Aviation sector dying, private jets market booming

The Nation newspaper

With barely four functional airlines and less than 20 aircraft serving about 160 million Nigerians, the elite and government officials embrace private jets and chartered flights as the solution to the nation’s ailing aviation industry, OLUKAYODE THOMAS, PAUL UKPABIO, INNOCENT DURU and KELVIN OKUBOR report.

Until recently, Nigerians could count on their fingers members of this exclusive club. They included oil companies, the Presidency and some individuals. But not anymore. Nigerians are losing count of their country men who own private jets. Governors, politicians, legislators, religious leaders and top executives in telecommunications and banking own jets. Those who do not own jets travel on chartered flights.
The brand of plane the elite and government officials love include, but is not limited to, Hawker Siddley 125-800 and 900XP, Gulfstream 450, 550 and 650; Bombardier Challenger 604, 605; Global Express; Embraer Legacy and Falcons.
Aviation experts and industry watchers are not at one on the number of private jets in Nigeria today. While some claim it is over 200, many believe that figure is an exaggeration. A foreign magazine, Forbes, recently claimed that in the last five years, Nigerians may have spent about $6.5 billion or more buying private jets, and that there are more private jets in Nigeria than even comparatively richer African countries, such as South Africa, Egypt and others.
Forbes revealed that the craze for private jets rose by 650 per cent between 2007 and 2012. As at 2007, there were just about 20 private jets in Nigeria, but as of today, there are about 200. Forbes claims that Nigeria is one of the fastest growing private jets markets.
But for Nigerian Civil Aviation Authority (NCAA), the figure being peddled by Forbes or any other medium is not right. They revealed that only 77 private jets are operating in Nigeria, and 67 of the jets are not registered in Nigeria.
NCAA spokesman Sam Adurogboye said: “Basically, we have 10 privately owned jets owned by Nigerians that are registered. We equally have 67 that are foreign registered. What this means is that they are bought overseas and registered there. Nigerian registered has to do with those jets that are on the register of aircraft maintained by the Nigerian Civil Aviation Authority. It follows, therefore, that those are the aircraft that you have oversight authority over. By oversight, I mean regulatory functions that determine whether it is fit to fly, whether it is fit to be brought into the country, whether it is fit to be operated at all in your airspace. Every country has its registration mark for its aircraft. It is allotted by International Civil Aviation Organisation. No country has two numbers, it is just one.”
Adurogboye said he “cannot say whether the 67 foreign aircraft” are owned by Nigerians or not. “When people buy airplanes, often times they don’t buy it directly as individuals. People buy aircraft through an agent, usually a company. That is the position of the law. Like I said earlier, you buy through a firm that will charge you because it is in business to make profit. Our business is not to find out the owner of any aircraft. It is bought by a third party as it is known to the law and it is registered with NCAA in the name of the firm. There is nowhere in NCAA records where you will see the name of an individual as the owner of any aircraft.”
Nigerian owned jets with foreign registration
However, a highly placed aviation officer confided in The Nation that many public office holders own most of the private jets registered abroad. He said the trend is to prevent them from being linked to the ownership of such airplanes.
The Managing Director of Aero Airlines, Captain Akin George, has condemned the increasing number of private jets being parked at most of the aprons of Nigerian airports. He was particularly piqued that most of the private jets carry foreign registration credentials rather than Nigerian registration. The decision to register the jets in foreign countries, particularly in South Africa, is said to be informed by the notion that in case the owners want to resell the jets, they would warrant a bigger value from buyers.
George urged the authorities to make registration in Nigeria friendly and attractive. He said all the aircraft in Nigeria were registered in company’s names rather than private names.
Governors need jets
Outrage continues to trail the recent acquisition of jets by Akwa Ibom Governor Godswill Akpabio and Rivers State Governor Rotimi Amaechi. Akpabio reportedly bought a Gulfstream jet manufactured in 2011 for $45 million in July 2012. The plane registration number is N224BH. This was confirmed by the state’s spokesman Aniekan Ummanah, who insisted that it is Akwa Ibom State property.
Amaechi, on October 7, took delivery of a Bombardier Global 5000 (N565RS). The jet cost $45.7 million. The state’s former aircraft, a Dash 8-Q200 aircraft, was sold to Cross River State for $6 million.
A Port Harcourt-based human rights campaigner described the vogue as “ungodly”. But Rivers State Information Commissioner Mrs. Ibim Semenitari told reporters the plane was paid for “two years ago”.
She added: “The reason is for safety. The new aircraft is a much safer one.”
Semenitari revealed that expert advice was sought before the purchase and that the Rivers State House of Assembly approved the purchase.
If Akpabio and Amaechi merely acquired jets to be ferried around in, Taraba State Governor Danbaba Suntai not only acquired one, he had enough time to combine governance with studies as a pilot. He qualified as a private pilot from the Nigerian College of Aviation Technology (NCAT) Zaria in August 2010.
Recently, the pilot-governor crashed at Ngulore village, 10 kilometres to Yola International Airport. Suntai was piloting a Cessna 208 aircraft, with registration number, 5N-BMJ. The governor and his aides are undergoing treatment in Germany.
House of Representatives member representing Zuru/Fakai/Zakaba/ Dawazagu Federal Constituency of Kebbi State, Bala Ibn Na’Allah, who is reported to have sold Suntai’s first plane to him, recently justified the acquisition of private planes by the elite.
He said: “Since I took delivery of my aircraft, it showed that it is far cheaper to maintain than maintaining my cars. A return flight from Abuja to Zuru, my village, costs me 50 litres of petrol, whereas my jeep consumes over 200 litres.”
Na’Allah added that it is cheaper to maintain a plane than the latest models of cars and Sports Utility Vehicles. He said: “To service it after a mandatory 50-hour flight, which is the equivalent of servicing a car, costs less than N50, 000. And for maintenance, the retainership fee with Aviation Maintenance Organisation (AMO) per annum is about N200, 000.”
He revealed that his C-172 aircraft manufactured in 1971 cost him about $48,000 to acquire.
“In all, you will see that it is very cheap to maintain these aircraft than to maintain the latest car in the market. I think if people know that it is cheaper to acquire and maintain a small aircraft, like my own, many Nigerians would not hesitate to get one today, than the craze for buying flashy cars, with armed robbers trailing you, not to talk of bad roads and frequent car crashes will reduce,” he said.

