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“You Must be Creditworthy to Operate Airline in Nigeria”

27 Jul 2012

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Harold Demuren

Director-General, Nigeria Civil Aviation Authority (NCAA), Dr Harold Demuren,  in a chat with journalists at the Ministerial Conference on Aviation Safety in Africa in Abuja, identified the technical and economic conditions domestic airlines must meet in order to continue to operate. Chinedu Eze was there.

Economic audit of Nigerian airlines and their financial status
I want to make this very clear. Airlines should be financially healthy to operate. But some people are making some mistakes and I need to explain this. You may be a billionaire; you may have billions of dollars stashed in your account. You may show me those ones in your balance sheet and you can be riding in your Rolls Royse, gold; but if you don’t pay your workers your airline will be grounded. We, the Nigeria Civil Aviation Authority (NCAA), we have our own template for financial errors and we have our own risk factors. If you don’t pay salary of crew which affects safety, you cannot operate. You don’t have to tell me you are billionaire.

Look, some people are millionaires but they don’t pay their children’s school fees. They give bounced cheques to their wives. They are still millionaires; they are just irresponsible. At NCAA there are criteria that are used to set out conditions for an airline to operate. Once these conditions are met NCAA has no problem with you. Somebody may not even be a millionaire but he may have goodwill and what we call credit lines to run a safe operation. All I am saying is; please run a safe operation. Please understand this.

We are particular about paying salary of staff. And if your purchasing of fuel is on cash and carry basis then I am a bit worried. Just in case you don’t have money you will not take the necessary fuel. Fuel must be for destination and for alternative destination in case these guys (air traffic controllers) ask you to go to alternate airport if there is bad weather. Let’s say that another one that is very, very important is that you must at all times pay your landing and other charges. You must be credit worthy; you must pay your lessor; you must have enough money to buy spare parts because you are not going to jankara market. All these, to me, make an airline financially healthy. So even if you have N20 billion in your bank account and you don’t do this, I must respect you because you are richer than me but you have not met my requirements. So CBN can satisfy you that you are good; but for NCAA, I beg your pardon!
Conditions for getting International Air Transport (IATA) Operational Safety Audit (IOSA) certification

You must have your Air Operation Certificate (AOC) before you pass your IOSA because it is the requirement for IOSA. Without AOC nobody will talk to you, so you must pass our AOC. But when you pass your AOC don’t go back and sleep, you must pass your IOSA when you pass IOSA the Civil Aviation Authority must have its safety oversight functions. That is for our regulation. Safety sits on a tripod. One is the regulator, the other one is the airline, and the third one is the manufacturer. You see, all of us always stick together.
Fewer operating airlines on domestic route

I always discourage monopoly. We must always discourage monopoly. And to discourage monopoly there should be competition. The fares are high because the existing airlines have taken advantage of the situation. Do you pay the same fares when you are travelling for Christmas? It is the principle of demand and supply; nothing more. In the next six or more months do you know what they will do? They will bring more aircraft. You watch them. It is business. If you are selling bread and early in the morning you finish all the bread you have, what do you do? You get more.

Dana Air crash and compensation
We have learnt our lessons from the past after all the beating from ADC and Sosoliso Airlines. We have stepped up our standards and thank goodness this one has adequate insurance. The money in London is ready. The only thing delaying us is the identification of the bodies. This is difficult. Identification of bodies, I have gone through it before. It is traumatic. I have not slept three hours in a day of my life since the accident occurred. People are in mortuary; they cannot take unidentified bodies. I am calling every family whose relatives are involved in the accident. Sometimes when they go, four will receive, one will throw us away and they will tell me, “If you come we will stone you; you kill our people.” I am not the airline, but we must do our work.

You know why they always mention NCAA? It is because nobody can do it, but NCAA can do it because we have come out very strong. And we take the responsibility. If that had happened 20 years ago who would be talking about NCAA? They paid their insurance and that is good so the money is there. Because of the way the people died we have to do DNA test. I think that will come in the next week or so. That is when you will begin to see obituary in the papers.

IOSA Certification as condition for operating domestic airlines in Nigeria
The condition that will be given to Nigerian airlines is not that they should be members of IATA; they should just pass the IOSA exam. That was what I explained. We are interested in the safety audit. You don’t have to be member of that organisation, and that’s why IATA said that many other airlines that pass IOSA are not members of IATA. So please understand it; we are not saying they should be members of IATA.
Look at the accident that just occurred; look at the bombardment. Everybody is saying that all the problem is with the Civil Authority, but it is not the problem of the regulation. That is not the issue; the regulations are in place. What is being talked about, which I think is important, is that we need to see our airlines move on to higher levels. This will be a great opportunity for us. Not only us, all of Africa. You can see the consensus here. Nigeria is leading this but it is important; the airlines need to improve their system and this will make the work of the regulators very simple. That is what we are asking they should do, particularly in the area of flight dispatch.

