By Mathew Dadiya, Abuja
The Presidential Initiative on Continuous Audit (PICA) in the Federal Ministry of Finance, Budget and National Planning, has commenced a mop up verification exercise for former workers of the defunct Nigeria Airways, who were not audited during the previous exercise.
The Ministry has in September 2018, conducted a similar exercise in the six geo-political zones and were paid 50 percent of their severance entitlements in line with the directive of President Buhari.
The latest verification, is holding simultaneously in Lagos and Kano, and is meant to ensure that all eligible beneficiaries are audited and paid off their entitlements.
The Permanent Secretary, Special Duties in the Ministry, Dr. Mohammed Dikwa, represented by the Deputy Director Procurement, Mr. Izerebu Iyugun John, stated that, the exercise was in furtherance of the government’s commitment to ensure that all former workers of the defunct airways got their benefits.
Dikwa assured the ex-workers at the two centres that the Federal Government was committed to paying their dues once they were audited, and advised them to cooperate with the verifiers and ensure that they provided all the documents required for the exercise.
Daily Asset recalls that the Nigeria Airways was liquidated in 2004, without its almost 6,000 workers being paid any entitlements.
However, following continued agitations by the workers for their entitlements, President Muhammadu Buhari, in 2018, approved that all audited staff of the organization should be paid 50% of their severance entitlements.
While thanking President Muhammadu Buhari for this bold and commendable step, the Secretary General of Nigeria Airways Pensioners Union, Comrade Segun Adeleke, said his members will ever remain grateful to the President for coming to the rescue of the ex-Nigerian Airways workers, who had lost hope of receiving anything from the government.
Similarly, the National Vice Chairman of the Union (North), Comrade Mohammed Adamu, thanked the Honourable Minister of Finance, Budget and National Planning for bringing the plights of his members to Mr. President.
Comrade Adamu also noted that only about 500 of the ex-Airways workers would be audited in the mop up as most of all the eligible workers had been audited and paid 50% of their severance package after the earlier exercise in September, last year.
Airline Operators Warn of Imminent Domestic Flight Ticket Rise to N100,000
Nigerians may soon pay as high as N100,000 for domestic flights if the lingering high cost of aviation fuel continues.
This is the position of domestic airlines under the aegis of Airline Operators of Nigeria, who also blamed foreign exchange among other challenges they are facing.
Spokesperson for local airlines and Chairman, United Airlines, Prof.
Aside from the lingering aviation price hike crisis, the airline chief said local operators were being compelled to source foreign exchange from the parallel market at high rates due to a lack of adequate supply from the Central bank of Nigeria via the commercial banks.
Consequently, he said an increase in the base economy flight ticket to at least N100,000 might be inevitable for all domestic airline operators if the current situation persists.
“Obviously, it is inevitable. I can tell you that all the airline operators, in the last three months, have been losing money, a huge amount of money. There is too much stress on the operational fronts for them to break even. Even if the aviation fuel is made available, there must be a review to reflect the minimal operational cost. We are offering patriotic services to the nation and understand the essential part of it. We are part of this economic development process in Nigeria but it is coming at a very huge sacrifice,” Okonkwo said.
He added, “Nothing less than N100,000, between N100,000 and N120,000 base price, even with Jet A1 fuel at N400 – N500. That is what it is.”
In this regard, he added that meetings with the CBN ad yet to yield any positive result in the provision of adequate forex.
He further stressed the need for the aviation industry to be seen as an essential service that should have special consideration in financial matters.
Okonkwo clarified that the operators have no joy in increasing fares but it has become necessary for them to avoid shutting down and running out of business.
He added, “In the industry, it is expected that you will gain some here and lose some here but the biggest challenge indigenous operators are having is that the cost of everything is high. You source money from the commercial bank rates. You source money from the black market. No moratorium for your loans and the banks and AMCON are quick to jump on you.”
