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FG may rejig policy on airline ownership in Nigeria

By on July 25, 2015

Determined to address the problem of low capacity and improve airlines’ operational standards, the federal government may come up with a policy that would stipulate that any airline operating in the country should have a minimum of five aircraft, THISDAY investigation has revealed.

The government, it was also learnt, may make it mandatory that within five years of operation, every Nigerian airline must have IATA Operational Safety Audit (IOSA), which the new airline must sign and must abide by before it could obtain Air Operator Certificate (AOC) from the Nigerian Civil Aviation Authority (NCAA).

IOSA is the minimum safety standard for the registration and membership of the International Air Transport Association (IATA), which will enable Nigerian airlines partner and code-share with international airlines.

THISDAY learnt from sources in the Ministry of Aviation that economic think-tank team working for the present administration is looking at ways to solve the problem of short life span of Nigerian airlines, their inability to make adequate profit and the unwillingness of foreign airlines to code-share with Nigerian operators.

The source said one of the major factors that lead to collapse of Nigerian carriers is because they are allowed to start very small with a minimum of two aircraft, which affects the airline whenever it takes one of the aircraft for maintenance.

However, an aviation industry analyst and former Head of Communication of Virgin Nigeria, Francis Ayigbe said it would take a long process to enforce such rule because it means that the National Assembly would have to amend the existing laws in the Nigerian Civil Aviation Regulation (NCAR) to incorporate the new conditions. He add that although NCAA may make IOSA certification compulsory but it plays no roles in enhancing the airlines obtain IOSA registration.

“Government will have to enable this through legislation, so it is the National Assembly that will make it possible. NCAA some time ago said obtaining IOSA certification is compulsorily voluntary, which means that while it must be obtained there was no time ceiling for it, but the new law would make it compulsory with deadline,” he said.

Ayigbe posited that for NCAA to enforce the new rule when it is made law, it must put in place technical framework that would enable the airlines to obtain IOSA, which has a long list about 99 items to meet that include ground handling, cargo handling, flight operations, safety regulation, commercial operation and others.

IOSA certification upgrades airline in terms of safety record, capacity to interline and code-share with other airlines and other benefits, including participation in the IATA clearing house.

But industry observer, Olu Fidel Ohunayo commented: “Our problem is not our ability to make laws or regulate but the power to implement, monitor and sustain it. We mandated our carriers to be IOSA certified while those applying for new AOCs are to present documents stating they are committed to getting the IOSA certification. The regulators and the airlines simply went to sleep on this issue thereafter. IOSA certification is the barometer used to measure the safety level of an airline while the number of aircrafts in your fleet shows your strength, scheduling integrity and a measure of your debt and asset ratio.”

He noted that Nigerian carriers lack corporate governance, which is a hallmark of responsible administration that is sacrificed due to the ownership structure of Nigerian carriers that is tilted to one man.

 

[ThisDay]