About seven airlines applying for Air Operator’s Certificate have failed to complete it or have abandoned the process, The PUNCH has learnt.
According to findings by our correspondent, investors apply for certificates to run airlines all the time but many of them take a long time to complete the process, while some abandon it altogether when they are unable to meet the requirements.
The AOC is the approval granted by the Nigerian Civil Aviation Authority to an airline operator to enable it to use aircraft for commercial purposes including charter and cargo operations.
Information obtained from the NCAA showed that as of the end of November, the AOC certification process of seven intending airlines had been declared dormant, while four were on hold.
Before the process was stalled, the airlines had reached different stages out of the five required to get the AOC.
One of the seven intending airlines that had been declared dormant was at the fourth stage, three were at the third stage, one at stage two and two at stage one.
According to findings, one of the intending airlines abandoned the process since 2015, at the second stage.
The General Manager, Public Relations, NCAA, Mr Sam Adurogboye, said process of getting an AOC could be stalled if the operator failed to return to continue with the procedure or if he failed to meet the requirements at any stage.
“Getting an AOC to run an airline whether scheduled, non-scheduled or private is rigorous and capital intensive and is in five stages,” he said.
The first stage according to Adurogboye, is the expression of interest, where the applicant seeking an AOC makes an initial inquiry. This is followed closely by the second stage of application.
The third stage, he explained, remained the most rigorous and also known as the document evaluation phase, where the applicant would be expected to acquire airplanes, get an office, hire all the personnel for the operation, get insurance, submit his feasibility study and pay commitment fee depending on the flight operations.
He added that at the fourth stage, the operator would be required to carry out flight demonstration, which entailed flying an empty aircraft to and from his intending destination whether local or international before he would get to the final stage, which is the issuance of the certificate, valid for about four years before renewal.
According to Adurogboye, the processes, though capital intensive, are standard practices all over the world to ensure that the operator has what it takes to run an airline.
“It is capital intensive, but you must not have all the money to buy aircraft, you can lease for a start but the planes must be less than 22 years,” Adurogboye said.
Despite the rigorous process and the multi-billion naira involved, many investors apply for AOC from time to time.
Currently, there are about 28 airlines intending to get the AOC for scheduled and non-scheduled operations.
There are also about 31 airlines in the country with active AOCs with eight of them operating scheduled flights.
According to stakeholders, the operating environment makes Nigeria’s airline business one of the most expensive globally without a commensurate ticket price as Nigerian passengers are said to pay one of the lowest fares around the world.
But while many intending operators had fallen by the wayside, other investors are going ahead with it and more people are willing to come into the industry.
The Chairman, Air Peace, Allen Onyema, told our correspondent in a recent interview that the attraction might be due to the glamorous nature of the industry or the crowd they saw at the airports.
He said, “But they forget that Nigerians pay the cheapest fare worldwide and it is only through fares that airlines make money. Even when you carry a full load, you don’t make one per cent gain in Nigeria, you only count losses. All over the world, the gains from commercial aviation is marginal.
“Nobody gains anything here, it only gives you name. And if you are talking about investing, you must think about safety, which means you must be sure of who is in your cockpit and pilots earn a lot. A lot of people come in and close down within months.”
According to him, airlines start making a profit after seven to 10 years if they are able to manage well, adding that even at that, it will also be marginal at about two to three per cent.
The Chief Operating Officer of Dana Air, Obi Mbanuzuo, said most investors coming into the industry were not aware of some of the challenges until they started the process.
He added, “First and foremost, the regulator does not allow you to have just two airplanes for schedule service. Although there are many other things to do in the industry, people don’t do it, they prefer to run an airline, without knowing the challenges.