Chartered flights booming
For elite and government officials, especially governors, who could not acquire private jets probably because of public outrage, the next level is chartered air planes.
Aviation sources put the cost of a trip between N4million and N7 million.
In 2011 alone, statistics revealed that Nigerians spent roughly N29.7bn on chartered flights. According to NCAA and FAAN data, an average of 50 jets was chartered daily in 2011. NCAA Director-General, Dr. Harold Demuren, confirmed this in a recent public lecture.
Preferred charter operators include Kings Airlines, Associated Airlines, Top Brazz Aviation, Wings Aviation, Associated Airlines, Overland Airways, Arik Air, Vistajet, Aero Contractors, Caverton Helicopters, OAS Helicopters, Bristow Helicopters and Pan African Airlines.
No, yes to private jets,
chartered flights
Lagos lawyer Festus Keyamo has described the development as waste of public funds. He said: “This is a colossal waste of public fund. It is absolutely obscene and distasteful and a classic case of misplaced priorities for state governors to acquire private jets at this present time. By placing the said private jets or airplanes in the hands of private managers, is also an avenue for fraud. It cannot be a source of revenue enough for a state to recover that kind of capital. That kind of income can never be in commensuration with such investment especially in this very situation and time when people are hungry in the state. It is not commensurate.
“There are a lot of commercial jets in Nigeria for any state governor or government to move around in. They should return the private jets to where they got them from, recover the money and use it for projects that will really affect the lives of people in their states positively.”
Another lawyer, Mohammed Fawehinmi, agrees with Keyamo. He said: “Governors or state governments are not presently considering the economic situation of the country to justify acquiring private jets. I will implore Nigerians to be asking questions collectively and stop hailing these people. The money used to acquire those private jets is meant for development projects that should benefit the citizenry of each state. Unfortunately, the governors now use such monies to buy jets and some people are hailing them and wanting to be like the governors, creating more problems for the citizens of those states.”
For Senior Advocate of Nigeria, Chief Mike Ozekhome, it is unfair to say governors have private jets because the jets are owned by their states. He said: “I do not like the word private because it suggests that it belongs exclusively to the governor in question. If it is an aircraft purchased for a state to ease movement of the governor and government officials for official duties, I do not see anything wrong with that because at the end of the day, it could be more protected and viable.
Many times, when these governors are travelling abroad, they go with First Class tickets, sometimes they go with up to 10 Commissioners, 10 advisers and even with their wives who may also go with their hangers-on. So some governors go on a trip with 30 or 40 people. By the time you pay for first class and business class tickets for such a large number of people, you find out that money of the state is being drained in a very drastic and shameless manner. On the other hand, if government acquires a jet for the state and it is the property of the state like governor Odili, former Governor of Rivers State once did for his state, then it is viable. And to the best of my knowledge, the jet was being used long after he had left Government House.”
Aviation expert, Captain Dele Ore, said for states that are not linked by commercial flights, there is nothing wrong with such states acquiring jets. He said: “Every state has its own peculiarities. And there are states that are not properly linked by the commercial airlines. And so it makes commuting from such places to Abuja or Lagos, which is a commercial centre, difficult for the officials, therefore creating a need for an aircraft to be designated to belong to such a state for ease of governance because of the need to commute to the federal capital, without first of all going to Lagos.”
He added that what should be worried about is whether the jets were acquired after due process has been followed.
“We should not be against the use of aircrafts if they are used to develop and train the people of the state and ease government officials’ transportation as long as they have capacity to buy and maintain because some people can say that they cannot even feed themselves and so on. But if it helps the governor to go to Abuja and in a few hours he is back in the state instead of spending two extra days on the road, it saves delay in government duties and these same aircrafts might also be used for medical evacuation and such emergencies. So it depends on what studies they made and arrived at in such states. As a blanket cover to condemn state governors buying jets, I don’t share that view. It is not all governors that you can fault; there are genuine needs in some places.”

