The National Union of Air Transport Employees (NUATE) has raised an alarm over an alleged conflict of interest between the Ministry of Aviation and the Assets Management Corporation of Nigeria (AMCON) over the call that the Nigerian Civil Aviation Authority (NCAA) should not give the latter’s new airline – NG Eagle – its air operating certificate.
NUATE Secretary-General, Ocheme Aba, who raised the concern on Wednesday at a press conference in Lagos, called for the intervention of the Presidency in the dispute.
According to him, the ministry appears jittery that NG Eagle may truncate the setting up of a national carrier promised Nigerians by the present administration as the clock is fast ticking on the project.
Aba stated that AMCON was on the verge of setting up NG Eagle out of Arik Air which was indebted to the government to the tune of N300 billion which necessitated the assets managers take over the toxic debts.
He added that the ministry, which was also perfecting plans to set up Nigeria Eagle, feared AMCON’s airline might take the shine over the one promised by the government.
In his reaction, the spokesman for the ministry, Dr James Odaudu, said the union’s allegations were baseless.
He stressed that the Minister of Aviation, Hadi Sirika, was never against the establishment of any private carrier.
Rather, Odaudu explained that Sirika has always encouraged people to invest in the airline business, saying this has led to many new entrants into the aviation sector.
The minister, according to him, has also given NCAA a free hand to carry out its duties without interference.
Read the full text of the briefing by the NUATE secretary-general below:
NON-ISSUANCE OF AOC TO NG EAGLE: A CALL FOR INTERVENTION OF THE PRESIDENCY
Protocol
You may recall that the Association of Nigerian Aviation Professionals (ANAP) and the FAAN Branch of Nigerian Union of Pensioners (NUP) did issue a joint press statement in which they urged the NCAA not to issue AOC to start-up airline, NG Eagle.
Their basis for that was their fear that Arik Air was transforming itself to NG Eagle and would thereby escape its heavy indebtedness to FAAN and other aviation agencies. They insinuated that Assets Management Corporation of Nigeria (AMCON), the Receiver Manager of Arik Air, was using the assets of the Airline to float NG.
The above-mentioned press statement has now transmuted into a petition by ANAP to the National Assembly House Committee on Aviation on which basis the Committee Chairman has asked (some say directed) the NCAA to withhold issuance of AOC to NG Eagle.
The Honourable Chairman was of the opinion that the Federal Government would lose revenue if Arik failed to pay its debt to FAAN in the form of 25 per cent statutory remittance to the Federal Government by FAAN.
Information available to NUATE, however, suggests that the issue of indebtedness of Arik Air to FAAN and the NCAA is only a smokescreen. It is understood that the real issue is the politics of a new national carrier.
Indications are that there is the fear on the side of the Minister of Aviation that AMCON has positioned its new airline, NG Eagle, to metamorphose into a national carrier, whereas the Honourable Minister has been labouring for the past six years to create one which he has named Nigeria Eagle.
As AMCON and the Ministry are both agencies of the Federal Government, there is clearly no possibility of the two airlines operating side by side as national carriers. The fear is that if NG Eagle succeeds, then the Nigeria Eagle project would be jettisoned. That means one of the airlines must bulge. This, we understand, is the crux of the matter.
This does not in any way downplay the significance of Arik’s indebtedness to FAAN and others. If anything, it suggests that there is a pressing need to find a solution to Arik’s heavy pile of debts. The above situation has pitted FAAN and NCAA on the one hand against AMCON on the other hand.
NCAA and FAAN are parastatals of the Federal Ministry of Aviation, while AMCON is a parastatal of the Federal Ministry of Finance and is also supervised by the Central Bank of Nigeria (CBN). The two Ministers, the CBN Governor, and the heads of the other agencies are all senior officers of the Executive arm of the Federal government of Nigeria.
Therefore, this executive fiasco alludes to the failure of the executive to put its house in order. This unfortunately paints a picture of a government at war with itself. And if this war is not quickly brought to an end, we fear that the aviation sector of the national economy will suffer dire consequences, especially at this time that the sector is going through a burdensome time grappling with the serious negative impact of the receding coronavirus pandemic.
The main purpose of this press conference, therefore, is to call the Presidency which is the apex of the Executive Arm of Government to duty over this serious malady in order to avert a major mishap in the aviation sector.
In particular, NUATE hereby calls on the Secretary to the Government of the Federation (SGF) and the Chief of Staff to the President (CoS) to urgently intervene in these matters and facilitate an immediate ceasefire and chart a path to progress on the sensitive issues.
We have to resort to this public medium, rather than private communication, to make this plea because it is our belief that the public should benefit from informed positions on the matter. Besides, there is no gainsaying the fact that the matter is already well within the public domain.
Why is the intervention of the Presidency necessary and urgent?
1. Because it is important to avert a chaotic end to Arik Air.
It is already within the public domain that AMCON is presently executing receivership management over Arik Air as ordained by a competent court since 2016. This came about by the Airline’s insolvency as a result of a heavy debt pile.
At the last count, Arik Air’s debt burden is in the region of three hundred billion Naira, whereas the Airline’s assets are worth only about half of its total debts. What this means is that Arik Air is unable to pay its debts. And it cannot under any circumstances. This is a solid fact that cannot be altered by the denial of AOC to NG Eagle.
The point here is that Arik Air or AMCON cannot raise N19B being demanded by FAAN and the NCAA. And it is honestly unhelpful to create enmity with FAAN or NCAA for Arik Air or AMCON since the Airline will always need the support of the two Agencies to survive.
