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Law on Full Ticket Refund in Existence Since 2015, NCAA clarifies

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The Nigerian Civil Aviation Authority (NCAA) has explained that the law on 100 per cent refund on air tickets in case of three hours delay is not new to the Nigerian Civil Aviation Regulation (NCAR), saying that it was gazetted by the Federal Government and has been in existence since 2015.

The agency has also clarified that in cases of natural phenomena, the airlines would not be sanctioned by the agency, describing them as force majeure.

Director-General of NCAA, Capt. Musa Nuhu made this known in an interview with aviation journalists in Lagos over the weekend, expressing concern that most passengers don’t report to the regulatory agency whenever their rights were impugned upon but pointing out that soon, NCAA would commence a campaign to educate the travelling public on their rights and the available report channels.

According to him, before the 2015 amendment to the extant regulations, airlines were supposed to pay 100 per cent compensation to passengers after two hours of delay, but the regulatory agency amended it to three hours in order to accommodate the complaints of the indigenous airlines and in a bid to ensure fair play for all.

Nuhu insisted that whatever Sen. Hadi Sirika, the Minister of Aviation said on compensation, recently was not new, stressing that the minister was not reinventing the wheel.

He stated that airlines were given Air Operators’ Certificates (AOCs) based on the fact that they would comply with civil aviation regulations, maintaining that once any of the carriers is found wanting, the agency would not hesitate to sanction such an airline accordingly.

Capt Musa Nuhu
DG, NCAA

Nuhu said, “The minister was just referring to NCAA in his statement. Before the amendment to the regulation, airlines were supposed to pay full compensation to air travellers the moment their flight is delayed for two hours, but during the review, the operators complained that the two hours was too short. Then, it was extended to three hours.

“We will implement the new law to the letter, but if the consumers don’t complain, how can we know? We need to educate the passengers about their rights. All airlines were given AOCs based on the fact that they will comply with the regulations. During our surveillance, if we find out that they don’t comply appropriately, we will sanction.

“But, on the issue of force majeure, you can’t sanction them. It is an act of nature and even, the law recognises this.”

The NCAR 2015 Section 19.6.1.1 as amended indicated that for domestic flights, when an operating air carrier reasonably expects a flight to be delayed beyond its scheduled time of departure, it would provide the passengers with reason(s) for the delay within 30 minutes after the scheduled departure time.

It states that after two hours, refreshments as specified in section 19.10.1 (i) and telephone calls, SMS and e-mails as specified in section 19.10.2; while beyond three hours, reimbursement as specified in Section

19.9.1(i) ; and (iii) at a time beyond 10pm till 4am, or at a time when the airport was closed at the point of departure or final destination, the assistance specified in sections 19.10.1 (iii) and 19.10.1(iv) (hotel accommodation and transport).

For international flights, the regulation said that when an operating air carrier reasonably expects a flight to be delayed beyond its scheduled time of departure, it would provide to the passengers between two and four hours, compensation as specified in sections 19.8.1 (i) and telephone calls, SMS, e-mails as specified in 19.10.2.

Besides, it said for a flight that is delayed for more than four hours, meal as specified in 19.10.1 (ii) and telephone calls, SMS, e-mails as specified in 19.10.2; and (iii) when the reasonably expected time of departure is at least six hours after the time of departure previously announced, the hotel accommodation assistance as specified in sections 19.10.1 (iii) and transport assistance as specified in 19.10.1(iv).

On compensation, the regulation said passengers would receive at least 25 per cent of the fares or passenger ticket price for all flights within Nigeria and 30 per cent of the passenger ticket price for all international flights.

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Aviation

Airports for Concession, Not Privatisation

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John Ojikutu

The Honourable Minister of State for Aviation has recently briefed the public and industry stakeholders of government plans to concede certain airports to private investors as part of larger plans to privatise some public enterprises. Following the Honourable Minister’s briefings, there have been some emotional reactions from the public and more too from aviation stakeholders who ordinarily should be better informed of what has, over the years, been the financial travails of the sector but yet find the government plans of airport concession unacceptable.

The government probably decided on concession and privatisation or outright sale because of the failed commercialisation of most public sector services and enterprises. There were public enterprises that were fully commercialised like the NLG and the refineries which were expected to operate as profit-making commercial ventures without any subsidies from the government. These are expected to raise funds from the capital market for capital projects without a government guarantee and were expected to use private-sector procedures in running their businesses.

There were other enterprises like FAAN and NAMA which were partially commercialised and were expected to cover their operational costs from their internally generated revenues (IGR). This category of enterprises enjoyed grants from the government to finance their capital projects, just as the federal government had done in the past for them with the ₦19.5 billion aviation intervention fund in 2007, the grant of about $200 million from the BASA fund for the refurbishment of some airports, and the $500 million loan from China for the redevelopment of the major international airports.

