Aero Contractors: Did the NCAA carry out any economic audit?

IT was very interesting last Friday to see the Director General of the Nigeria Civil Aviation Authority (NCAA), stand with the Minister of State, Senator Hadi Sirika to beg workers of embattled Aero Contractors to postpone their protest till Monday to see what can be done to ameliorate the situation.

However,   as watchers we cannot help but ask the questions no one, the unions, the workers even the Minister have failed to ask which is,” What role did the Nigeria Civil Aviation Authority (NCAA) play in all this drama? If they did what they were supposed to do as regulators, would it sink to this?”

On Thursday, the day Aero Contractors halted scheduled operations the Nigerian Civil Aviation Authority (NCAA) quickly came out to dismiss claims that some airlines are winding down their operations stating on the contrary, that these airlines are merely suspending their operations temporarily to enable them undertake certain operational overhaul and strengthen their overall operational outlay.

The NCAA, referring to Aero Contractors Ltd., told the world that at present the airline has only one serviceable aircraft and this in contradiction to the Nigerian Civil Aviation Regulations (Nig.CARS) which stipulates that no airline operator shall carry out schedule commercial operation with only one aircraft.

Director General of the NCAA, Captain Usman Mukhar who signed the statement said the regulatory body on no account compromise safety and security of airline operations in the airspace further stating that “Every facet of the Nigerian Civil Aviation Regulations (Nig.CARS) and Standard and Recommended Practices (SARPs) must be adhered to with due diligence.In addition, everything has been put in place to continue to ensure compliance.”

However, one does wonder if the NCAA even read Aero Contractor’s statement on why they stopped operations before they issued their laughable statement the next day.

Aero’s CEO stated categorically,“The impact of the external environment has been very harsh on our operational performance, hence management decision to suspend scheduled services operations indefinitely effective September 1, 2016 pending when the external opportunities and a robust sustainable and viable plan is in place for Aero Contractors to recommence its scheduled services.  The implication of the suspension of scheduled services operations extends to all staffs directly and indirectly involved in providing services as they are effectively to proceed on indefinite leave of absence during the period of non-services.”

This simply bothers on the airlines economy and in truth, one does not get to this abysmal point overnight, it must have been a long time coming so we find the NCAA’s response to this on September 2, 2016 thought-provoking and were wondering if the NCAA under this leadership aims at dancing to the gallery.

In truth, one should ask the NCAA what they were doing, if they could not look into the books they easily throw at everyone else but themselves, and know that there was a situation in Aero that needed economic regulation.

It is easy to flout rules when you make them, and so we would like to throw the NCAA’s book right back at them by quoting from the Nigeria Civil Aviation Regulations 2012 Vol. II Part 18 which deals extensively with Air Transport Economic Regulations but before we do, let us first of all say that the best defense the NCAA would have, is to say they don’t want to regulate airlines to death but now it seems they are ‘unregulating’ them to the same end.

For avoidance of doubt, NCAA Regulations on airlines financial health Part 18.10.1. applies to the continuous monitoring of the operations of Nigerian licensed airlines for the purpose of ensuring their financial capability for safe and sustainable operations.

Now in truth for an airline to be economically viable there are certain things that matter major which is its ability to handle its direct operating cost (DOC) meaning that the airline should be able to meet expenditure that is directly related to flight operations such as flight crew allowance, aircraft fuel and oil, lease rental or depreciation, aircraft maintenance, insurance premium, ground handling, navigational charges, landing and parking and so on.

Last we know, Aero contractors have been owing salaries for two months, or is the NCAA not aware? Aero has almost three aircraft on maintenance and funds are the reason why it cannot get its aircraft or get maintenance for them, or is the NCAA also unaware of that scenario? We also learnt that Aero is heavily indebted to the airport it operates from or is the NCAA also unaware of this? Also like every other domestic operator in Nigeria, Aero is indebted to Jet A1 marketers, or is the NCAA also unaware? And if the NCAA was unaware does that not mean a huge vote of no confidence on the regulator who does not know what happens in its industry or take steps to solve the problems assuming it does know. Any way the pendulum swings the NCAA is culpable in this matter.

Another carrier, First Nation, has had its aircraft grounded for almost two weeks, for engine change according to the CAA’s statement, but do riddle us this, does an aircraft engine change happen at the tarmac? As the airlines two aircraft have been parked there.

Part 18.10.2 also states that all Nigerian licensed airlines shall ensure proper, transparent and prudent financial management in the conduct of their operations.

Part 18.10.3. states that all  Nigerian licensed airlines shall submit to the authority on a monthly basis, all financial data and records on their operations in the form and manner as may be prescribed by the Authority. The fact the CAA continues to play the ostrich to save its face is downright amusing because it is its laws we are quoting, Dr. Harold Demuren former NCAA DG once said airline financial health is something that is audited monthly and now given the fact that Aero has been in this current financial quagmire since 2015 one would ask the NCAA and its DG in particular if they have done the needful as it pertains Nigerian airlines.

Then there is 18.10.4. which tells us that the NCAA shall evaluate the financial returns and make a copy of the report of the financial health assessment to the Management of the airline which may make representation to the NCAA.

We may not be privy to whether the NCAA actually did this but one thing for certain is that if they did, they will not apologetically stand in the midst of genuine demonstrating Aero Contractors workers to take a political victory for a job that they neglected from the start.

In any case, our prayers are with the entire staff of embattled Aero Contractors, we hope they get all their dues and pray they do not end up on our ‘Blast from the Past’ segment, that would be a disservice to the oldest airline in Nigeria which has not had any major incidents or any accident for that matter.

 This Editorial is the Point of View of Nigerianflightdeck.com