Therefore, those proposing that AMCON’s NG Eagle’s AOC should be on hold until Arik Air’s debts are settled are only pushing AMCON to the wall; and that is towards liquidation. Considering the airline’s low worth compared to its huge debts, liquidation will bring about a chaotic end to Arik Air by which all parties will be losers. This should be avoided by all means.
Therefore, the intervention of the Presidency is needed to foster understanding on the issue of indebtedness of Arik Air to FAAN and other Government agencies with a view to aiding AMCON to continue with its rescue efforts in the Airline which is the best option for now to safeguard all interests.
2. Because jobs matter.
Should there be a chaotic end to Arik Air by way of liquidation, the workers would count among the greatest losers. You are all witnesses to the untold hardship that befell ex-workers of the defunct Nigeria Airways after the Airline was unceremoniously liquidated by the Obasanjo regime in 2014.
It took an intervening period of twenty years and spanned four governments – the governments of Obasanjo, Yar’Adua, Jonathan and Buhari – before the hapless workers began to get some reprieve in terms of their terminal benefits. No one should be so wicked as to wish a similar experience for Arik workers.
Therefore, the intervention of the Presidency is urgently needed to grant AMCON the space to continue to protect the employment of over two thousand employees. This will also afford the Unions and the Management to negotiate severance benefits for Arik workers; a process that is presently at concluding stages.
In the same way, denial of AOC to NG Eagle will shut out twenty thousand potential jobs for Nigerians, together with the opportunity for a reasonable number of Arik Staff to migrate to the new Airline.
This would be very unfortunate indeed. The pleaded intervention by the Presidency will avert such a catastrophe. And for NUATE as a trade union, this is exceedingly important. We feel all trade unions, including ANAP, should have the same view.
3. Because the integrity of NCAA must be protected by all means.
One of the biggest casualties of this imbroglio is the apparent desecration of the holiest place in aviation, the NCAA, being the regulator of the industry. Political actors have ceased the stage to interfere and dictate to the Authority on whom to and whom not to issue certificates.
This has thoroughly denigrated the NCAA and whittled its autonomy or independence granted by the Nigerian Civil Aviation Act. If this farce succeeds and NG Eagle is denied AOC despite meeting all requirements, but forces outside NCAA says otherwise, it would be a dangerous precedent capable of tumbling the entire industry and wiping out all the gains in safety and international recognition achieved over the past years.
Therefore, the intervention of the Presidency is urgently needed to avert the flight of integrity out of the NCAA processes by assuring that only technical issues stated by Nigerian Civil Aviation Regulations (NCARs), as have been already met to our knowledge, dictate the issuance of AOC to NG Eagle.
In our humble view, the stakes are too high for our Nation to allow individuals’ interest to jeopardise national interest, especially as another round of International Civil Aviation Organisation (ICAO) Safety Audit and United States of America Category One certification beckon.
4. Because AMCON needs praise, not vilification.
It is on record that the intervention of AMCON in aviation has achieved two important objectives. By pursuing a rescue, rather than liquidation, of Arik Air and Aero Contractors when it was actually easier to liquidate, AMCON has saved or protected thousands of jobs and saved the industry from sudden collapse.
For this, the corporation should be praised, not vilified. The apparent gang up against the interest of AMCON represented by the withholding of AOC to NG Eagle amounts to a repudiation of the gratitude that the aviation family owes AMCON. And NUATE is truly disturbed by this.
As you all may recall, during the period of failing of some critical banks such as Keystone, the intervention of AMCON in the banking sector then was to protect the depositors, not the wayward owners of the banks. By doing so, the faith of depositors which is absolutely essential for banking was retained, and the banking industry was saved.
Therefore, the intervention of the Presidency is called upon here to protect AMCON, not from payment of debts, but to maintain focus on rescuing the industry from wayward airline proprietors and colluding or condescending public officers. AMCON’s intendment for setting NG Eagle cannot be countermanded and should be rewarded with quickened assent by all authorities concerned.
5. Because the negative politics of national carrier is unhealthy and unhelpful to the national cause.
NUATE would rather not be involved with the war between the Ministry of Aviation and AMCON over the burning question of establishing a national carrier. But, the intervention of the Presidency on the matter has become urgent because of the high stakes for Nigeria. It is indeed important to state the overriding need for a national carrier at this time. What is at issue is the best method to bring it about.
Many argue that the Ministry has taken all of six years, and still counting, to form a national carrier that will not be owned by Government, but AMCON has utilized a few months to achieve the objective, though, the nature of the Ministry’s effort is very obvious to aid comparison.
Our plea is that the Presidency should be able to positively intervene on the matter, in our view to determine the workability of both efforts and chart a progressive path towards a quickest possible establishment of a worthy national carrier for Nigeria. In this wise, nothing forecloses a marriage of efforts on both sides.
In conclusion, it is the desire of NUATE to not inflame passions over these issues. Our interest is in seeing that the seeming war of attrition does not spill and cause a crash of Nigeria’s flight to progress in the aviation industry. Therefore, NUATE’s call for the urgent intervention of the Presidency in the current circumstances is borne out of goodwill and absolute good faith.
It is our hope, therefore, that the Secretary to the Government of the Federation and the Chief of Staff to the President will harken to our call to duty by taking urgent steps to ameliorate these simmerings that are likely to keep us away from meeting our objectives and targets.
God bless us all.
Comrade Ocheme Aba, General Secretary, National Union of Air Transport Employees