Saturday, September 26, 2015

Buhari’s Anti-Corruption War : Business Slows Down For Charter Airlines

Charter airlines operating in Nigeria have been losing at least half a billion naira monthly since President Muhammadu Buhari came to power and started his anti-corruption crusade, findings by Saturday PUNCH have shown.

In the last four months, investigation reveal that 10 charter airlines have lost a combined revenue of $10.395m (N2.048bn).

Subsequently, some of the charter airlines, which used to enjoy the robust patronage of serving and non-serving top government officials, cronies and contractors, are now at the verge of closing shops following a sharp drop in business turnovers.

Sources in the charter airline sub-sector of the country’s aviation industry disclosed to our correspondent under the condition of anonymity that Buhari’s anti-corruption campaign had made most of their clients to boycott flying charter jets.

It was further learnt that serving governors, politicians, immediate past ministers, ex-presidential advisers, top government contractors including subsidy scheme beneficiaries and top civil servants, who used to charter airlines, had all stopped flying private jets.

Findings also revealed that associates of these serving and non-serving government officials, and their associates and family members, both close and distant, had also stopped renting private jets, a usual practice in the past.

A director in one of the aviation agencies who is close to charter jet operators at the Lagos airport, said, “Immediately Buhari took over, charter jet business started witnessing a gradual decline. But it became very worse when Buhari started the anti-corruption crusade.

“The fear of probe by the new government made most of our clients to run away. You know most of our clients are serving and non-serving top government officials, top government contractors and subsidy scheme beneficiaries.”

The CEO of one of the top local charter companies, who spoke under the condition of anonymity, also confirmed the development.

He said most operators were already returning some of the planes they leased from foreign leasing companies following the development.

He said, “The charter businesses have all been affected so badly, I used to do an average of 50 hours in a month. And this is the average for most of us the main operators. Now, I hardly do 10 hours in a month, it’s that bad.”

“I do about 60 hours per month at my peak, and about 43 hours per month at periods before the emergence of the new administration,” he added.

According to him, the condition has made some operators to return planes leased from foreign leasing companies in South Africa and United States back to them.

“Many of us (charter airlines) could not afford lease rentals (fees operators pay on planes to their owners) anymore because businesses are down, I mean virtually down completely.

“The law allows us to lease aircraft that because Nigeria has domesticated the Cape Town Convention. That was even the reason they released the planes to Nigerian operators in the first place.”

Following the downturn in business, he said each operator had returned between one and four aircraft to their owners overseas depending on the number of planes they leased from them.

Findings by our correspondent show that there are about 10 licensed charter airlines operators in Nigeria.

These are Austria-based Vistajets, United Kingdom-based Hanger 8 Aviation, Top Brass Aviation, Skyjet Airlines, Jed Air, Overland Airways, SkyPower Express, Arik Air, King Air and Associated Airlines.

However, there are still a number of charter flights operated by some helicopter companies which also have one or two private jets for charter in their fleet.

Also, there are still a number of companies which do charter under the licences of some of the licensed charter operators.

Further findings from government agencies and chief executive officers of some charter airlines showed that each of the main operators made an average of 50 hours per month before Buhari took over and began the anti-corruption crusade.

Specifically, charter airline operations ranged from 35 to 65 hours per month before the advent of the Buhari administration. This may come from an average of about three or four flights per week with each flight lasting for about two to three hours on the average.

According to the CEOs, the charter airlines charge between $5,000 and $8,000 per hour for the flights or services.

Read more HERE

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