The Director General of the Nigerian Civil Aviation Authority (NCAA), Capt. Musa Shuaibu Nuhu, said the nation’s aviation sector is facing a serious financial and economic crisis, the safety of the flying public is, however, not in any way compromised. Excerpt.
Two airlines—Aero Contractors and Dana—recently suspended their operations. What was the main issue that led to this development?
On Aero, we were conducting some financial and economic audits of some airlines and it is still ongoing. And when the results of Aero came out, the management of Aero came and sat down with us. They did a presentation. They are trying to reposition and restructure their company for more effective provision of services and they told us of their plan to suspend their operation voluntarily and we said okay. We are not here to kill any organisation. We are here to work with them and when they are done, they will come back to work with us and we will sit down and do any kind of assistance we can give them.
So Aero actually suspended operations based on their situation and they are trying to restructure. I must commend the management of Aero for taking that step. We did a technical audit of Aero with little or no findings. It shows that they operate safely and in compliance with all our regulations. Unfortunately, they have little financial problems that have been going on for a period of time.
So it is a good thing they decided to stop their operation to restructure and find other sources of financing for the organisation. It shows a serious management that is doing the right thing.
On Dana Air, we did the safety, financial and economic audit. It wasn’t so good. That can be fixed. But during investigations, we came across a serious violation that was of grave concern to us and for the safety of the public, we decided to stop their operations until these matters are resolved. This is still ongoing.
Please do not ask me for the details because we want to give the airline a fair chance to resolve their issues. As I said, we are not here to kill any airline. We are here to work with everybody to ensure that we provide safe, secure and efficient services to the travelling public.
Airlines are afraid they could shut down due to the rise in the price of Jet A1. What is NCAA doing on this?
Yes it is a very critical and important thing happening to the industry; not only the reported shortage but the rising cost of our aviation fuel, making it the largest component of the direct operating cost of any airline.
Of course, it is of serious concern to us and in addition to the efforts made by the National Assembly, I am quite aware that the minister of Aviation, Senator Hadi Sirika, has stepped into that. Some days ago, AON met with him in Abuja. I believe they went to the Ministry of Finance on the issue of forex both for the airlines and also for the importation of fuel.
So efforts are being made all round to see how some forms of alleviation can be brought to the airlines for the sustainability of their operations.
It is truly a pathetic picture. We do not refine Jet A1 in Nigeria, it is all imported and the conflict in Ukraine has brought about a sudden increase in the price of Jet A1 internationally, which is priced in dollar terms. At the same time as the dollar price of Jet A1 is increasing, the naira is getting devalued. So it is double jeopardy for the airlines. The dollar component of their operations is increasing and they get their revenue in naira, while at the same time, the dollar is not even readily available. So it makes it a huge problem for the industry.
What we are facing now is a financial and economic crisis in the aviation industry while the relevant bodies, headed by the minister of aviation and members of the aviation committees in the Senate and House of Representatives, are working with relevant organisations – the NNPC to resolve this matter. So all hands are on deck to resolve it.
We cannot treat this issue absolutely in isolation from the economic environment of the country. What is happening to aviation is happening to all sectors. But I understand air transportation has become very critical for Nigerians now because it is becoming the only means of transportation due to the challenges of travelling by road.
Also, air transportation deals with the lives of human beings…and we cannot quantify the lives of human beings. So we do all our best to ensure that despite the challenging difficulties, we prioritise safety. At this point in time, safety comes before any other consideration.
The airlines are seeking for a review or waiver on some of the charges they pay like the 5 per cent ticket sale charge (TSC). Are you looking into this?
Well, the airlines are looking for a way of survival and like I said, we will always work with them. But the 5 per cent TSC is an Act of the National Assembly, signed by Mr. President into law, built into the Civil Aviation Act. So I do not have the authority to change that. I cannot change what the National Assembly has passed and Mr. President has signed into law. We can look at other areas we can assist but what is in the Act, only the National Assembly and Mr. President can effect changes in that.
But we will sit down with them (airlines) soon and look at other ways where we can have some kind of flexibility without compromising safety.
Like I keep saying, safety is paramount to us. Anything that affects safety, there would be no compromise whatsoever. I will rather shut down an airline than allow it to operate unsafely. It is better to have inconveniences, passengers getting angry and saying all sorts of things than having an unfortunate accident or incident. It is a very difficult situation but all parties are on top of it.
How financially stable are the other eight operating airlines?
We are currently conducting a financial and economic audit of the airlines. Right now, we are doing three airlines. We are going to be doing them in batches, and we will sit down and discuss with their management the way forward.