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Getting Airline Operator Certificate (AOC) in Nigeria is as tough as allowing a camel to pass through the eye of a needle, especially for a new entrant. Experts said the Nigeria Civil Aviation Authority (NCAA) is so strict with the issuance of AOC while others have accused the aviation regulatory agency of not being thorough and diligent enough. WOLE SHADARE writes
Highly capital intensive
Airline is a high cash burn business. You spend close to N2 million to operate a B737- 400- 500. To fly it for 10 hours, you need about five times that amount. If you have six aircraft — airlines need to bring in four or six aircraft within a year of starting operations. Some maintain two aircraft for a very long period, but with limited routesmay be, two or three at most with that number of airplanes.
Besides, all expenses are payable upfront or almost immediately. For instance, the oil companies provide credit for only seven days; if you don’t pay them, they will stop supplies.
The airport charges have to be paid every month. An aviation expert who spoke to New Telegraph on condition of anonymity, said before you seek a licence, you need to get a no objection certificate (NoC) from the NCAA, adding that the regulator studies the promoters background before issuing an NoC, based on which operator can lease an aircraft or place an order with aircraft manufacturers.
A promoter need not bring in all the money at once, but he’s expected to bring in at least half the initial project costs. Banks do provide working capital, but they are yet to really warm up to the new wave in Nigeria’s aviation.
They, however, chip in when you buy an aircraft. Export credit agencies and banks finance up to 95 per cent cost of an aircraft. The purpose of this is to subject the granting of waiver to airlines to scrutiny for the use of one aircraft when regulation states that carriers can use two aircraft.
Frequent plane crashes
It would be recalled that in 2003 after the crash of EAS Airlines in Gwamaja near Kano, the Federal Government quickly formulated a policy that barred airlines using aircraft of over 22 years of age. The government helped through the Nigerian Civil Aviation Authority (NCAA) formulated policies that could help to sanitise the sector.
The NCAA swung into action by pruning down the number of airlines that operated but which safety policy were suspect. This number reduced by the time the regulatory body finished it surgical operations and came up with reforms that allowed airlines to operate minimum of two aircraft at a time. Meanwhile, most of the time, airlines have been seen using one aircraft, leading stakeholders to wonder if the aviation regulatory body is still working to protect the sector.
Why NCAA grants waivers
But spokesman for NCAA, Sam Adurogboye, said there is no limit to waiver that can be granted to airlines to operate with one airplane only if other aircraft are out for maintenance.
His words: “The minimum is that when a new start-up begins; it is a policy that was introduced when Mrs. Kema Chikwe was the Minister of Aviation. It was government’s policy after EAS crash that any aircraft above 22 years should not be used. They are used for cargo.
The policy is that a new start-up starts with a minimum of two aircraft. It means that at any given time you must have two. If you are in operation, there are circumstances that can lead to a waiver. “For example, if you have three, four aircraft and three of them are due for maintenance at the same time and you have only one left, we can grant a waiver by way of looking at you, look at that one you are using while you are doing maintenance on the rest. We will cut down the size of your operation to only one or two destinations.
The birth of NCAA
NCAA was established by decree 49 of 1999, with among others, the statutory responsibilities of ensuring regulating, monitoring and promotion of the safety, security, economic and reliability of air navigation oversight in line with International Civil Aviation organisation (ICAO) standard and recommended practices (SARPs). The Authority effectively commenced operations on January 1, 2000. Prior to 1989, the regulations of the aviation industry as well as provision of air traffic services were carried out by the Civil Aviation Department (CAD) of the Federal Ministry of Aviation.
New Directorates of Safety Regulation and Monitoring and Economic Regulatory and Monitoring were established in the Federal Ministry of Aviation to replace the Safety and Economic function of the defunct FCAA while Air Traffic Services and Aerotels department were merged with the former NAA to form Federal Airports Authority of Nigeria.
The International Civil Aviation Organisation (ICAO) is the body responsible for setting standards of international civil aviation activities and ensuring that states fulfill obligations provided in the convention on International Civil Aviation.
The body, as part of its conditions, requires all member states to establish an appropriate state organisation to be known as Civil Aviation Authority charged with necessary powers to ensure compliance with air navigation regulations promulgated by the state. Nigeria as a signatory to the convention and desirous to maintain its membership of ICAO had to fulfil this obligation.
The aviation industry needs to undergo significant transformations including a turnround that would see NCAA build on the job of stiff regulation for the sector to guarantee safety.