‘Why Nigerian airlines are yet to fully enjoy Cape Town Convention’

May 13, 2021
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Nigerian airlines are yet to fully key into the benefits inherent in the Cape Town Convention almost ten years after its domestication in Nigeria.

Former Director General of the Nigerian Civil Aviation Authority (NCAA), Dr Harold Olusegun Demuren had successfully secured the adoption of the Cape Town Convention by the Nigerian government which paved the way for the unprecedented modernization of airline fleets in the country.

The Cape Town Convention involves the domestication of all international conventions that a country is a signatory to.

Prior to the domestication of the convention in Nigeria, aircraft leasing companies across the world had avoided Nigeria like a plague owing to what they called the high rate of default on the parts of the Nigerian carriers in terms of agreement in purchasing aircraft.

According to the leasing companies many Nigerian airlines often flouted the gentleman agreements reached while leasing aircraft as they always frustrated efforts of the foreign companies to withdraw their aircraft whenever any Nigerian carrier defaulted in meeting the agreement entered into.

One of the ways the Nigerian carriers had deployed in frustrating the leasing companies of reclaiming their aircraft was by dragging them to court to obtain stay-of-action judgement against the leasing companies.

Following the bottleneck created by the action of the Nigerian carriers, the leasing companies blacklisted Nigerian airlines while few that chose to still lease planes to the Nigerian carriers introduced stringent conditions such as high premium insurance.

However, things changed for better when during Demuren as the DG of the regulatory body secured the domestication of the Cape Town Convention which paved the way for the Nigerian carriers to have access to aircraft leasing from the foreign lessors.

Following the domestication of the convention and the decision of the NCAA to henceforth stand as guarantor of those aircraft purchased by Nigerian operators,  if any airline defaults, NCAA is empowered to sign a release to enable the aircraft owner have the liberty to reclaim the aircraft without recourse to court.

While this has positively rebuilt the earlier lost confidence in transacting business with the Nigerian airlines, indications have emerged showing despite the benefits of the convention, Nigerian carriers are yet to adequately explore the opportunities.

In an interactive session with some aviation journalists, the seating director general of the NCAA, Captain Musa Nuhu attributed the inability of the airlines to leverage on the Cape Town Convention to what he termed the ghost of the past which continues to hunt the airlines.

When asked if the Nigerian carriers were really making good use of the Convention, he retorted: “Not very well, no. Because we have cases where people go and lease aircraft, come to Nigeria. They don’t pay and they don’t want to release the aircraft. So, it creates a bad reputation for the Nigerian market. That is why I tell you, when you do things. It is not one person, you are damaging the reputation of the country. So, when you go now and you want to lease aircraft, they will say that when the aircraft is due to return, you will go and bring one court injunction and you damage the whole country. It is damaging.

“Since I came onboard, I have successfully dealt with three cases with Cape Town Convention. There was an airline that took some engines and they didn’t  want to return them, we fought for it. There was a helicopter that was seized, we fought for it and they released it. There was an aircraft that we let go. If we don’t do that people don’t feel safe allowing their equipment into your country, even if you are doing, you pay excess and you pay a premium on the ongoing market rate and whatever profit you think you are going to make is wiped off.”

On the issue of if the regulatory body had enough aircraft inspectors, the director general opened up saying: “We certainly do not have enough inspectors. It is an issue that we discussed when we had a meeting with the Ministry of aviation. There are issues of condition of service. I cannot come and work for NCAA and I am 40 or 45 years old to come and start earning 25 per cent or 30 per cent because I want to work for NCAA. It was a very unfortunate situation.”

I for one cannot unilaterally address that issue. So, we have documents from salary wages commission. We met the Chairman and he confirmed they are working on it. That will resolve the issue on short term, but I am looking at the issue on a longer term solution. Because what is happening now, especially flight inspection operators, people in their retirement, they fly till 60 or 65 and retire. It is not a Nigerian issue.

“Flight operation inspectors is a global issue, even United States and Europe have that problem because the government cannot pay what the airlines are paying. But, we can put certain conditions to make it attractive for people, pre-retirement, who will come here out of career for 10 or 15 years. I am not against hiring people who are retired because they have certain experiences that we need.

“We should have the right mix with young people who will be in the system, growing and learning from them who will be there 10 to 15 years. Because if you have somebody retired, he comes, he works four to five years and he goes, it has a high turnover rate and that affects the continuity of the system. It is not very efficient because you spend a lot of money to train people who will just work for four to five years. I will rather have a right combination of them. Those elderly people are very critical and very important because they are certain knowledge and skills that you can only from them. But, also we still need the younger ones so that they can bring some kind of stability in the system. It is something we are working on and it is a long term plan.”

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