Routes of Controversies

Babalola Borishade

For designating intercontinental routes to Arik Air, a new entrant into the aviation industry, stakeholders rise up in arms against the authorities
By George Umunnakwe
Perhaps, to correct the imbalance and anomalies in the al location of international routes, frequencies, dual designation and open skies policies, the Federal Government recently designated two airlines for international routes.
This move, however, has torn the Airline Operators of Nigeria (AON) apart, as the body posits that the gesture is a systematic way of pushing them out of business.
In pointing accusing fingers at the government, AON questioned the rationale behind granting Arik Air, a start-up carrier a lucrative route, when in fact, some others have been in the industry for years without getting such support from the government.
The Olusegun Obasanjo administration had on Tuesday, July 25, 2006, designated two additional Nigerian airlines to the United States of America. They are Bellview Airlines, which will fly to Newark, New Jerssey and Arik Air, which has approval to fly to Atlanta, in addition to the United Kingdom.
Also designated alongside Bellview and Arik is Aero Contractors, which got the nod of the government to fly some regional routes in addition to Malabo and Accra, which it is currently servicing.
Arik Air was also asked to join Virgin Nigeria as Nigeria’s second carrier to the UK. By this gesture, the newest entrant into Nigeria’s aviation industry has been given provisional approval to fly to a small airport outside London.
Nigeria, instructively, has dual designation pact with Britain which permits two airlines from both countries to operate the routes between them.
But crying foul over the government’s latest move, AON in observing that the same government that wants to develop the industry is indirectly killing the sector, observed that the choice of Arik Air is nothing but baseless, prejudicial, fraudulent and another huge denial and disservice to the yearnings of its members who have been in the fore-front of the battle for upwards of 10 years. The oparators made this observation through a release signed by their Secretary-General, Muhammed Joji, a captain.
They further pointed out that Arik Air which is a start-up airline has no aircraft; cannot boast of reservation system; and is not a member of the International Air Transport Association (IATA); and has nothing on ground apart from its buildings and hanger bought from the now rested Nigeria Airways.
“Also, they have no experience on domestic, regional, and intercontinental operations.”
Further decrying the questionable gesture by the Federal Government, AON explained that government did not follow due process as outlined by the Nigerian Civil Aviation Authority (NCAA), in choosing the airline.
NCAA, according to its charter, requires any airline wishing to go into continental route to have operated in the country for up to two years; must have a good track record; have structures on the ground and must be a member of IATA. In addition, such airline must have capitalised to the tune of two billion.
Contending that the government in designating Arik Air disregarded all the by-laws, the operators further observed that Arik Air has not met the capitalisation requirement of two billion naira as stipulated by the authorities for airlines plying the intercontinental route.
AON lamented that unlike Virgin Nigeria, the promoters or core investors’ business background of Arik Air is not known. They, therefore, challenged the promoters to make public their identity. “Who are those behind the Virgin Nigeria project? Who are those behind the Arik Air project? And who are those behind the Airport Terminal building project? All these are ways some people in government are using to send genuine operators out of business. They should not remain faceless while pumping in monies through their proxies to their projects. They should be bold by making themselves known. We challenge them if they are sincere with what they are doing, to make themselves known,” the AON statement demanded.
However, investigations by The Source reveal the Arik, one of the latest entrants in the aviation industry, has invested a total of N45billion in the industry.
The airline which bought over Nigeria Airways properties, including its maintainance hanger and aircraft for N950million, has in the last two months, acquired two Boeing aircrafts, three CRJ200 aircraft and two brand new CRJ900 aircraft from Bombardier Incorporated. All these are alleged to be worth $300million (about N40billion). The acquired aircraft according to a source in the airline, would be used for domestic and regional operations slated to commence in September, 2006. Also, The Source was authoritatively told that negotiations are on for the procurement of more aircraft to service Arik's intercontinental routes.
Earlier, signposting what to expect in the industry, Minister for Aviation, Professor Borishade Babalola, had said that the new capitalisation deposits will not be paid to the ministry, but will be used to control access to the industry. This pronouncement, a source in the ministry said, gave Arik Air an edge over others, because of the enormous amount they have so far invested in the industry, barely months of its coming in.
Meanwhile, as the hue and cry rage, a former Director of Airline Operations in the defunct Nigeria Airways, Captain Dele Ore, has praised the move by the federal government. Ore noted that it will help to check the domination of most international routes by foreign carriers.
According to him, “If Arik Air passed the NCAA test, there is no problem about its designation, but if it did not, and government grants them the route, then there is something fishy somewhere. However, we are saying 'enough is enough' for these foreign carriers that have more advantages over our airlines. The playing field is gradually pointing towards a level playing field. It shows that government, and indeed all peoples, are listening to our agitations.”
Interestingly, Ore is not alone in praising the move, as Chris Aligbe, a former Public Affairs Manager of the liquidated Nigeria Airways, and now an aviation consultant, believes that the designation of both Bellview and Arik Air on the US routes must have been borne out of their ability to meet the latest capitalisation policy for airlines on international, regional, and domestic routes.
Aligbe: “Arik Air is equal to the task. And so is Bellview Airlines. Arik Air is sufficiently capitalised to meet the yearnings of Air travellers. They have equipment on the ground and are still trying to acquire new aircraft. I think we should give government credit for the move, rather than criticise them. At least government can be seen to be adhering to its reform promises. I praise them for this move.”
But denying the availability of new aircraft in the fleet of Arik Air, an aviation expert and co-ordinator of Chanchangi Airlines, Mohammed Tukur, pointed out that nobody can afford a new aircraft or outright purchase of an aircraft. He noted that new entrants into the industry come in with the same aircraft that old airlines are using
Tukur: “Nobody can afford a new aircraft or outright purchase of aircraft. All of them will come in with the same aircraft that we are operating with. When they come, they will occupy the position of those who are getting out. For instance, most of the new airlines are to fill the space created by the old airlines that are going under. So new entrants are welcome, but we are not threatened, not even by government decisions.”
This much was confirmed by the chairman, of Arik Air, Joseph Arumenu-Johnson, when at a forum he told journalists that his airline could have opted for brand new aircrafts in the Boeing family, but did not because it would have to wait for about two years to take delivery of any order made.