Africa: Operators Decry Lessors’ Blacklisting of Nigerian Airlines
Operators in the Nigerian aviation sector have decried the blacklisting of Nigerian airlines by major leasing companies.
With the blacklisting of the country, domestic carriers would now find it difficult to acquire aircraft through leasing.
THISDAY’s investigation revealed that Nigerian airlines are now left with the only option of outright purchase of aircraft and used equipment, which are still sold to them at exorbitant costs.
This development, according to the operators, contributed to the depletion of commercial aircraft fleet in Nigeria, from about 60 aircraft two years ago to about 30 presently.
The Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Muhtar Usman, who confirmed that major leasing companies like Aircab and Seagold have blacklisted Nigerian carriers, said the regulatory authority and the federal government have been working to restore confidence of lessors and other suppliers to the Nigerian market.
Usman said the action of the lessors followed series of default on agreement by Nigerian airlines, which leased aircraft but refused the lessors from taking back their aircraft when they failed in their agreement obligations.
He said the regulatory authority had assisted some lessors recover their aircraft, adding that the NCAA was working to make the judiciary stop giving interlocutory injunction, barring lessors from taking back their aircraft.
According to him, the regulatory body abides by the principles of Cape Town Convention.
He said: “The situation we are now is that we are trying to educate the judiciary to understand the implication of an operator that leases an aircraft under the Cape Town Convention and reneges.
“And instead of abiding by the agreement and the provision of the Convention, they now run to the court to frustrate the efforts of recovery of the aircraft and thereby giving Nigeria bad name.
“That is what we are trying to educate the judicial sector to understand the negative impact it is having on the aviation growth in Nigeria. It is very damaging.”
The Chairman of Air Peace, Nigeria’s largest carrier, Chief Allen Onyema, who also confirmed the development, said blacklisting of Nigeria by lessors has adversely affected the airline’s operation.
Onyema narrated his experience when his airline wanted to lease about 10 aircraft to replace those that would be going for major checks this year.
According to him, his request was turned down because Air Peace is a Nigerian airline and the country has high country risk.
He said: “Nine of our aircraft are billed to go for major check this year. We have started sending them out since February. So, I wanted to lease aircraft to replace the ones that will go on check, but when I made request to leasing companies; after commending the airline on its integrity and goodwill, the risk department of the leasing companies will say that they would not lease aircraft to us because Air Peace is a Nigerian entity.
“In the letter they wrote to us they said that Nigeria is politically unstable; that we don’t obey the rule of law. In fact, I replied them and told them to stop stigmatising my country. We have four aircraft that would go on maintenance, which means that we will lose 36 flights every day and that is why we wanted to lease the aircraft but they refused to give us, describing Nigeria as unsafe and risky environment,” he said.
Also speaking on the issue, the Business Development Director of Medview Airline, Ishaq Na’Allah, said the blacklisting of Nigeria by leasing companies was dangerous for domestic carriers because they could not easily acquire aircraft despite the fact that Nigeria is signatory to Cape Town Convention, which makes it easier for member nations to obtain mobile equipment like aircraft.
Na’allah said it was difficult for Nigerian carriers to acquire new aircraft because they have to order the equipment, which takes about two or more years for the airline to get supply.
He added that since most airlines rely on leasing and lessors have blacklisted Nigeria, it means that domestic operators would find it very difficult to acquire aircraft.
“This blacklisting portends danger to us because we cannot run away from it. It is very costly to buy new aircraft and when you order, it takes time before you will have the aircraft. So, all of us depend on leasing but they have blacklisted us because some airlines did not meet their obligations.
“The problem is that if you go to any other vendor they will be reluctant to attend to you because they talk to themselves. We have been trying to get around this problem in our operations. Once you are blacklisted by any of them, the words will go round and they will not be willing to deal with the country. Even when they do, you will get aircraft at very high cost,” Na’Allah said.
The operators said the blacklisting also affected insurance and cost of spares as suppliers tend to hike cost of service and cost of spares because Nigeria is designated as having high country risk
The CEO of Aero Contractors, Captain Ado Sanusi, who also spoke on the blacklisting, said because of series of defaults by some Nigerian carriers, the lessors decided not to lease aircraft to indigenous operators.
“Nigeria has reached that point where there is subtle blacklisting. When a country is blacklisted, there is no official letter written to you, telling you that you have been blacklisted. It is when you now go to the market to get these assets and you are turned down or you are given ridiculous and outrageous prices to discourage you from leasing the aircraft,” Sanusi said.
The Aero CEO said this should have not been so as Nigeria domesticated Cape Town Convention, which enables commercial airlines to lease aircraft and other mobile assets without hindrances in order to ease aircraft acquisition for Nigerian carriers.
He added that one major condition for leasing aircraft is that in case of default or disagreement between the lessor and the airline operator, the leasing company should be assisted to recover its equipment by the country’s government and civil aviation authority.
“The important thing is why did Nigeria domesticate the Cape Town Convention? The reason is that Nigerian airlines can have easy access to acquisition of aircraft globally and we can pay our lease rentals as and when due.
To give assurance to the owners of these assets, is that when they feel that there is default he can take back his airplane, his engine or whatever he has leased to you out of the country without any hindrance; be it from the regulator, be it from Customs or from the legal system. After that you can now start talking about the terms of the agreement and whether it was infringed upon,” Aero CEO said.
By Chinedu Eze