Domestic airlines are financially distressed, need injection of funds – DG NCAA
Ongoing audit on domestic carriers has revealed that some of the airlines in Nigeria are financially distressed and need some injections of funds, Musa Nuhu, the director general of the Nigeria Civil Aviation Authority (NCAA) has said.
Nuhu also hinted that Aero Contractors which suspended scheduled passenger flight operations is now reorganizing, getting more aircraft and expecting some injection of funds so that its financial status can grow.
The DG who disclosed this in an interview with journalists on Monday said “the airlines have challenges.
“We have sat down with some of them, discussed with them and some of them need some injections of funds. Like Aero decided to shutdown on its own volition and they are reorganizing, getting more aircraft, expecting some injection of funds so that their financial status can grow. So, we are in discussions with them on this matter,” he said.
He said financial distress in aviation, if not managed properly, could turn out to be a safety issues as NCAA is doing it’s best to ensure airlines don’t start to cut corners.
He disclosed that those with financial difficulties are delaying and cancelling flights, and that is why NCAA is working with them.
“We are all in this together, except where we have serious concerns in the continued existence of the airlines or serious violation, we will work with them hand in hand so that they can be able to get out of this financial challenges they have found themselves,” he said.
On Dana Air’s status, the DG said NCAA is working with Dana to see how its issue can be resolved.
“We had an internal zoom meeting with the airline on Monday and a couple of things need to be completed and we will call our management; Dana will sit down with them, they will tell us what they have done and what they have put in place. If we are happy, we release them, but if not, we will tell them what they must do before they are release for safe operations,” he said.
Nuhu, who also spoke on the assent to Civil Aviation Act 2022 and the effect for aviation, said since the civil aviation act of 2006, there have been significant changes in the industry, including new annexes in ICAO, new developments in terms of ICT and environments in the sector generally.
In addition to that, he said the service providers namely; the Nigerian Airspace Management Agency (NAMA) and the Federal Airports Authority of Nigeria (FAAN) have some residual regulatory functions in them and those regulatory functions have been removed and moved to NCAA as the regulatory of the industry to avoid conflict of interest.
“You cannot provide service and also regulate some of the services you provide. Those are the main things that we have in the new Civil Aviation Act 2022. Of course, there are other changes that are with the view to have a much efficient, effective air transportation industry and to make sure Nigeria complies with the new ICAO standards, new Annexes and international best practices,” the DG added.
On the release of the remaining trapped funds belonging to foreign airlines, the DG said Hadi Sirika, the minister of Aviation, the minister of finance and the CBN Governor are still working to ensure the balance of the funds are released to the airlines and a mechanism is developed to avoid the repeat of this.
“If you remember when this government first came into power; 2015 and early 2016, there was the same case of about $600 million, which through the efforts of the minister ensured the funds were released to the airlines, but unfortunately, six, seven years later, we found ourselves in the same conundrum, but I know all efforts are being made at the high level to settle this.
“But, we cannot force any airline to operate in Nigeria; we can encourage them, we can talk to them, but it is a commercial decision for an airline to decide a number of frequencies and where they operate to. If the passenger load is not there, you cannot force them to operate. If they believe they have other difficulties and challenges that affect their operations into certain airports, it is their decision. I cannot force or manipulate any airline to operate in Nigeria. We can only encourage them,” Nuhu added.