No fewer than 13 Nigerian airlines have been blacklisted by international aircraft lessors for various contract breaches, NewMailNG gathered.
The blacklisted airlines are: Aero, Air Peace, Arik, Azman, Dana, Green Africa, Ibom Air, Max Air, NG Eagle, Overland, Reno Air, United Nigeria Airline and Value Jet.
The domestic airlines were blacklisted, first, for refusing to pay lessor fees over a period of time, contrary to the terms of their contracts.
Secondly, some domestic airlines took international lessors to court and refused to return their airplanes on demand after breaching the payment terms.
The contract between domestic airlines and lessors stipulates that the latter can demand the return of their aircraft in cases of payment refusal. Instead of working to reach an agreement with lessors, some domestic airlines sought legal solutions even after failing to pay lessor fees. This angered lessors, forcing them to take stringent measures against Nigerian airlines, industry sources told our correspondent.
Lessors are firms or persons who lease or let airplanes to other entities for use. Lessors who have blacklisted Nigerian airlines include: Planesense, Jetcraft, AerCap, Air Lease Corporation, Avolon among others.
The development has since impacted the operations of local carriers and made it difficult for them to compete favourably with foreign airlines on international routes.
Right now, only few Nigerian airlines are able to secure wet leased aircraft, and not dry lease aircraft contracts which are more profitable for the airlines.
Wet lease arrangements, when provided by lessors, are exploitative to the airlines, experts say.
In a dry lease aircraft arrangement, the owner provides the aircraft to the lessee without a crew. Neither party is required to have an air carrier certificate so long as the aircraft does not carry people or property for compensation or hire. The lessee typically exercises operational control, including legal responsibility of the aircraft under this lease type.
But under a wet leasing arrangement, the owner supplies the aircraft as well as crew members. The owner assumes operational responsibility, which includes performing maintenance, procuring insurance, and other legal responsibilities. This then means that most profits realised from aircraft operations go to the lessor and not the airline.
Impact is dire
The impact of the blacklisting is that the current aircraft shortage bedeviling the aviation industry has worsened, and analysts are predicting that airfares and ticket racketeering could jump.
“Apart from foreign exchange problems, there is also the blacklist problem that airlines are facing with aircraft lessors. There are people who ordinarily would want to invest in the industry but because of the behaviour of some other people in the past, they won’t,” Emeka Nwafor, managing director of Anambra International Cargo and Passenger Airport, told NewMailNG.
Nwafor said lessors who leased aircraft to some Nigerian carriers have had their hands burnt over past failed contracts, forcing them put Nigerian airlines on a blacklist.
“Our people do not obey laws. Some aircraft leasing arrangement is supposed to be a stop-gap for a short period. Even with the foreign exchange problems, an airline is supposed to be able to lease aircraft and pay for monthly rentals without needing so much money. But this is not happening at all because of the current blacklist,” he said.
Aircraft shortage continues
NewMailNG had earlier reported that, in the last few months, few aircraft have had to feed several passengers on domestic routes as Nigerian airlines struggle with fleet reduction on high cost of maintenance.
Airlines that have sent their aircraft on maintenance are unable to return them as a result of the skyrocketing maintenance costs due to foreign exchange scarcity.
Others have been forced by the Nigeria Civil Aviation Authority (NCAA) to ground their aircraft for their inability to send the aircraft for maintenance.
Data from NCAA shows that 13 domestic airlines operate a total of 91 aircraft. This data includes aircraft that have gone on maintenance.
Sources said apart from Dana Air that has been grounded locally, over half of the 91 airplanes have gone on maintenance, putting a strain on the few operating aircraft.
Five years ago, when just 10 domestic airlines operated on Nigerian routes, they had over 120 fleet.
Local operators are handicapped
In a recent interview, Festus Keyamo, minister of aviation, said local operators are handicapped because they don’t have access to aircraft that international airlines have on the same terms.
He said, “Nigeria is on the blacklist to get dry lease aircraft around the world. This is the diplomatic visits I have been undertaking since I came.
“I have been trying to assure aircraft manufacturers such as Airbus and aircraft leasing companies that we can protect their assets if they bring them into Nigeria because what they want is the assurance from government that when these assets are brought into Nigeria, we can allow them take their assets away if there are breaches to these agreements.”
Obiora Okonkwo, chief executive officer, United Nigeria Airlines, said that airlines are happy that the minister has agreed that there is a problem in aircraft leasing and access to equipment.
Okonkwo said it is a policy that needs to be addressed, noting that it is the business of the operators to source the aircraft but there are areas that must be addressed.
“I do not see the reason why modern-day operators should suffer the sins of the old-time operator because any lessor will tell you that there have been some violations in the past. Today, we are not violating any lease arrangements but we are rather victims,” he claimed.
Aircraft shortage across Nigeria has seen the Lagos -Abuja route experience passenger glut than other routes as airlines, which charged between N60,000 and N80,000 three months ago, now charge as high as N200,000 or more for a one-way ticket on the route. Passengers have no choice, and have had to cough out the sum.
The situation has also led to ticket racketeering in domestic routes as Nigerian airlines struggle with fleet reduction.
Limited availability combined with high demand creates a perfect storm for scalpers, leading to a notable uptick in passenger extortion and a thriving black market for airline tickets.
Additional reports from Kayode Ogundele