It is important that we make our airlines pass IOSA. We don’t say they should join IATA, but if you want to go into international operations, I have news for you; if you don’t join IATA you can’t compete. Do you know why IOSA came in? There were too many audits. Every airline you want to interline with because of insurance will come over to come and audit you. So you find that one airline will do 20 audits in a year. They were not doing any other thing except audits. I have taken part in this. When we were in Flight Foundation that was what we were doing all over the world. So that was what they were doing all the time. After sometime they decided to have a body that will be doing this. It is like when you pass West Africa School Certificate examination everybody recognizes it because it is a general examination. That is what IOSA is all about.

So the airlines joined together and formed IATA. If you want to work with us, this is the standard. It is like a Premier League. If you don’t get this and that you are out, we are not interested. This is the level it must be. So that is exactly what happened. But what we are talking about is that it is only their operational safety audit. Let me tell you the audits that are available today: ICAO, FAA Cat 1 and then IOSA. These are the three main audits in the world. But ICAO addresses Civil Aviation Authority; FAA addresses Civil Aviation Authority, only IOSA addresses the airlines.

Certification of airport infrastructure
If there is no money you can do nothing. I say that this airport is ok but there is no perimeter fencing so you have to provide money to fix it. If you don’t have fire-fighting equipment you must buy them.
We talked about fire-fighting equipment, now we have got many; we talked about ambulance, now we got them; perimeter fencing, we are doing it. They talked about runway lighting, we must do it. We must meet those requirements before we licence the airports. I will not licence the airports unless they met those set out conditions because it is dangerous. Infrastructure costs money; they are very expensive to do. The state can put the money down. It is not for the airline to do; it is not for us to do; it is the state and they must do it; if they don’t do it, I will shut down the airport.

Managing issues at agenda session (at the Ministerial Conference on Safety)
We manage the issues through consensus. And it is good that we are getting there. There are a lot of issues like issuing papers without due diligence. I get it every day so I know. I call my colleagues and tell them, go to hell; you must do this and this and some of them tell me that they get political pressures and I tell them if the aircraft comes here I am going to impound it and I am going to arrest the crew.
While we are mourning for those who died at the Dana Air crash, you saw me move to go and talk to those for the Hajj operation who are going to airlift pilgrims for the Umrah because it is a major issue. People want to come because you have the passenger; people want to stick into it. They all know what they are doing. If you don’t stop it; Dana Air carried 153 passengers; hajj flight will carry 500 passengers.
We cannot be popular. When you do your work they say you are too strict; when you don’t do it, they say you have taken bribe, so head or tail, you cannot win.

Measures put in place to monitor set out safety conditions to improve Africa’s airspace
It is not only asking the Director Generals of Civil Aviation Authorities to insist that the conditions are met by the airlines, but there must be political will to do these things. Without political will you cannot do it. Nigeria is big. Maybe these other countries have one or two international airports but we have many and our domestic operation is strong. Unknown to us we have grown in the last five years. We have grown a lot, so Nigeria is different; thank God, God bless Nigeria it has grown better than the rest; they have money so they can do things. And Nigerian government is doing a lot. If for example, you are dealing with Kotoka Airport 1 (in Accra, Ghana) you can spend all your money there, but in Nigeria you have to do 17 airports. When you look at the managing director of Federal Airports Authority of Nigeria (FAAN) you should put three caps on his head.
Bio Data

Dr. Harold Olusegun Demuren is an Aeronautical Engineer. He was appointed Director General of the Nigerian Civil Aviation Authority in December 2005.

In 1965, he won a Soviet Union Government scholarship to study Aeronautical Engineering in the former USSR.
He obtained Diploma in Russian Language at the Moscow State University, Moscow, USSR (1965–1966). He proceeded to Kiev Institute of Aviation Engineers, Kiev in former Soviet Union where he obtained Masters of Science in Aeronautical Engineering (M.Sc.) in 1972 and then to Massachusetts Institute of Technology (M.I.T.), Cambridge, Massachusetts, U.S.A. for his Doctor of Science D.Sc. in Aircraft Gas Turbine and Jet Propulsion Engines (1975)

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