Corroborating this view, the Chief Operating Officer, Ibom Air, Mr. George Uriesi, said local airlines had reached a point in their operational cost whereby “something has to give in.”
“Something has to give in. It’s either the prices of fuel that come down or the prices of airfares go up from where they are. So far, the airlines have tried very much to work within the airfares as they are. All sides of the divide are aware that the airlines have done the best that they can do.
“I don’t know what tomorrow holds but at some point, if the airline doesn’t survive, it goes down, to the detriment of everybody-the people who work for the airline, the people who fly on the airline, the country’s economy, everything goes down. So, airlines are just trying to be stable and patriotic. That’s where we are,” Uriesi said.
Uriesi, a former managing director of the Federal Airports Authority of Nigeria, said it was difficult to tell how long the local carriers would be able to continue with the high operational cost.
“It’s very hard to say, we are watching the business every day, we’re watching a number of parameters. We’re watching the load factor, we’re watching the yield per passenger, we are watching the cost of operating at the price we’re paying every day which keeps going up every few days. So, the truth from this is that, when it becomes clear that you will not be able to sustain yourself, then you’ll have to adjust some of your indices, always taking into consideration the ability of the passenger to pay because you can’t just raise prices just because fuel has gone up. If you issue what they can’t pay, then you will not carry anybody, you would have committed suicide.”
However, industry experts said the unfolding development would not augur well for the local airline industry, saying it could make its outlook bleaker.
The Chief Executive Officer, Centurion Aviation Safety and Consult, Group Captain John Ojikutu, (retd), said, “This is not a good sign for the domestic airline industry. We should ask ourselves why the four refineries have not been working for the past 20 years. If you have refineries and crude oil, and you are refining, there should be no reason for the type of increase in aviation fuel price we’re having.
“Even when this fuel gets back to this country, we transport them by fuel tankers when in other countries they transfer them through pipelines.”
According to a former Managing Director of Associated Airlines, Mr Alex Nwuba, foresee a reduction in passenger traffic if airfares become too high.
“We didn’t die when flights couldn’t operate during the COVID-19, people adapted so people will adapt. They may just have to forfeit some trips that are not important and focus on trips that are important. They could also decide to choose alternative methods of travel when the fares are too high,” he said.
A former Director of Operations, IRS Airlines, Kenneth Wemambu, said, “Airlines have been losing money. A business person, if the cost of operation increases by over 200 per cent, you will need to avoid running the business. This is why the possibility of an airfare hike can’t be ruled out.
Unions Raise the Alarm over Plot to Take over Arik, Aero
The National Union of Air Transport Employees (NUATE) and the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) have raised the alarm over an alleged plot by some groups to take over Aero Contractors and Arik.
The Asset Management Corporation of Nigeria (AMCON), the nation’s bad debt manager created by the Federal Government, owns majority shares in both Arik Air and Aero Contractors.
The General Secretary, NUATE, Ocheme Aba; and Deputy General Secretary, ATSSSAN, Francis Akinjole, said the unions had accused the management of Aero Contractors of planning to reduce 40 per cent of its workforce.
The union leaders also alleged that the management of Aero had refused to address the company’s failure to complete the redundancy payment for those it asked to stay at home since 2016.
As a result, the unions in a joint statement appealed to the National Assembly, ministers of Aviation, and Labour & Employment, to initiate an intervention that could save both Aero and Arik.
In a joint statement, NUATE and ATSSSAN, said, “We would have been silent on Arik Air for now, but for the fact that the House of 5A’s lease arrangement that was chased out of Aero has found its way into Arik Air. Disturbingly, there is evidence of a case of collusion between the management of Aero and Arik Air. As we understand, the new lease arrangement was to come into operation last Friday but got shelved.
“Though we are yet to be furnished with Arik’s share of the spoils under this arranged contraption called a lease, we can say authoritatively that, like in Aero, the House of 5A’s aircraft have been gifted Arik’s juicy routes of Lagos/Abuja/Lagos, Abuja/Port Harcourt/Abuja, and Abuja/Kano/Abuja based on the released schedule.”
