Delisting: Huge costs, ‘reputational burden’

All is not lost with the delisting of Nigeria from category one US aviation status. The designated carriers to the US have an uphill task of reclaiming it for the country. They can still operate to America but at a higher cost. It appears tricky and very expensive, writes, WOLE SHADARE

Hope not lost

 It may not be a death sentence, but the road to retaining category one looks tough. Airlines are in a precarious situation. The delisting of Nigeria from the Federal Aviation Administration (FAA) category one aviation status came to many stakeholders as a rude shock and to some as long expected.

The delisting of Nigeria from the FAA category one status has nothing to do with any safety or security deficiency in the country’s oversight system.

For a clearer understanding of the whole scenario, Nigeria has undergone comprehensive International Civil Aviation Organisation (ICAO) Safety and Security Audits. It recorded no Significant Safety Concern (SSC) or Significant Security Concern (SSeC) respectively.

If anything, this provision gives states complete and exclusive sovereignty over the airspace above their territories.

NCAA reacts

The Acting Director-General of Nigeria Civil Aviation Authority (NCAA), Capt. Chris Najomo disclosed that the reason for the delisting was simply because no Nigerian operator has provided service into the United States using a Nigerian-registered aircraft within the two years preceding September 2022, adding that it was expected that Nigeria would be de-listed as were other countries that fell within this category.

Consequently, Nigeria he reiterated was therefore de-listed in 2022 and was duly informed of this action in 2022.

The argument now is what becomes the fate of Nigerian carriers that were designated on the US route but are yet to operate, signposting very tough hurdles for them now except they go lease aircraft from a category one rated country which will most likely be three or four times higher than directly owing their airplanes and operating with their crew rather than wet-lease options that drains their resources.

Burden

Nigerian carriers are reeling under the heavy yoke. Virtually all the airlines in the country are said to be on life support.

The huge cost of an audit as required by carriers willing to operate to the US is humungous and one which runs into millions of dollars according to experts as the airlines are bound to shoulder the cost just the same way Arik did when it was used as the ‘Guinea pig’ for achieving category one.

Not a few believed that Arik did not do it for a reason. The carrier was desirous of operating to the US at that time and very logical that they spent so much to enable them to get the chance to do so.

The more delays or encumbrances due to the delisting and the rigorous audit they are required to undergo makes it extremely difficult at this particular time to think about reciprocity under the US-Nigeria ‘Open Skies’ agreement.

Binding category one rule

An IASA category one rating means that a country has the laws and regulations necessary to oversee air carriers following minimum international standards and that its civil aviation authority equivalent to the FAA for aviation safety matters meets international standards for technical expertise, trained personnel, record-keeping and inspection procedures.

The U.S.-Nigeria Air Transport Agreement, which has been provisionally applied since 2000, entered into force on May 13, 2024.

This bilateral agreement establishes a modern civil aviation relationship with Nigeria consistent with U.S. Open Skies international aviation policy and with commitments to high standards of aviation safety and security.

The agreement includes provisions that allow for unrestricted capacity and frequency of services, open route rights, a liberal charter regime, and open code-sharing opportunities.

No Nigerian carrier has operated to the US since Arik Air ceased operations to New York on February 3, 2017.

The blow occasioned by the action of the FAA to delist Nigeria further puts the designated carriers, Air Peace and United Nigeria to Washington and Houston respectively fate in the balance just as the fanfare that trailed Air Peace’s operations to the US may have cooled off at least for now.

Unforced error

The implication is that the American carrier, Delta and United Airlines would continue to operate to Nigeria unchallenged for now because the two carriers have met all the requirements of NCAA to continue to operate to the country.

This has further highlighted the gulf between Nigeria and the United States and by extension, the two carriers, United and Delta which have the enormous resources and capacity to offer seamless flight services between both US and Nigeria.

Experts’ views

Chief Executive Consult, Mr. Chris Azu Aligbe further clarified that the delisting of Nigeria from the category one status has nothing to do with the aviation regulatory body of Nigeria.

