Africa: Highs, lows of Nigeria’s aviation industry in 2019

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Although most aviation stakeholders would look at 2019 with mixed feelings of the highs and lows, one of the high points of the year remains the fact that Nigeria’s airspace would adjudged safe as there was no recorded case of plane crash or fatalities.

Some of the key issues in the industry could be traced to 2016 which heralded the announcement that the country ascended to Level 3 State Safety Programme (SSP) Implementation Process.

Industry chronicles
Captain Musa Nuhu was appointed the new Director General of the Nigerian Civil Aviation Authority (NCAA) to replace Captain Muthar Usman. Until his appointment, Nuhu was Nigeria’s permanent representative to the International Civil Aviation Organisation (ICAO).

Another milestone was the signing of a contract for three additional E195-E2s by Air Peace, confirming purchase rights from the original contract, signed in April this year. With the new signing at the Dubai Airshow, Air Peace made total firm order of 13 E195-E2s with 17 purchase rights for the same model, which would be delivered in May next year.

These new E195-E2s will be included in Embraer’s 2019 fourth-quarter backlog valued at $212.6 million, based on Embraer’s current list prices. The April signing made Air Peace the first launch customer of the new brand of E-jets in Africa and launch customer of the brand of business class configuration for its ordered airplanes worldwide.

Another high point was the Nigerian Aviation Handling Company Plc (NAHCO aviance) generating a record N7.38billion for the nine- month period ended September 30, 2019 and a Profit After Tax that rose 30 percent compared to the same period in 2018. The company’s performance released to the Nigerian Stock Exchange (NSE) showed that NAHCO posted a Profit Before Tax of 973.1 million for the Q3 ended September 30, 2019.

This figure is N241.3million higher than the amount for the same period last year, representing a 32.96 percent increase over the same period last year. Profit After Tax which stood at N782 million for the nine-month period compared favourably with the N601.31 million recorded for the same period in 2018.

Earnings per share stood at 48kobo as at the end of the third quarter of 2019 compared to 37kobo as earnings per share as at the end of the third quarter of 2018.

However, one major event that drew global attention in the Nigerian aviation industry in 2019 was the Federal Government’s collaboration with Air Peace to evacuate about 502 Nigerian citizens from South Africa following a wave of xenophobic attacks against them. Air Peace flight APK 7818, Boeing 777 aircraft with registration 5N-BWI, evacuated Nigerians who had shown willingness to leave the country following the destruction of lives and property.

Although the South African government initially denied Air Peace the rights to land at the OR Tambo International Airport, Johannesburg, it later gave the airline permit to evacuate the first and second batches of Nigerians.

Again, the ongoing rehabilitation of the Akanu Ibiam International Airport, Enugu also stood out as one of the highpoints of events in the industry following what many saw as highwire politicking over the project. But at the end of the drama, the Federal Government approved the reconstruction of the dilapidated runway and mobilised contractors to site.

Meanwhile some of the nation’s fast growing domestic operators including Azman Air, Dana Airline and Air Peace, the outgoing year was one that saw them expand their network with some new routes added to their domestic reach.

On the Bayelsa International Airport, the Nigerian Civil Aviation Authority (NCAA) revealed that the N600 billion aerodrome which was opened on February 15, 2019 with an inaugural flight, may not operate until it resolves pending International Civil Aviation Organisation (ICAO) security requirements.

The Acting Director General of the NCAA, Capt. Abdullahi Sidi, said the lack of a perimeter fence around the airport was the reason it is yet to operate flights like other aerodromes and that the regulator’s decision on the Bayelsa facility has nothing to do with politics. He said a perimeter fencing around the airport is a non-negotiable security feature for the airport’s functionality and until the issue is resolved, the airport will remain closed.

He also said the country is looking forward to the certification of the Port Harcourt International Airport and the Malam Aminu Kano International Airport (MAKIA) after the 2017 certification of both the Murtala Muhammed International Airport, Lagos and the Nnamdi Azikiwe International Airport, Abuja.

Another low point was the indictment of Air Peace CEO, Allen Onyema for bank fraud and money laundering by the American authorities. The United States Department of Justice, Attorney’s Office, Northern District of Georgia charged Onyema of money laundering and falsifying documents along with his airline’s Chief of Administration and Finance, Ejiroghene Eghagha.

Both were accused of moving more than $20million from Nigeria through US banks in a scheme ‘involving false documents based on the purchase of airplanes”. Onyema was charged with 27 counts of money laundering and Eghagha was charged with one count of aggravated identity theft. The two Air Peace chiefs were investigated by the US Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Federal Aviation Administration, Department of Commerce, and Department of Treasury.

Onyema denied any wrongdoing, saying the allegations were false and that the US government will find no dirt because he has never conducted business with any illegalities. He said he has never laundered money no committed bank fraud anywhere in the world as all the funds transferred to the US for aircraft purchase went through the Central Bank of Nigeria LC regime and all were used for the same purpose.

Another low point was the protest by airport workers over the planned concession of the Federal Government. The Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) threatened to resist any attempt by any concessionaire to take over the revenue points at the Lagos and Abuja airports.

They argued that rather than hastily hand over all the revenue points to a concessionaire, the Federal Airport Authority of Nigeria (FAAN) should allow the association operate the access gates for a period of three months and if the target is not met, it can now go ahead with the concession plans.

Unrealised expectations
National carrier: The take-off of a new national carrier has been put on hold as there has been no significant progress following the inability to get foreign investors to take up about 95 per cent equity in the proposed airline. This however prompted the Managing Director of Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, to propose that Arik Air be converted into a national carrier. But his advice was turned down by the Minister for Aviation, Captain Hadi Sirika, who picked holes in the proposal.

But observers have argued that the country is losing about N500million annually in capital flights to foreign airlines to due absence of a national carrier.

Maintenance Repair Overhaul (MRO) hanger:
Despite its population and size of its economy, Nigeria still lacks a functional MRO hanger. The need for this facility cannot be overstated given that Nigerian airlines, presidential fleet, Nigerian Air Force and the Nigerian Police spend an estimated $2.5 billion annually on C-check and other levels of aircraft maintenance overseas.

The establishment of an MRO was part of Buhari’s government plan for the aviation industry which was launched in 2016. Sadly, this plan like many others is yet to see the light of the day three years after it was promised. The absence of an MRO translates into high cost of aircraft maintenance on local airlines, a trend that is responsible for the short lifespan of Nigerian carriers averaging 10 years. The establishment of an MRO therefore comes as the second most important need for the industry that must be addressed by Buhari in his second term.

By Chinelo Obogo

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