Aviation expert calls for scrutiny of indigenous airlines’ financial health by NCAA

The Nigeria Civil Aviation Authority (NCAA) and other responsible organisations have been advised to beam their searchlight on the operations of indigenous airline operators in order to know their health status.

The Chief Executive Officer (CEO), Centurion Securities Service, Grp. Capt. John Ojikutu, in an interview with NewsTimes in Lagos, said that it was pertinent for the apex regulatory agency in the sector to critically carry out an examination of the airlines before issuing them Air Operator Certificate (AOC) or Air Operator License (AOL).

Need for regular oversights

According to him, regular oversight and audits of the earnings of the airlines by the respective authorities would keep the airlines on their toes, stressing that none of these was in the public domain.

  • He said: “There should be many concerns for us about our domestic commercial aviation sector, which I believe need thorough examination by the responsible authorities before AOC/AOL are issued to them and when their operations begin, regular oversight and audits of earnings still by the same authorities.
  •  “None of these is effectively done on the public and private operators to know their financial health and we end up with unnecessary intervention funds, recurring debts among themselves and to external financial institutions.”

Ojikutu further explained that there had not been serious annual auditing of any of the public and private operators by the NCAA in recent years, no wonder the regular request for government intervention funds to private operators and grants to public operators from the available scarce monies meant for other critical social sectors like the health, education, agriculture and road network.

Airlines quitting operations

Ojikutu explained that several of the nation’s airlines had quit the scene because of several reasons, including bad business plans, poor corporate organisations and management, lack of knowledge in commercial aviation and corruption.

According to him, as a member of a Presidential Committee in the early 2000s, he was privy to the N19.5 billion intervention funds for government agencies in the sector at 25% interest rates in 2007 against the directive of the Federal Executive Council (FEC), while another N200 billion at 5% was also given to private operators from the Central Bank of Nigeria (CBN) without the knowledge of the Ministry of Aviation.

He regretted that to date, none of the responsible authorities, including Ministries of Aviation, Finance and National Planning and the National Assembly had been able to verify the actual earnings of any of the public agencies despite the approval of annual budgets for agencies.

  • “I have witnessed about four generations of private airline operators in this country coming and quitting at short lifespan. Most made money others did not,” he said.

FAAN and NCAA earnings

For instance, he said that the Federal Airports Authority of Nigeria (FAAN), which claimed N188 billion in earnings for 2022, should have generated about N250 billion from four aeronautical sources alone, while NCAA should earned about N50 billion from the Ticket Sales Charge (TSC), Cargo Sales Charge (CSC) and Customer Facility Charges (CFC).

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