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Right from the beginning, it seemed NG Eagle flew into stormy waters and could be frustrated from getting an AOC. All eyes are on NCAA as its independence and integrity are at stake. Could the ‘airline’ be running into turbulence even before it starts? WOLE SHADARE evaluates the situation
Setting the stage
The stage was set for the Assets Management Corporation of Nigeria (AMCON) to float NG Eagle. Some said the assets manager planned to transmute struggling Arik Air into the new airline while others stated that Arik Air would operate side by side with the new carrier. It was learned that NG Eagle was at the final stage of the processes for AOC before lawmakers threw spanners in the wheel of progress.
Dabbling in Arik is not what one would wish for considering the not too good story about the carrier that necessitated AMCON’s take over five years ago amid the carrier’s toxic debts put at nearly N500 billion.
Arik Air’s story is a familiar one and one that shows the precariousness of the airline business in Nigeria. It also shows how badly managed airlines had been in the country in the last 20 years and one that can add to the plethora of airline failures in the country.
As it stands, Arik remains a shadow of its former self. It is an airline that activated the self-destruct button. It came with so much promise but is one that is about to collapse spectacularly if AMCON applies the liquidation option, which it could do if obstacles are put in the way of floating NG Eagle by the National Assembly that had directed the Nigerian Civil Aviation Authority (NCAA) to withhold the Air Operator Certificate (AOC) of the soon to be an airline.
The National Assembly acted on petitions by the Association of Nigerian Aviation Professionals (ANAP) and the Federal Airports Authority (FAAN) branch of the Nigerian Union of Pensioners (NUP) that urged NCAA not to issue AOC to start-up airline, NG Eagle.
Their basis for that was the fear that Arik Air was transforming itself to NG Eagle and would thereby escape its heavy indebtedness to FAAN and other aviation agencies. They insinuated that AMCON, the Receiver Manager of Arik Air, was using the assets of the airline to float NG Eagle.
The National Assembly was of the opinion that the Federal Government would lose revenue if Arik failed to pay its debt to FAAN in the form of 25 percent statutory remittance to the Federal Government by FAAN.
Not a few believe that the issue of indebtedness of Arik Air to FAAN and NCAA is only a smokescreen. It is understood that the real issue is the politics of a new national carrier.
The National Union of Air Transport Employees (NUATE) had last week, alleged that indications are that there was the fear on the side of the minister of aviation that AMCON had positioned its new airline, NG Eagle, to metamorphose into a national carrier, “whereas the minister has been labouring for the past six years to create one, which he has named Nigeria Eagle.
“As AMCON and the ministry are both agencies of the Federal Government, there is clearly no possibility of the two airlines operating side by side as national carriers. The fear is that if NG Eagle succeeds, then the Nigeria Eagle project would be jettisoned. That means one of the airlines must bulge. This, we understand, is the crux of the matter,” said Ocheme Aba, National Secretary-General of NUATE.
Delayed national airline project
Many argue that the ministry has taken all of six years, and still counting, to form a national carrier that will not be owned by the government, but AMCON has utilised a few months to achieve the objective, though the nature of the ministry’s effort, it is very obvious to aid comparison.
The whole scenario does not in any way downplay the significance of Arik’s indebtedness to FAAN and others. If anything, it suggests that there is a pressing need to find a solution to Arik’s heavy pile of debts.
The situation has pitted FAAN and NCAA against AMCON. NCAA and FAAN are parastatals of the Federal Ministry of Aviation, while AMCON is an agency of the Federal Ministry of Finance and is also supervised by the Central Bank of Nigeria (CBN).
The two ministers, the CBN governor and the heads of the other agencies are all senior officers of the executive arm of the Federal Government of Nigeria. Therefore, the executive fiasco alludes to the failure of the executive to put its house in order.
This unfortunately paints a picture of a government at war with itself. And if this war is not quickly brought to an end, there is the fear that the aviation sector of the national economy would suffer dire consequences, especially at this time that the sector is going through a burdensome, grappling with the serious negative impact of the receding coronavirus pandemic.
Aba pointed out that Arik Air or AMCON could not raise N19 billion being demanded by FAAN and NCAA. And it is honestly unhelpful to create enmity with FAAN or NCAA for Arik Air or AMCON since the airline will always need the support of the two agencies to survive.
He reiterated that those proposing that AMCON’s NG Eagle’s AOC should be on hold until Arik Air’s debts are settled were only pushing the assets managers to the wall, a situation, he noted, points to liquidation.
Considering the airline’s low worth compared to its huge debts, liquidation will bring about a chaotic end to Arik Air by which all parties will be losers. This should be avoided by all means.
Should there be a chaotic end to Arik Air by way of liquidation, the workers would count among the greatest losers.
The untold hardship that befell ex-workers of the defunct Nigeria Airways after the airline was unceremoniously liquidated by former President Olusegun Obasanjo’s administration in 2014 is known to all.
It took an intervening period of 20 years and spanned four governments – the governments of Obasanjo, Yar’Adua, Jonathan, and Buhari before the hapless workers began to get some reprieve in terms of their terminal benefits. No one should be so wicked as to wish a similar experience for Arik workers.
A former Managing Director of Aero Contractors, Capt. Ado Sanusi, expressed disappointment with pronouncements coming from the National Assembly, describing it as a gross undermining of NCAA’s regulatory functions.
Sanusi stated that pronouncements like the ones coming from politicians could cast aspersions on the credibility of the aviation regulatory body, NCAA if the Agency goes on to be guided by the utterances on AOC certification, which he described as a technical area that the National Assembly does not know how it works.
Sanusi further noted that the country could fritter away the gains of the past few years by NCAA and, by extension, those made by the incumbent Director-General, Capt. Musa Nuhu, as the sector could witness interference of the past from politicians to influence technical decisions of NCAA
Aviation Round Table (ART) condemned the interference by the National Assembly in the issues involving the issuance of AOC to NG Eagle by NCAA.
In a statement signed by Olumide Ohunayo for ART, the pressure group noted with dismay how in the past the lawmakers had interfered in the affairs and duties of NCAA, saying such undermines and whittle down the powers granted to NCAA.
Denial of AOC to NG Eagle would shut out 20,000 potential jobs for Nigerians, together with the opportunity for a reasonable number of Arik staff to migrate to the new airline. This would be very unfortunate indeed. The intervention of the Presidency would go a long way to avert such a catastrophe.Google+