Aviation crises: Operators withdraw action on proposed shutdown
…Cite interest of national economy, security as reasons for reversal
…Increase in flight fares key to domestic airlines’ problems — Expert
Abimbola Abatta, Seun Ibiyemi, and Ariemu Ogaga
A few hours to the planned suspension of services across all airports in Nigeria, the association of airline operators has rescinded the decision.
Recall that last week, airline operators announced that they will shut down operations on Monday, May 9, due to high cost of aviation fuel and other operational costs.
Following the decision, Minister of Aviation, Hadi Sirika, had appealed to Nigerian airlines to suspend their planned shutdown of operations.
Mr Sirika made the appeal in a statement issued by his Special Assistant on Public Affairs, James Odaudu, on Saturday.
However, a statement on Sunday revealed that the association had suspended the decision, citing the interest of the national economy and security considerations as the reasons for suspending the proposed shutdown of operations.
The statement was jointly signed by the association’s President, Abdulmunaf Yunusa Sarina, and other members including the Executive Director, Max Air, Alhaji Shehu Wada; the Chairman, United Nigeria Airlines, Dr. Obiora Okonkwo; the CEO, Arik Air, Capt. Roy Ilegbodu; the CEO, Aero Contractors, Capt. Abdullahi Mahmood; the MD, Azman Air, Faisal Abdulmunaf, and Chairman, Air Peace, Barr. Allen Onyema.
According to the statement, “The Airline Operators of Nigeria (AON) wishes to inform the general public that further to numerous calls from the highest echelons in government with promises to urgently intervene in the crises being faced by airlines due to the astronomic and continuously rising cost of JetA1, that the AON has acceded to requests to withdraw the action for the time being while we allow for a fresh round of dialogue with the government in the hope of reaching an amicable solution.
“We have also reached this decision with the highest consideration for our esteemed customers who have been faced with uncertainty over the last few days and to enable them to have access to travel to their various destinations for the time being during the period of discussions with relevant authorities.
“In view of the above and in the interest of national economy and security considerations, AON hereby wishes to notify the general public that the earlier announced shutdown of operations on May 9, 2022 is hereby suspended in good fate pending the outcome of hopefully fruitful engagement with government.”
Meanwhile, barely 48 hours after the Airline operators of Nigeria, (AON) disclosed plans to shut down operations, Overland, Green Africa, Ibom Air, Dana Air, Aero Contractors and Arik Air revealed that they would continue with normal flight operations.
Nigerian NewsDirect reports that the six-member airlines increased flight fares from Lagos to Abuja, Owerri, Calabar, Port Harcourt, Enugu, Kano and Asaba by 100 per cent.
These airlines charged between N85,000 to N100,000 for one-hour flight which earlier cost N50,000.
Increase in flight fares key to domestic airlines’ problems — Expert
Reacting to the development, an Aviation Expert and Group Captain (Rtd), John Ojikutu, said the current imbroglio facing the Nigeria aviation industry is caused by lack of corporate governance by indigenous operators.
According to him, “I have always asked the question: have they put their grievances formally before the NCAA in compliance to the Nig CARs? They are selling just as the fuel marketers too are selling. I just heard today that Jet-A1 does not attract subsidies as other products so there is little to nothing the government can do to the fuel marketers.
“What can the government do for the domestic airlines after the recent intervention funds given on COVID-19; after the concessions on custom duties, VAT, over N300bn intervention to some of them in 2012, etc?
“I knew this was coming when there were political interferences by the NASS on handling charges and air fares. Nigeria CARs Part 18 says it all on what the operators should do when they find themselves in these price challenges and that includes the fuel marketers; did they approach the NCAA before the various fuel increases from N170 to N600? For me that is the way to start.
“It is more of a Nigerian problem than global. One question that I have asked is, will the foreign airlines stop flights operations to Nigeria? The answer has been No. Then what is our domestic airlines problem? Poor corporate governance.
“The foreign airlines are buying the fuel at N700 here because at dollar rate it is about the same price they buy it in their countries. Long before now I have repeatedly said that the air fares of about $50 or $60 at N550/$ rate our airlines are charging now for an average distance do not make economic sense when fuel is being imported and if about 30 years ago they were charging $100 at N40/$ when fuel was being refined in Nigeria. Our airlines are being spoon-fed almost every time we have internal economic crisis.
“In 2007, government agencies got intervention funds because of airlines recurring debts; in 2010, airlines got intervention funds because of recurring debts to banks; in 2020, airlines got intervention funds because of COVID-19; if they had credible business plans, they would have known that the fuel prices have not been stable in more than five years past from N170 to N200, N300, N500 and now N700 even when the fuel marketers were getting subsidies from government.
“For how long can the government be subsidising private business and enterprises with public funds? All they need to do is to increase fares if they want to remain in commercial aviation business except they want to provide humanitarian services otherwise they should take a walk out to the RICE Farm,” he said.