It added, “We consider this to be mischief beyond bounds, and a joke taken too far. Surely, we will not co-habit with this toxic agenda. Therefore, we shall immediately direct all Arik workers to withdraw all services from this aircraft if, and when, it comes to our knowledge that indeed the same level of toxicity as in the case of Aero also applies in this case in Arik.”
The aviation union, therefore, asked the Minister of Aviation, Hadi Sirika; the National Assembly and other relevant stakeholders to initiative probes into the circumstances surrounding the rumored selling of one or both of the airlines to “the promoters of 5A’s for cheap after the airlines must have been forced to the ground by an artificially created financial crumbling.”
“We also call for a strong and deeply reflective interface among the Ministry of Aviation, AMCON, and the legacy shareholders of Aero Contractors and Arik Air for the purpose of knocking out a deal that could truly rejuvenate the airlines,” the statement added.
The management of Aero Contractors has, however, responded to the claims of the unions tagging them as “wild and unfounded.”
In a statement released by the management of Aero Contractors, they described the actions of the unions as “pure mischief.”
The statement read in part, “On the House of 5A’s, every partnership was done with the aim of improving the revenues of the airline, particularly in relation to our unserviceable equipment and ensuring standard customer service. The question is what was our revenue before, during and after the exit of the House of 5As? They should please respond.
“We are conscious of the challenges we are facing and have been prudent with our expenses, and doing our best to take care of staff welfare. We urge the staff and unions to desist from this attitude and support the company to overcome its challenges.”
Nigeria will Increase Investments in Aviation Safety, Security, Buhari Assures ICAO
President Muhammadu Buhari has disclosed that Nigeria will deploy more investments aimed at the provision of infrastructure and facilities for safe, secure, environmentally friendly and sustainable civil aviation.
This is just as the Aviation Minister, Senator Hadi Sirika, justified the current aviation fuel scarcity in the country, saying the situation was not peculiar to Nigeria alone.
The president, who spoke Tuesday while receiving in audience the Secretary General of the International Civil Aviation Organization (ICAO), Mr Juan Carlos Salazar, at the State House, Abuja, said Nigeria will support the ideals and aspirations of ICAO and achievement of its strategic objectives, in collaboration with other member states of the organization.
According to him, “Nigeria became a member of ICAO Council in 1962 and since then, it has continued to make valuable contributions to the Council’s work and its activities.
“It is pertinent to also mention that Nigeria has been playing a key role in supporting the implementation of ICAO policies and programmes internationally, and particularly in the African region.
“To this end, Nigeria has ratified international air law instruments like the Montreal Protocol and amendments to some articles of the Chicago Convention. Nigeria is also championing the cause of Aviation safety, security and facilitation in Africa.”
The president told the ICAO delegation that he has approved the establishment of Aerospace University in Abuja to cater for research and development, as well as provide manpower for the industry.
“In this regard, Nigeria is looking forward to the continued support of ICAO under its ‘No Country Left Behind’ initiative,’’ he added.
President Buhari also noted that the Nigerian Government has established independent agencies in order to enhance aviation safety and security, while ensuring effective and efficient provision and management of infrastructure in all aspects of the industry.
“These include the Nigerian Civil Aviation Authority for safety and economic oversight of the industry; the Nigerian Airspace Management Agency for air traffic services; the Federal Airports Authority of Nigeria for management of government-owned airports; the Nigerian Meteorological Agency for meteorological services; and the Nigerian College of Aviation Technology, the nation’s main aviation training organization, established in 1964 in collaboration with ICAO and the United Nations Development Programme.
“Nigeria is fully committed to working with other states and support the implementation of the Global Aviation Safety Plan, the Global Air Navigation Plan, as well as the Global Aviation Security Plan,’’ the president said.