He said, ‘It is not that the NCAA has defaulted or whatever. No, it is not. For people who go about thinking that we have come to this place because of other issues, it is not true. It is a regulation that came in February 2013, but it became operational in April 2013. There are conditions. There are about eight conditions they will look at. The fact is, if they are not operating, they will not be satisfied that they are is in good shape, that the airline or the country is in good shape.”

“It was in 2013 that this regulation came out that the FAA said if a country’s airline is not operating in the United States or does not have a codeshare arrangement with any U.S. airline for a certain number of years – three years, four years – they will delist that country because what they look at is a continuous safety record of a country.”

“That is the fundamental situation. So it is not that at a point in time, you call for this audit. No, you don’t call for certification of a Cat 1 when you are not operating or when you don’t have one. That is the law. It has nothing to do with somebody being laid back. The NCAA was not laid back”.

He explained that the only way Nigerian carriers can operate to the US as a delisted country from category one nation is if an airline from that country is operating to the U.S. or has a codeshare arrangement with another U.S. airline.

“When that is happening, they know they are in a position to continuously monitor it. But when that doesn’t happen, then they downgrade the country. So, it is not that the country has done anything.”

Aligbe further stated that it is only the carriers who would be in a position to tell Nigerians the reasons they have not utilized their designation, reiterating, “That is the fat of the matter”.

The aviation consultant further noted that the issue of operating into the U.S. has been a long-standing thing since Nigeria and America signed the Open Skies Agreement in 2000.

The U.S. gave Nigeria five years to start to operate before they started operating. U.S. airlines didn’t come into Nigeria. It was after five years, six years before they came in.

“So airlines have been designated, but they have not been able to operate. They will be able to tell you, this is why we can’t operate or we have not started operation. It’s not any aeropolitics. It’s a standard rule that applies to every country. It’s not just Nigeria. It’s our failure. We cannot, because of our failure, hold the other people or hold another country down”, he added.

Chief Executive Officer of West Link Airlines, Capt. Ibrahim Msheilla said the requirement for category becomes necessary when a carrier wishes to fly to the U.S., stressing that it has nothing to do with the CAA of that country.

The CAA of each country according to him goes through the Internal Civil Aviation Organisation (ICAO) audit from time to time whether their carriers intend to go to the US or not.

“Arik wanted to fly to the US and the audit had to be done. So, the bill became Arik’s problem. I bet it is the same for other countries. Someone leads the way for others to benefit. If we had another carrier then who wanted to fly to the USA and our agreement allows it, so be it.”

A chieftain of Aviation Round Table (ART), Mr. Olumide Ohunayo said, “We are delisted and not downgraded. We might now be downgraded if we do not prepare ourselves well. This time around, not like the ICAO audit they deal with the government’s institutional agencies, the airlines that will be operating into the US will also be part of this audit process. If the airline fails to meet up with all the bars as indicated in the audit listing, it will affect the rating irrespective of how well the other institutions perform.”

He advised that there is the need to work together with airlines designated to see it as Nigeria’s flag for that route and must have all the necessary support and supervision to ensure that the country does not blow it up and reduce the burden.

“If at the end of the day, the delisting turns to downgrade, we would now have to start the process all over again and you would have to lease aircraft from a country with category one or ask to use a second country as stopover like they did to Nigeria Airways to go and stop in Dakar before proceeding to the US which was at an extra cost and disadvantage when you look at your competitor from the other country operating directly.

“These are the things we need to put in place to ensure that the delisting does not turn into a downgrade. For me, I see delisting as a blessing in disguise and having enough time to prepare ourselves for the audit that is imminent and inevitable”.

Last line

Nigeria still has an opportunity to correct issues that brought it to where it is today in terms of delisting from category one status. Experts want the country and airlines to mobilize support, especially for the designated carriers. They seem to be racing against time!

Wole Shadare