Despite the challenges thrown up by the coronavirus pandemic which induced serious economic setbacks, Nigeria’s aviation sector is seeing a boom in new carriers into the industry.
According to thewillnigeria.com, in the past two years, more airline start-ups have continued to join the league of domestic operators in the country. Records from the apex aviation regulatory agency, the Nigerian Civil Aviation Authority (NCAA) have shown that many airlines are coming into operation, going by the numerous Air Operator’s Certificates (AOCs) applications being processed by the agency.
Scramble For AOCs
An AOC is the approval granted by a National Aviation Authority (NAA) to an aircraft operator to allow it to use aircraft for commercial purposes. This requires the operator to have personnel, assets and systems in place to ensure the safety of its employees and the general public.
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THEWILL investigation shows that as at August 2021, there are no fewer than 25 airlines seeking AOCs from the NCAA, notwithstanding the impact of the COVID-19 pandemic that has seen many countries lose viable airlines.
As at the moment, there are about 10 operating commercial airlines. They include: Aero Contractors, Air Peace, Arik Air, Azman Air, Dana Air, Ibom Air, Max Air, Overland Airways, United Nigeria Airlines and Green Africa. This is in addition to potentially 25 other carriers which would increase the number of the total number of airlines in the country.
The Controversies
Disturbed by the difficulties they experience, most operators have recently called on the NCAA to review the process of operating an AOC by airline owners.
While delivering his welcome address at the just concluded League of Airports and Aviation Correspondents, LAAC, 25th Conference in Lagos, the Chairman, West-link Airlines, Captain Ibrahim Mshelia, said there was need for the regulator to review policies and regulations that were stifling the growth and development of the aviation industry.
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He said the frequency at which operators were renewing their AOCs constituted a heavy financial burden on the airline operators, adding that the issuance and renewal process was cumbersome.
He further said that with the ”lopsidedness in the procurement procedures and the operational limits of AOC holders in Nigeria”, there was an urgent need to amend the Act and policy in order to empower the Nigerian Civil aAviation Authority to also break down the certification process of the airlines’ commercial operations.
Mshelia said, “The word AOC has been so over-valued like a village masquerade that appears once in five years. This is not supposed to be so. Operation specification, in this regard, is the masquerade and not the certificate.”
He therefore proposed that the AOC should have ”no expiry date unless suspended or revoked while the operation specification only should have a biannual expiry date to shed unnecessary expenses to the operators.”
“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, are recognised.”
Speaking also at the conference, the Vice Chairman, Airline Operators of Nigeria, (AON) Mr. Allen Onyema said policies and regulations also contributed to the failures of airlines, aside from poor management.
Onyema said there were several problems confronting the aviation industry, but the present government is addressing many of them.
“Government policies in recent time have been better, compared to what we had in the past. The present government has done well in the area of policy, such as customs duty waiver on aircraft spare parts and VAT and others that are favourable to the airlines,” he said.
But Nuhu has assured that the regulatory body will not compromise in the enforcement of safety standards and regulatory requirements in conformity with all regulatory requirements and Standards and Recommended Practices (SARPs) in the initial issuance and renewal of all Air Operators Certificate (AOC).
The assurance is coming on the heels of allegations by some airlines against the NCAA over failure to renew their AOCs.
Captain Nuhu, in a statement, emphasises that the NCAA will continue to operate within its mandate, as regards issuance of the AOC, irrespective of the personality or organisation involved for the safe, secure and efficiency of the industry as enshrined in the 2006 Civil Aviation ACT.
Explaining further, Captain Nuhu states that the 5 Phase AOC process, both initial and renewal is not peculiar to Nigeria as it is the International Civil Aviation Authority (ICAO) requirement Annex 6 Parts I and III and ICAO Document 8335, which is captured in Nigeria Civil Aviation Regulations, Nig.CARS 2015 Part 9 on AOC certification.
The NCAA helmsman calls on all stakeholders to join hands with the NCAA for the benefit of the nation and stresses that the NCAA is a partner in progress rather than the proverbial industry policeman.
He states that the authority is ready and willing to work with all parties to resolve any challenge or difficulty they may face as it has already done.
Low Profit Margin For Airlines
Airlines are a very complex business, with the added fact that they are a very low-margin operation. Before ancillary revenue, a typical airline’s bottom line was maybe less than 4 per cent of its gross revenue.
Following a dramatic increase in 2015, the Earnings Before Interest and Taxes (EBIT) margin of commercial airlines have been falling, with the combined margin for all global airlines projected to be 5.5 percent in 2020 before the Coronavirus pandemic.
