Airlines face NCAA’s penalty next week over N22.2b debts
- Why over 100 airlines went into extinction in 20 years- Minister
From next week, air transport may be disrupted throughout Nigeria as the Nigerian Civil Aviation Authority (NAMA) has concluded plans to embark on recovery of over N22 billion owed the aviation agencies by many of the existing and defunct airlines spanning over 20 years.
The disclosure was made on Thursday by the Director-General of NCAA, Capt. Musa Nuhu in Abuja at stakeholders and general public hearing on the repeal and enactment of civil aviation bills of all the aviation agencies.
A visibly angry Nuhu said that was the only way to compel the airlines to pay debts owed. He decried the attitude of many of the airlines that failed to remit what they collected as five per cent Ticket Sales Charge (TSC) and Passenger Service Charge (PSC) collected on behalf of the agencies.
The Minister of Aviation, Hadi Sirika had on Monday in Abuja put the debts of Nigerian airlines over the last 10 years to aviation agencies at $6.9 million and N19.6 billion (N22.2 billion).
Nuhu said, “We are going to start taking action and implement actions to recover most of the monies. We have started action last week on airlines that owe us. The irony is that these are taxes the airlines collected from the passengers. These are not their money. They collected but refused to remit”.
“We have also heard that the government has refused to assist the carriers. We all remember that in 2011, the airlines received close to N200b. They are yet to pay back. If foreign airlines are not paying, why are our own airlines not paying?
Earlier, Sirika elaborated on some of the charges the carriers described as ‘too many’ and not in the interest of the carriers, saying these charges had been in existence for so long and enshrined in the country’s constitution.
He lamented the constant death of over 100 airlines in the last 20 years, attributing their demise to poor business plan, wrong use of aircraft that are fuel guzzling and cost inefficient.
Records made available by NCAA show that no fewer than 40 registered airlines, scheduled and non-scheduled, have collapsed in the last 15 years.
Among the carriers are Associated Aviation, Allied Air, Hak Air, Kabo Air, TAT Nigeria, Belview, Sossoliso, Chanchangi, Sky World Express, Virgin Nigeria, ADC, Concord Airlines, IRS and Okada Air.
The high turnover in mortality rate, perhaps a record in global aviation, is often blame on various reasons including unfriendly business environment, multiple charges, lack of government’s support, non-viable routes and low patronage.
Indeed, Nigeria has about 180 million population and one of the lowest air traffic demands by population. For instance, the air travel sector in 2019 transported a total of 15 million passengers, By implication, less than seven per cent of the population travel by air.
Fact is that at least 90 per cent of airplanes in commercial operations in the country are the B737 series, which is considered fuel inefficient and runs at a loss without 90 to 95 per cent load factor per flight.
The Minister gave an example of an airline that wanted approval to bring in four engine airplanes that other nations are doing away with.
“Most of these airlines; if you look at their business plan you would feel like crying. Most of these failed airlines have the same business plan. If you look at Aero Contractors that was successful for more than 50 years but they derailed when of poor business plan and we know where the airline is today. Many people you see today have no business in airline business.
Chairman, Senate Committee on Aviation, Smart Adeyemi sought to know what could be done to ensure reduction in cost of air travel.
Sirika interjected saying that it would involve the carriers operating the right type of aircraft, adding that some operators used go to acquire geriatric aircraft because they cost little but very expensive to maintain, stressing that after operating the airplanes for a short period they abandon them because huge cost of maintenance.
It costs at least N800,000 to N1million to fuel a Boeing 737 aircraft to do a frequency of two landings. If all you have as passengers are 20 persons going and 10 on the return with each paying N24, 000 for ticket (N720,000). It means that they are running at a loss on fuel alone.
Sirika further stated that, “I have seen somebody who lost $20 million even before he started. Before, we had the culture of flying turboprop aircraft, but today, Nigerians like to fly jet engine aircraft but it comes with a cost”.
Chief Executive Officer of Landover Aviation, Capt. Edward Boyo, stated that airlines are victims of hostile environment , noting that the Federal Government should look at bringing down the cost of airline operations to the barest minimum..
According to Boyo, “Airlines in Nigeria are suffering. Why are airlines dying in Nigeria? Over 100 airlines have dies over the last 20 years”.
Airlines, he said pay over 30 charges, alleging that these multiple charges have led to the death of the carriers, hinting that airlines operate on small margin of profit.
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