As the Federal Government continues to probe the activities of some foreign airlines that have operated in the country over the years, experts have urged it not to shirk its responsibility of ensuring sustainability of Nigerian airlines which are already in dire straits.
John Ojikutu, a retired group captain in the Nigerian Airforce advised that government should immediately rise to the needs of Nigerian airlines by enforcing economic and commercial regulations.
Commercial regulations require that airlines and support operators’ financial balance sheets must be opened periodically to the established or authorised regulatory economic and financial agency and the Nigerian Civil Aviation Authority (NCAA).
“Unfortunately, six years after the Civil Aviation Acts have been passed to laws and five years after the NCAA has published the Nigerian Civil Aviation Security and Safety Regulations, government is still very much undecided on regulating the sector’s economy and the commercial activities of the operators,” Ojikutu lamented.
He stated that though not International Civil Aviation Organisation (ICAO) Standards, Commercial regulation is one of ICAO Recommended Best Practices to member states for sustaining safe operations of public or private operators.
“To sustain regular safe operations, airlines and support services operators must be financially disciplined and with backups especially for periodic aircraft maintenance and services, insurance, air and ground support services facilities, salaries and taxes, bank loans and lease obligations etc,” he said.
He disclosed that the lack of economic and commercial regulations had exposed and still exposing the operators of both private and public entities in the industry to huge debts and deficits, adding that the huge debts owed by most of the private airlines to the various ground and air services providers that include Federal Airports Authority of Nigeria ( FAAN), Nigerian Airspace Management Agency (NAMA), Nigerian Aviation Handlin Company (NAHCO), Skyway Aviation Handlin Company (SAHCOL) etc are already threatening the sustenance of the operations of these public and private operators.
“Moreover, as private airlines operators are not meeting insurance obligations particularly to the victims of their aircraft accident, the government too appears to be shielding them from meeting those obligations by holding back some of the reports of accident investigations. If these are not to be addressed in a sensible way and quickly too, they could take us back to where we found ourselves in 2005 and 2006. Just last year, the government gave three years of life span to the debts owed by the private operators to the public operators. That was enough time for the government to run its time out of office and the circle of debt owing continues,” he added.
Ojikutu noted that government should use the opportunity its transformation agenda offers to now review the Nigerian civil aviation policy and give clear and sincere policy directives for regulating the economy of the sector as well as the commercial activities of the private and public operators for the benefits of Nigerians.
“What Nigerians are hearing always as policies are very unclear and unprogressive pronouncements such as airport modernisation, establishment of new national carriers, etc. These are areas where government has cut out for itself to spend money and where there would be no returns to government investment anyway, but to the well connected operators and political financiers in the long run. If government is not dolling out intervention fund to the public operators, evidently to cushion the burden of the debts owed by private operators, it is directing the public operators to give the private operators debt reliefs and sometimes outright cancellation. This manner of circulating public funds in secrecy cannot be sufficiently explained by the respective public agencies, the ministry, the accountant general or the auditor general of the Federation not even the NASS. In actual facts, these are leakages and part of the reasons why the public operators and agencies are not making profit to sustain their operations,” he further observed.
He noted that the liberalisation of the industry that started in early 90s was an explosion that got many private airlines registered, a number that was probably more by then, than the rest of the regional and continental private airlines.
“The business was so good then that some among them like the ADC airlines was alone carrying 23,000 to 25,000 passengers per month. All of a sudden, Nigeria Airways was visibly threatened by these new comers and the government was not seen, probably deliberate too, to be doing anything serious to address the unviable and inequitable type of the government liberalisation policy,” the aviation expert stated.
He however, cautioned government on its debt forgiveness policy, saying, “We need to be sure that it is not the inequitable behaviour of government intervention and debt forgiveness that we are cleverly extending to the operators of Heathrow airport on parking slots and to foreign airlines’ competitors on air fares for Nigerian private operators. These could be potential diplomatic dangers for the government. We were witnesses to how such behaviour played out sometimes ago when certain private airlines were directed by government to move out of the MMIA terminals and mandatorily moved to MM2, a terminal owned by another private operator against business practice.
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