The commencement of Nigeria Civil Aviation Authority’s (NCAA) six-aircraft start-up regulations on June 1, 2023, has stirred a significant debate within the aviation industry causing a conundrum.
In accordance with Nigeria Civil Aviation Regulations Part 188.8.131.52, the NCAA may deny an AOC application if the applicant lacks the required number of Nigerian registered airworthy aircraft.
For scheduled operations, a minimum of six aircraft is mandated, while non-scheduled operations necessitate at least one aircraft.
Explaining the need for that regulation, Director General Civil Aviation, Musa Nuhu, said domestic airlines’ operations suffer from a lack of capacity.
According to Nuhu, airlines face challenges meeting current financial obligations, emphasizing that the loss of one aircraft can significantly disrupt operations.
He stated, “For you to have six aircraft, it shows you have a very strong financial background of running an airline.”
Established airlines thrive pre-regulation:
However, before the new regulations passed, established airlines like Air Peace, Overland, and Ibom Air seemingly debunked the notion that capacity was a hindrance, showcasing plans for significant expansion.
In the next couple of months, Nigeria anticipates an additional capacity of about 33 aircraft, with Air Peace having already taken delivery of five (5) and Overland one (1), both Embraers, E195, and E175.
The imminent arrivals of Boeing 737 Max and Airbus A220 by Air Peace and Ibom Air could potentially contribute over 5,204 available seats in the coming months.
Yet, a critical question persists: has air traffic adapted to accommodate such rapid growth?
However, the regulatory landscape appears tailored for new entrants, setting a higher bar for entry into this capital-intensive space.
Regardless of where one stands on this divide, the true impact of these regulations remains veiled, awaiting the unfolding dynamics within the industry.
Grouse against the six aircraft start up requirement:
Proponents argue that these regulations address the industry’s need for consolidation, emphasizing the financial robustness required to operate six aircraft.
However, critics, like Sindy Foster of Avaero Partners, assert that the regulations stem from a flawed premise.
Foster passionately states, “The number of aircraft when operations are commenced is no indication of success as some of the world’s most successful airlines started with 1 or 2 aircraft. Currently, we have airlines with double-digit aircraft who are lamenting the difficulties they are encountering in this environment.”
She further highlights systemic issues within the aviation ecosystem, “The environment is producing high cancellation rates, and has produced poor on-time performance. Increasing aircraft will compound these problems.”
On the contrary, proponents like Olumide Ohunayo support the regulations. Ohunayo sees it as a means of ensuring serious investors enter the space, stating, “Instead of monetary recapitalisation, investment in equipment is also a great way to show seriousness.”
Comparing with Nigeria, he added, “Mexico, with only eight(8) domestic airlines, offers about 1.5 million seats weekly. In contrast, Nigeria, boasting 12 domestic airlines, falls short at 800 seats.”
Equally, Joanne Moore from dre aviation deems the move progressive, anticipating a reduction in flight cancellations and improved resource deployment with a minimum of six aircraft.
Moore expresses a note of caution, saying, “Whilst we wholly agree that the NCAA requirements are a major step forward for the sector in Nigeria, we are concerned that the carriers are either not taking the new regulations seriously or do not understand the implications fully.”
Different views, highlighted by direct quotes, emphasize the complexities of factors like financial stability, regulatory adaptability, and varied operational requirements in the aviation sector. The actual effects of this six aircraft start up regulations on industry growth and efficiency are still uncertain.