Commercial airlines moribund
While the elite and top government officials continue to acquire jets, the nation’s commercial airlines continue its fast march to the morgue.
In the last few years, about ten commercial airlines have died. Only Arik Airline, Aero Contractors, IRS and Overland seem to be in the air, and the number of flights they operate is grossly inadequate.
Because there are more Nigerians chasing the few planes, operators not only charge exorbitant prices, with an hour flight sometimes costing as much as N35,000, one of the highest in the world. Passengers are most times delayed at the airports for hours; flights are cancelled without genuine excuses and getting a refund is a herculean task.
Commercial airline operators reportedly owe banks about N250 billion. Recently, the Central Bank of Nigeria (CBN) placed a ban on further loan to commercial flight operators to prevent further escalation of their debts.
So critical is the situation of the industry that the Federal Government is proposing a new intervention fund for the aviation industry.
Aviation Minister Stella Oduah said: “We wanted a direct growth for a better impact than what we currently have in place and our strategy to utilising it is to have a tripartite, triangular if you like, system where the CBN with the approval of the Ministry of Finance pays directly to aircraft manufacturers of the leasing company. The leasing company would in turn bring the aircraft to our airline operators. The airline operators would now have access to brand new aircraft, if not brand new, but relatively brand new aircraft. You and the passengers will have access to functional airline that can take you to where you want to go safely and aviation remains the preferred mode of transportation.
“Aviation is pivotal to the growth of key economic sectors, such as travel and tourism, agriculture production and distribution, rural development, trade and commerce, manufacturing and other non-oil sectors, which are critical to economic transformation of any nation. The value chain of creation by aviation is enormous. In order to reposition the Nigerian aviation sector for this role, we consulted widely with industry stakeholders and relevant ministries, departments and agencies to develop a common mission and vision.”