Interrogating NCAA’s six aircraft policy for start-ups, existing carriers

The new six-aircraft policy of the NCAA for start-ups and existing carriers could set the stage for more problems and erode gains made over the years. Emirates which has over 400 airplanes today started with two airplanes. Ethiopian Airlines which has become a success story in Africa started with just two airplanes to have over 150 aircraft in its fleet. The new policy which is expected to commence in 2025 is anti-aviation development, writes, WOLE SHADARE

 Exercising its powers

The Nigerian Civil Aviation Authority (NCAA) is the aviation regulatory body. Its powers are enormous coupled with the fact that the powers it wields are enormous and rightly so because of the sensitive nature of the sector.

The recent pronouncement by the Director-General of NCAA, Capt. Musa Nuhu that a new regulation to make new entrants and already existing ones to have at least six aircraft in their fleet has been met with condemnations and criticisms.

Divergent views

While some have backed the NCAA with its policy, the majority of experts said the requirement was anti-business and one that could undo the sector.

Yes for those in support of what the agency has tried to come up with saying Nigerian airlines need to consolidate and grow the critical mass than what it is today but others have stated that critical mass is not that required when the traffic has not improved significantly but marginally to warrant acquiring airlines that would be redundant.

Solving capacity problems

Yes, the NCAA in its wisdom feels that an airline having six aircraft in its fleet would help solve the problem of lack of capacity. Many airlines are weak and struggling financially, hence, the new regulation that airlines must have a minimum of six aircraft to be allowed to operate calls for a second look. This new rule is a killer.

Nuhu while making this pronouncement two months ago said before the new policy, airlines could start flight service with only two aircraft and the consequence of the policy then was that if one aircraft broke down, the airline would be left with only one aircraft and according to the regulation, an airline that owns only one aircraft cannot operate schedule service.

He noted that the decision to increase the minimum equipment to six aircraft is to overcome the problem of lack of capacity.

According to him, “The problem is that a lot of the airlines don’t even have the capacity to meet current financial obligations. If you have three aircraft for instance and you lose one out of it, it has become a problem to meet up with your operations. Then, you start to have issues with flight delays, cancellations, and all that.

“The number of aircraft you will have will depend on the kind of operations you want to do. You can imagine somebody who comes in with just one or two aircraft and one of the aircraft goes out of business and sells tickets to the passengers, think of what will happen. For you to have six aircraft, it shows you have very strong financial backgrounds of running an airline,” Nuhu said.

Interrogating the policy

Without interfering with the job of the regulatory body, it is proper to interrogate the new policy of the NCAA and to see whether it is in tandem with global practice or just another obstacle put in the way of the airlines to further destroy their operations and make life very difficult for them.

The carriers are bleeding and not a few believe that this new policy to say the least is wicked and one not to encourage civil aviation in the country.

Before now, start-ups were required to come up with three airplanes for a start and grow with time and the operations expanded. Of what up is an airline bringing six airplanes when it actually needs just three or four to manage its operations as it grows?

The number of aircraft an airline wants to operate with should depend on the size of its operation. It makes no sense for an airline that operates three routes to have six airplanes.

Capacity without growth

The DG in his pronouncement disclosed that the reason for the new six aircraft policy was because of lack of capacity. How many seats are the airlines selling to require more capacity? Most times, airlines operate near empty of major routes outside the early morning and late evening flights.

The reasons for flight delays and cancellations are not because the airlines do not have the capacity for their customers but because of many factors such as inadequate infrastructure, weather, VIP movements, and general lack of planning by the carriers. The NCAA is expected to address these challenges.

Air Peace for instance has over 30 airplanes (Although, some are grounded and could be seen on the ground rather than in the skies) and that has not solved the problem of flight delays and cancellations. If anything, the airline’s On-Time Departure (OTD) is awful and has nothing to do with the number of airplanes even though the airline deserves some praise for its critical mass.

Air Peace could afford to have more than 20 airplanes because of its operations in many parts of the country, and international and regional services. The same cannot be said of an airline that just wants to remain small and operate efficiently.

While Air Peace has a great number of airplanes, Arik currently has three and has drastically reduced its operations for a few places, Aero Contractors has two and has drastically reduced its operations to two or three routes; ValueJet has four airplanes and has concluded plans to acquire more as it plans to expand regionally and enter into a codeshare arrangement with an airline (Name withheld),  Overland has eight turboprops aircraft and had just taken delivery of its first of three new E175 E-Jets, Azman has five 8 aircraft but five are in service, Ibom Air has five Bombardier CRJ 900 and two Airbus A320-300, covering seven destinations.

Others are Green Africa with three aircraft, Max Air has 11 aircraft, United Nigeria Airlines has four airplanes, Rano Air with five, and Dana with eight but three are active.

Experts’views

The Managing Director of 7-Star Hangar, Roland Ahmed, at the recent symposium of the National Association of Aircraft Pilots and Engineers (NAAPE), said investors are becoming apathetic in doing business in Nigeria’s aviation sector due to its negative ratings.

“We are buying pounds for N1,200 and dollars at over N900, so, I do not see how the airlines are going to survive this. You might have $12 million for a 737 but that amount will buy you four classics fresh from C-check, 22 years or less than 25 years old, so why should I go and buy an engine?

A member of the Airline Operators of Nigeria (AON), Mr Roland Iyayi, said the new provision is strange. 

 

He said, “We have been told that before you can set up an airline, you must have six airplanes. I, sitting here, will tell you that if you are going to set up an airline and you are starting with six airplanes, you have failed.” 

 “Emirates Airline has about 242 aircraft today; they started with two aircraft, which were leased. Airlines in different parts of the world start with one aircraft. So when you set up a system that says, oh we have been having too many delays in the industry and therefore, you must have six aircraft, have we bothered to find out what the issues are with the delays? So a lot of issues are intertwined.”

Last line

The reason for this regulation would have made sense to many other than the reason of capacity that Capt. Nuhu adduced for all-new policy.

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