Why Local Airlines Are Challenged-Expert

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Yemisi Izuora

An aviation security expert and consultant, Group Capt. John Ojikutu (rtd), has traced weaknesses in operation of local airlines to lack of management structure arising from single ownership as well as poor financial management.

Ojikutu insisted that the present travails of the Nigeria Aviation industry, particularly the airlines are not just scarcity of aviation fuel and the lack of access to foreign exchange, but also
the recurring debts portfolios and the diversion of earnings to invest in other businesses.

He said that while the government’s service providers particularly had been the cash cow exploited by the airline operators and the politically exposed persons in government, the aviation regulatory body, the Nigerian Civil Aviation Authority (NCAA) has remained particularly passive on matters of economic regulation and oversight of all the operations.

He stated that of particular importance is the NCAA neglect of its responsibility to continuously monitor the earnings and spending of these airlines and airports operators to ensure their compliance to the economic regulations as prescribed in the National Civil Aviation Regulations (NCARs) Part 18.10.5 for airline operators and Part 18.7.5 for airport operators.

He frowned at the recurring airlines’ debts to the aviation agencies that is said to be in the region of N40 billion, stressing that the “questionable intervention funds of about N200billion seemed to have been facilitated by some politically exposed individual without verifying the debt portfolios of the recipients and without the knowledge of the Ministry of Aviation.”

He disclosed that there was still a questionable part of the intervention fund facilitated by a bank for the defunct Virgin Nigeria Airline, which he said was transferred as loan to Air Nigeria Airline at 2 per cent; describing it a very low rate at the time the fund was disbursed as against the 6 per cent approved by the Central Bank of Nigeria (CBN) on the intervention fund to the beneficiaries

According to him, This questionable intervention fund was unresolved by the National Assembly Committee on Aviation headed by Senator Hope Uzodinma before he was removed as the head of the committee.

Ojikutu who was also Commandant, Murtala Muhammed Airport, Lagos, noted that the NCAR’s Part 18.10.5 requires the NCAA ’to continuously monitor the financial health of licensed airline operators for the purpose of ensuring their financial capability for safe and sustainable services.

The provision in the regulations on the other hand, he reiterated mandates the airlines ‘to ensure proper transparency and prudent financial management and to submit to the NCAA on monthly basis, all financial data and records of their operations in a form and manner prescribed by the NCAA.

He alleged that the level of huge recurring debts of the airlines to all the service providers are evidence, which suggests that the provisions of NCARs part 18.7.5 and 18.10.5 have not been substantially complied with by the operators and the regulators.

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