By Daniel Omale
n a recent flight from Nashville, Tennessee, USA, to Nairobi, Kenya, I had the opportunity to glance through the trip’s operational expenses (landing, over flight permits, handling, and fuel) for the technical stop in Santa Maria; a Portuguese Island located in the heart of the Atlantic Ocean. This is the most favourite refueling station for aircraft wishing to cross the Atlantic to and from North America to the rest of the world (Europe, Africa, Middle East etc.).
I was surprised that landing fee for a G550 aircraft, of over 41,000 kg weight, was mere $160; additionally, the price of Jet A1 per litre was $0.52 (fifty-two cents). These prices are much lower than what they are priced for in Nigeria. With these low-costs, fast and efficient services on the island, it is not surprising why so many aircraft operators choose Santa Maria as their technical stop route.
From 1980 to date, not less than 50 airlines and 60 privately owned business jets have gone into extinction in this country. One of the main reasons for this recurring demise is the orchestrated extortion of aircraft operators by two aviation agencies: The Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA).
FAAN, as a government enterprise, has become the most expensive service provider in the industry because of its unrealistic, unwarranted, arbitrary increase of landing and parking charges, without proportionate increase in services. Between September and November of this year, landing and parking fees at Nnamdi Azikiwe and Murtala Mohammed airports have increased by 1000% for no rational reason.
The targets are foreign registered aircraft, owned and operated by Nigerians. It is completely irrational to extort monies, in United States dollars, for any aircraft permitted under our civil aviation regulation to operate within the country, whether it is foreign registered or not. For example, a foreign registered aircraft operating under part “g” of an Air Operator’s Certificate (AOC) in Nigeria, should be charged the same value as a Nigerian registered aircraft; this has dramatically changed without validity.
Even for those privately-owned business jets with foreign registration, but with visible Nigerian ownership/lessee, it is wrong to discourage them from operating in our national airspace. The fundamental issue affecting our economy is how much those in authority become greedy to the point of cheating those contributing to the economy. It has become a norm; a culturally acceptable behaviour to cheat in all areas of endeavour.
It is absolutely discouraging to an investor, who risked his capital to get an aircraft financed from abroad, with a collateral promise to keep the airplane in the same registration until final finance payment is made before deregistration—to wake up to irregular, excessive landing and parking bills.
Prior to September of 2017, landing fee for a foreign registered aircraft of less than 12, 500kg weight was about N3,500 or $12 per landing. It has increased to N33,000 or $103 without a single notice of proposed –rulemaking, explanation, nor an enhancement of services in the airport. This is untenable anywhere else in the world. Parking invoices have equally increased by 1000% in the same ambivalence, with fragrant authoritarian attitude.
For business jets with all up weight in excess 12,500kg, there is a flat rate of $300 per landing; therefore, on a round trip to Lagos from Abuja, FAAN receives $600 for the two landings. This is not only alarming, but a systematic way to run an operator out of business.
Passenger Service charge(PSC) which was N1500 per passenger on a business jet, increased to N5000 per passenger in October, again, without prior notice. Ironically, if an aircraft takes eight passengers from Abuja to Lagos, the operator pays N40,000 (5000 X8), then even if he is bringing the same passengers from Lagos to Abuja, within an hour after landing in Lagos, he pays another N40,000. This is not only unusual, but double tariffs for the same trip. These exorbitant costs don’t exist anywhere on this planet; an imposing predicament to airline’s marginal profitability.
Service Recovery Charge (SRC): this is another hidden 20% levy imposed on operators as property rental charge, in addition to the monthly rent bill. It is noteworthy that only First bank of Nigeria, alone, has remained in operation at Nnamdi Azikiwe airport, Abuja. Other banks have closed shops due to what they call “undue, excessive charges” by the airports authority.
Apron Pass: this mandated permission for anyone visiting the airside of the airport, should normally not cost a penny to an aircraft owner, or AOC holder, but FAAN suddenly increased the fee from N25,000 three years ago to N250,000.
The downsides of these sheer authoritarian, arrogance, and a direct leverage to extort and cheat aircraft owners, are frequent airline bankruptcies, unemployment for Nigeria’s pilots (young & old), and a damaged economy.
What is ironic in the whole situation is that FAAN officials collect USD in cash, in advance at the official central bank rates, then change the money in the airport’s bureau de Change (BDC), at higher rates, and then pocket the differences. This practice has existed in the system for years, but with greed, comes more greed. Aircraft owners are definitely the victims, and repeatedly suffer the scourge.
What everyone finds appalling in the industry is how various appointed ministers of aviation orchestrate different extortion methods to enrich themselves. This wanton disregard for decency, in connivance with FAAN officials, has spurred the looting of billions of Naira from the system in the most secretive, undetected ways. This pervasive act of looting is associated with business aircraft; those permanently flying within, and those on short trips to Nigeria.
For schedule operators, deluge of inflated invoices with infrequent reconciliation, create avenue for stealing. It is unimaginable that an airline owes the airports authority billions of Naira in landing fees in a year’s operation, yet the carrier cannot boast of meeting its loan repayments to its banker. It is this reversed aircraft operational analysis that has rendered insolvency as the best alternative to a continuous operation in absolute debt.
On paper, FAAN generates over N35 billion annually; it is still unable to resurface damaged runways without the federal government subvention. If the recent resurfacing of Nnamdi Azikiwe airport’s runway is any thing to evaluate, then there is every reason for us, as Nigerians, to doubt the frugality of the management of the service provider and its supervisory ministry.
On the other hand, NAMA charges $300 and $600 for aircraft weight categories of 12,500 kg, and those above 12,500kg respectively for a round trip to Lagos from Abuja. Therefore, an aircraft owner wishing to fly on a business trip, in his jet to Lagos from Abuja, must be ready to spend over $1800 including handling fees, without the basic operating costs (fuel, crew, insurance etc.). All payments are in cash, again, prior to departure.
Although the Nigerian Civil Aviation Authority (NCAA) is the least of the three extortioners, its associated aircraft inspection costs are the highest in the world. Penalty for violation of the Nigerian civil aviation regulation (NCAR) has, of late, doubled. This harsh punishment, intended to deter future occurrence, can and will strangulate an operator, especially, if prior warning has not occurred.
Business aviation directly supports over 5000 employees, and indirectly supports more than 50,000 people in Nigeria. It is needless to mention the few airlines gasping for financial support.
Although the minister of state aviation, Hadi Sirika, has promised to review and approve the price reduction recommendations of the Aircraft Operators of Nigeria’s task force, but then for obvious reason, he is less motivated to do so.