On ground handling rates, NG Eagle and meddling politicians

By Olumide Ohunayo

Olumide Ohunayo, a member of the Aviation Safety Round Table, is director of research, Zenith Travel Consult

The concurrent orders to Nigeria Civil Aviation Authority (NCAA) by the House of Representative committee on aviation, chaired by Nnolim Nnaji, asking the regulator to suspend recently approved ground handling rates and the issuance of Air Operating Certificate (AOC) to NG Eagle, a new airline promoted by the Asset Management Company Of Nigeria (AMCON) has been topical media subjects of recent. Not to be undone, the Senate Committee chairman, Smart Adeyemi, using his personal letterhead, also hurriedly issued the same order suspending the issuance of AOC to the new airline.
The House of Representatives Committee on Aviation gave the directive in Abuja following a petition jointly addressed to Nnaji, by the Association of Nigerian Aviation Professionals (ANAP), and the Federal Airports Authority of Nigeria (FAAN) branch of the National Union of Pensioners (NUP). AMCON, according to the petitioners, has acquired Arik Air properties and decided to change the name to Nigeria Eagle Airline to evade payment of the monumental debts owed to all the aviation agencies. They, (petitioners) further alleged that AMCON has changed the livery on Arik Air aircraft to Nigeria Eagle Airline which showed that it has fully acquired Arik Air assets but wanted to abdicate its liabilities through name change. ANAP and NUP affirmed that they were petitioning the committee to restrict NCAA from issuing AOC to Nigeria Eagle Airline to avoid a repeat of what happened in the case of Bellview Airlines which transformed to First Nation Airways and the aviation agencies ended up losing billions of naira owed by the defunct Bellview Airlines.
On the order suspending the new ground handling rates, the house claimed the decision was based on complaints made to them by some airline operators and airlines operating into Nigeria. I was taken aback that the operators and airlines who run to the media to praise NCAA to high heavens go behind to report them to the legislators, rather than seek audience with the NCAA and relevant parties, while a union which has no stake or membership in Arik airline has suddenly developed love and protection of publicly owned aviation bodies, it’s a season of absurdities.
Yes, Arik owes staff and government agencies just like other troubled airlines that have shut down or limping while appealing and accepting public funds. The House did not order the NCAA not to renew their AOC nor did ANAP send any petition in public interest. The airlines owing aviation agencies should naturally not benefit from the Covid-19 largess, yet Ibom Air that is not owing any agency was denied and debtor airlines benefitted during this period to support their operation. The Senate and House committee deliberately went to slumber here.
Arik debts piled up before the intervention of AMCON, debts have not been added to that pile from the time AMCON came in till now, there is no possibility that FAAN and other agencies will get all that money running into billions of naira, because that money is not coming soon. The worst that can be done will be to liquidate Arik.
Nigeria needs to get to the point where it’s possible to recover debts in all manner of cases. There’s been an increase in debt collection services, but they don’t seem to have any power unless, of course, you are AMCON. The matters are for the courts and I believe there are some resolved and unresolved court actions for AMCON to have repossessed those aircrafts from Arik in the first place. If Arik, ANAP or the House Committee wanted to petition, they should have done it at the newspaper publication stage of the Air Transport License application process, which is normal and ICAO or any potential investors will not find anything wrong with a court order or action, but not with political interference because the National Assembly is not a court.
We need to protect that institution called NCAA; its oversight function and responsibilities must not be impeded. Tomorrow an airline may fail the process of issuance of AOC by the NCAA and the organisation will run to the House Committee to issue an order reversing it; where does it leave our cherished safety accolades?
However, debt collection is not in the purview of the NCAA, though they recently put a system in place, where operators get financial clearance certificates before a letter of request is received from them. This will mean that in the books of NCAA and other agencies, NG Eagle has no debt or encumbrance.
NG Eagle’s right is unfairly breached here, having complied with mandatory checks and going through the rigorous four stage procedure, only to be denied or suspended at the fifth and final stage; the regulator is in gross violation of these rights and process and should make amends.
AMCON did well by setting up a company to manage its recovered assets from toxic loans and deals, finance houses do the same. That’s where we get auctioned houses, cars, aircraft etc., if not outright purchase. What AMCON, a government agency, is doing may be strange to many but not wrong. It’s proactive for a Nigerian entity to have a business-like attitude. It needs to be applauded; they operate the planes and not give others that do not pay. If the law did not stop them, then they are good to go.
Three Boeing 737 aircraft meant to kick-start the operations have been parked for about 18 months waiting for the coveted AOC, but unfortunately now enmeshed in the high wired political play, while the industry and country are losing revenue and jobs that should have been created, just because some people have their personal agenda coated as national agenda.
It’s time to wake up and stop this drift. I also do not support the call by NUATE, a union in the industry, asking the Presidency to intervene; we will just compound issues now and in the future when such interventions are accepted. The body language of the minister of aviation permeates the agency heads when handling aviation issues, irrespective of their management position, considering they all lack supervising boards that can protect them.
I want to commend Senator Ibn Na’Allah for his bold and courageous apology to the industry and Nigerians on behalf of the Senate Committee on Aviation, at the 50th AGM of National Air Traffic Controllers Association Meeting in Abuja last month. He said the committee was misled in his directives to the NCAA to suspend the issuance of AOC to NG Eagle, stating very clearly the Senate does not wish to interfere with the statutory functions of the NCAA. Rather than tow the same line the House Committee hurriedly called for a closed sitting, a clear departure from the norm where industry players are called to an open hearing. This is face saving and meant to divert the huge outcry from industry players. The directive given to AMCON to draw a structured plan of paying Arik’s liability at that closed meeting is within their legislative rights but it’s not in their purview to suspend the issuance of AOC. It is critically related to safety, and they should not cross the RED LINE.
The AOC order from the House Committee is coming on the heels of a similar order to the NCAA asking them to suspend the implementation of the new ground handling tariff, which is coming 36 years after the last tariff approval, without asking questions or calling all parties to the table. The ground handler has called off the proposed strike, which is noble and saves the industry from unnecessary distortions, while negotiations are ongoing to resolve the impasse.
I also plead with the ground handlers to take the strike option off the table for now and enter into dialogue with the airlines using the ICAO recommended procedure of Cost Recovery, Wider Consultation, Non-Discriminatory Pricing and Corporate Integrity in negotiating with all parties. Also, due to the Covid-19 pandemic and its effect on aviation, a discounted and gradual implementation of the new tariff will not be a bad idea for the ground handlers to consider.

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