the civil aviation to also break down the certification process of our commercial operations.
“Today, we have an unhealthy situation where there is a blanket issuance procedure of AOC for big, small, or large operations. Under this system, the roles of other segments of operators that are also entitled, by law, to operate commercial operations, unfettered as guaranteed by ICAO, are not spelt out. By ICAO standard, small, large and medium operations, including; Air Taxi, Air Charter, Cargo Only, nonscheduled and Scheduled operations etc, are recognised. It is interesting because ICAO does not discriminate because of the size of a nation. The Organisation allows several models of the size of the CAA of a country; small, medium or large CAA. ICAO also expects performance variance with the various sizes and accepts them into the comity of nations on the council.
“In certifying our operators however, one checklist is used for all. In order to enforce the norms and do all that is required to make our aviation sector conform to global norms, it is also expedient to ensure that we have the right staff with requisite experience to follow policy to letter and enforce it without fair or favour. This has to be done quickly, to galvanise the Nigerian aviation industry achievements. The staff of the agencies have done well so far but the new and desired NCAA will require a huge change of attitude as well.
“I propose that the AOC should have no expiry date unless suspended or revoked while the ops specs only should have a biannual expiry, to shed unnecessary expenses to the operators. I will also suggest that only qualified technical staff in the agencies should be hired and paid salaries commensurate with their counterparts abroad
“The Federal Airports Authority of Nigeria (FAAN), has its defined roles: which include provision of security and screening, offices and counters for airlines at the airports, the runways and tarmac to land and park aircraft, the conveyance of the passengers to and from tarmac etc. We also have to start thinking of arriving at a fair levy for these services. The huge burden of cost of operations weigh down too heavily on airlines,” Mshelia said.
Chief Executive Officer of TAL Helicopters, Femi Adeniji, who participated in the conference explained that in countries like the United States, AOCs are acquired for life unless such an airline has issues, which grounded its operations for years. He said that the same could be replicated in Nigeria, and called on NCAA to amend its regulations and put them in tandem with developments around the world. According to him, the one-shoe-fits –all approach in the regulation needed to be expunged for true development to set in.
Vice Chairman, Airline Operators of Nigeria (AON) Mr. Allen Onyema who also spoke at the event said it is unfortunate that the failure of airlines are often blamed on poor management structure. Onyema, who is the Chairman and Chief Executive Officer of Air Peace said policies were also major problem of the airlines and that there are myriads of problems confronting the sector but that however, things are gradually getting better.
“Recent government policies is better compared to what we had in the past. The present government has done well in ensuring policies such as customs duty waiver on aircraft spare parts and VAT. The AON presented the issue of the partial implementation of the Finance Act 2020 which prohibits the payment of duties and VAT on imported aircraft and aircraft spares by the Customs Service to the National Assembly. There was also the presence of a seven per cent surcharge on the assessed duties which was not supposed to be. This caused delays in the clearance of aircraft and aircraft spares leading to grounding of aircraft that would have been flying.
“With the help of the Minister of Aviation, the airlines contacted the Minister of Finance on the challenges and both Ministers swung into action. We commend the Federal Government for its unflinching support for the growth of indigenous investments in Nigeria. This was very evident in the manner the government got this challenge addressed immediately within 48hours to the joy of the airlines,” Onyema said.
Capt. Rabiu Yadudu, the Managing Director of the Federal Airports Authority of Nigeria (FAAN), also complained about the financial distress the industry is still facing, as he said it would take at least the next 24 months for the industry to begin its recovery from the effect of the COVID-19 pandemic. He said that without sufficient financial resources, it would be difficult for the industry to recover and called for the aggressive implementation of policies, saying while the industry was performing well in terms of regulation, implementation has remained a major challenge.
NCAA, NASS responds
Chairman, Senate Committee on Aviation, Smart Adeyemi and Chairman, House Committee on Aviation, Nnolim Nnaji who were both present at the conference, assured stakeholders that the Nigeria Civil Aviation Regulation (NCAR) Bill before the National Assembly will soon be passed.
Adeyemi said that the passage of the executive bill would further accelerate growth in the industry and promised that he would do all within his capacity to move the sector forward. “As soon as we resume from our recess, efforts will be made to ensure that we pass the NCAR bill before us. Aviation is a socio-economic of any nation. It requires the support of everyone,” Adeyemi said.
While Nnaji said that the aviation industry requires good policy governance and the right framework to move it forward. He also assured that the House of Representatives would accelerate the passage of the bill before it.
Responding to the issues raised, Director General of NCAA, Captain Musa Nuhu, said the job of the agency is only to oversee and regulate the airlines but that it is the Ministry of Aviation that is solely responsible for coming up with policies which the regulatory agency implements.
He however assured that the agency is working assiduously to ensure that all stakeholders including the airlines would have cause to smile when all its plans have been completed. He said, the NCAA is repositioning towards the effectiveness and efficiency of its statutory function of its safety oversight.
Capt. Nuhu listed some of the actions taken by the CAA to include, restricting of the Authority from eight to six directorates for a more responsive and flexible functionality, automation of internal process through the implementation change management and acquisition of appropriate ICT systems which was ongoing.
He however said that the Authority like any organisation has its own challenges and difficulties which is attracting and retaining adequate number of technical personnel critical for effective oversight of the industry. He promised that, the CAA would continue to partner all stakeholders especially the media for the attainment of industry potentials for the benefit of people and country.
“Development of a medium and long term strategic plans in consultation with all relevant stakeholders and collaboration with other aviation agencies is in full gear for preparations for the ICAO Universal Safety Oversight Audit Programme in 2022. This problem is global and not peculiar to Nigeria as CAA’s salaries and wages are not competitive with that of the industry a rival for the services of these technical personnel. We therefore enjoin all stakeholders to join hands in collaboration and cooperation to grow the industry,” Capt. Nuhu said.