As part of its support, President Buhari said Nigeria, over time, seconded auditors to support various ICAO programmes in the areas of safety and security.
“We have also contributed experts on various ICAO technical panels, commissions and working groups.
“The Government of Nigeria has adopted a civil aviation policy, which is centred on liberalization and Public-Private-Partnerships Initiative. These have resulted in huge investments in the nation’s airports infrastructure and services, increased capacity utilization and phenomenal increase in the number of domestic operators. Indeed, the domestic and international traffic has experienced a tremendous growth since our assumption of office in 2015.
“Nigeria is the headquarters of the Regional Safety Oversight Organisation, the Banjul Accord Group Aviation Safety Oversight Organization and also, a major contributor and participant in the Regional Accident Investigation Agency, the Banjul Accord Group Accident Investigation Agency,’’ he added.
According to the president, Nigeria recently made a robust donation to the ICAO voluntary Air Transport Fund in order to be part of the global efforts for recovery from COVID-19 crisis.
“We have also made significant financial contribution to the Safety and Human Resource Development Funds, in addition to hosting several ICAO meetings and regional workshops, including the widely acclaimed successful third ICAO World Aviation Forum, as well as several other workshops on safety oversight,’’ he said.
Also speaking at the event, the Minister of Aviation, Sirika, commended President Buhari for the giant strides taken under his administration in the areas of aviation safety, security and development.
“Our profile improved significantly during your tenure, Mr President. Passengers rose from eight million to 18 million in four years, while security and safety also went up significantly,” he said.
Earlier in his speech, the ICAO scribe lauded what he called “the leadership role Nigeria plays in civil aviation in Africa”, saying the country’s record is one of the most impressive in the world.
“The number of airports have doubled, passengers are growing in spite of COVID-19. The record of safety is the most important performance indicator of all. I recognize the excellent work by your government to maintain high standards, in line with international best practices,” Salazar said.
Stressing that it’s important to maintain the track record, the ICAO Secretary General stressed that there was no end line in civil aviation, “we keep chasing targets that go on and on”.
He urged President Buhari to sustain the support being given to the sector, to attract further investment, tourism and continued growth.
Addressing newsmen after the visit, the aviation minister said aviation fuel scarcity with its attendant high cost was not peculiar to Nigeria.Sirika also gave reasons for the high cost of the product globally and what the government was doing to arrest the spiral in the price of the commodity.
His words: “The scarcity and high cost of Jet A1 in civil aviation is not peculiar to Nigeria. It is a global phenomenon driven by many factors.“Some of them include even low capacity to refine the product. It’s also high demand around the world, it has increased activity and increased number of airplanes out there and users of this jet A1.
Plus also the Ukraine crisis and many more. It’s a time when crude itself is so expensive today, it is in the hundreds of dollars per barrel and only the high cost of Jet A1 product in Nigeria. Also the peculiarity of the fact that we’re not refining the product, so to speak. “And I did address the press a couple of days ago, saying that by the grace of God, perhaps once the Dangote refinery is online or if the government fixes the Port Harcourt refinery, which is now ongoing, we will begin to refine this product and sell it.
“And as a stopgap measure, interim measure, there’s an agreement that the airline operators of Nigeria would nominate either from out of themselves or from other major oil marketers to be given the opportunity to import this product. Then also get the necessary foreign exchange for that purpose. And that will now increase more supply and perhaps drive down the cost. “So this is not unique to Nigeria. And unfortunately we’re going through this phase, but civilization from time to time always survives challenges. They come, unfortunately, but then you see civil aviation graphs keep going up. We hope that this is a temporary thing around the world and we hope that Jet A1 will be very available everywhere and at the very good price. “And we will hope, in the future, that we learn to do away with all these carbon emitters and have much more cleaner energy, which will be more readily available for everybody on a very cheaper cost to make civil Aviation transportation, the preferred choice.”
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