Domestic airlines punished for ‘sins’ of early operators – UNA

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*L-R: Chief commercial officer, United Nigeria Airlines (UNA), Mr. Raphael Uchegbu; chief operating officer, Mr Osita Okonkwo, general manager, ground operations, UNA, Mr. Hamzat Bukar, and station manager, Lagos, Mrs. Amauche Orakwe, during at a press conference in Lagos.

The chief operating officer of United Nigeria Airlines, Mr Osita Okonkwo, said Nigeria’s domestic airline operators have been locked out of the aircraft dry lease market because of the infractions committed in the past by some carrier owners.

Okonkwo stated this in Lagos while addressing journalists in commemoration of the airline’s third anniversary.

He said Nigeria had been branded as a “high risk country” because of the misdeeds of some early airline operators.

Consequently, aircraft lessors blocked Nigeria from dry lease agreements, categorising the country as high risk of getting their equipment back when needed.

The local carriers were then left with the capital-intensive wet lease option as they had to pay the foreign crew and maintain the aircraft with the crew reserving the right to fly the equipment back to its owner in the event of a default.

However, Okonkwo said the minister of aviation and aerospace development, Mr. Festus Keyamo had met with an international lobby group to rid Nigeria of the “high risk country” tag which locked the country out of the dry lease of aircraft by the operators.

He said the minister had also taken up the matter with aircraft leasing group comprising the two major aircraft makers, Airbus and Boeing.

“Our appeal is that we don’t miss out on opportunities. Nigeria is the largest market in Africa. The potential is there. The market is large”.

“The minister is on top of it. It would help that Nigeria is removed from country risk on aircraft dry lease. The country risk rating has hampered our operations and we are exposed to wet-lease which is very expensive,” he said.

Thereafter, Okonkwo spoke on aircraft insurance saying   no insurance company has the capacity to do the underwriting, especially when it involves bigger aircraft.

“There is no capacity internally to do big aircraft insurance in Nigeria. So many lessors are not operating in Nigeria because of insurance. It is killing business because even though you want to do indigenisation, you cannot do that with another person’s assets.”

“Even if you buy an aircraft today, it is a requirement that you have to insure it even if you pay with your money in Boeing, Embraer or whatever. The insurance must cover Boeing even though they have sold it to you, they must be party insured in that transaction. So you can’t escape the international requirements of the business and limiting it locally will not help lessors,” he said.

The chief operating officer also spoke on aviation fuel, forex scarcity, and dilapidated airport infrastructure, among others, saying they pose grave challenges to airline operation in the country.

“When we commenced operation, jet fuel price was about N300.00 but as at today it is N1, 300. Forex was about N300/$. As of today, it is N1, 7000/$. These are ingredients for disaster.

“When you look at forex, the availability and the cost, for us to get critical spare parts we have to pay a lot of money to be able to access forex.

“Then you talk of the infrastructure inadequacies. In all our airports, there is no one that is excluded.

MMA2 has some advantages; they have technology, they have vehicles but still the space itself is so chaotic in the morning when there so many flights leaving. It requires further expansion for better efficiency.

“We have flights being delayed for 30 minutes to one hour and once you do that, it cascades into other flights and the delays continue,” he added.

On the service providers, Okonkwo said some airports have only one fuel supplier.

“We have had situations where we land and the bowser is not serviceable. You wait for 15 minutes, one hour, it is not serviceable and you will now decide to do a test up to another airport. That is huge cost in terms of money and time.

In some airports, there is only one provider. There are occasions when you have full load, for our type of aircraft of 50 passengers.

“When you get a call that the bowser is not working, the passengers don’t understand. How do you explain this? These are difficulties that impede efficiencies of our operations,” he added.