Using the air traffic and passenger traffic statistics of 2014-15, the expected yearly revenue from FAAN in particular, whose facilities are planned for concession, is reported to be about N65 billion from both aeronautical (N61.5 billion) and non-aeronautical (N4.5 billion) sources. However, the chunks of revenue earnings generated have not substantially impacted on the airport infrastructures and services. For instance MMA alone that is reported to be generating about ₦2 billion monthly is worth more than ₦3 billion monthly or ₦36 billion ($100 million annually) in earnings from passenger service charge aircraft landing and parking, on both international and domestic traffic and various concession on non aeronautical services within and around the airport. Unfortunately, the airport does enjoy up to 5% of the revenue for the periodic maintenance of the airport infrastructure and services. If MMA is given out for concession today in the global market, it could generate conservatively about ₦110 billion ($300 milliom). Today the total IGR earnings on the twenty international airports is less than ₦70 billion ($190 million).

The problems of government enterprises in the sector are largely caused by the incessant huge debts of the domestic airline operators to the public operators and weak accountability of the regulator particularly of the NCAA, which has the critical role to play in checking the excesses of both the airlines’ operators and the public operators FAAN and NAMA.

The Nigerian aviation sector is just one of the three major means of transportation, providing air transport services to less than 10 million Nigerians, compared to the road and rail providing transportation services for over 60 million Nigerians annually. Air services enjoy government patronage the most, with various forms of intervention, grants, and guaranteed loans. All these are in addition to the huge revenues generated that have not significantly developed or improved the airports’ infrastructure and facilities for sustaining safe air operations. There has been no efficient and effective oversight by the responsible authority to ensure that the sector in the last sixteen years complied with a five-year budget plan as required by the Nigerian Civil Aviation Regulations 2006, Part 18.10.5.

What has developed over the years in the industry is a mixed system, one of partial commercialisation, where the government injects subsidies or intervention funds into the public enterprises, and full commercialisation, where the government gives autonomy to some public enterprises in the sector. What the government plans to develop now, and what is developing worldwide, is privatisation and concession, where the government extends partnerships to private enterprises and investors to develop the sector. This is a concept that is being adopted by most developing countries whose aviation infrastructures are expanding fast but whose development funds are limited, as with our own case. Most countries are finding it a positive advantage to adopt the policies of public-private partnership (PPP), full commercialisation, and concession of public enterprises. These options offer government savings for other social sectors of the economy and reduce unnecessary costs and duplication of efforts.

Privatisation or outright sale of public enterprises to private investors in Nigeria, as articulated by a Social group in 1988 as part of Structural Adjustment Programme (SAP), could be emotive and controversial “Privatisation is a means of exposing public enterprises to private investors or bringing private ownership, control and management into public enterprises. The objective is to increase productivity and efficiency, and to improving the financial health of the public enterprises with sufficient savings for the government from the suspended government subsidies.”

Broadly defined, privatisation could include concession and all forms of PPP; but if narrowly defined, it would exclude concession and could mean outright sales. However, whatever definition is being applied, the objective is securing private investors’ management and operational expertise and investment, Similar to the MM2 concession to Bi-Courtney.

It still seems to some stakeholders that the concession of MM2 was shrouded in some kind of executive secrecy. The government, therefore, needs to assure stakeholders that the planned concession is with better intentions. Generally, there are three key features of a concession. Firstly, it does not involve the sale or transfer of ownership of physical assets, only the right to use the assets and operate the enterprise. Secondly, agreements are for a limited period of time, up to or less than thirty years depending on the context, content, and sector. Thirdly, the government, the owner of the assets must retain much involvement on the oversight in the concession through regulatory agencies.

It is expected that whatever the government would give out for concession would be well defined along these three features in order to avoid the pitfalls of past attempts. The government must bear in mind existing agreements or concessions with the Chinese government on the development of the four airports of Lagos, Port Harcourt, Abuja, and Kano, ditto with similar agreements with Bi-Courtney. The government must also be mindful of the fact that about twelve out of about twenty federal airports are joint users with the military, these include the international airports.

The government should be very clear in its plan as to what assets or infrastructure it would give for concession without disrupting the agreements with existing private operators and joint-users arrangements with the military. The plan for airport concession now should not include those aeronautical infrastructures, facilities, and systems that are necessary and critical for the conduct of flight operations, rescue operations, emergency management services, airport security systems, and national security. These are the state’s responsibility and mandatory obligatory functions to the ICAO as contained in various annexes to the Chicago Convention, essentially on aerodrome standards, air traffic control services, and airport security and so on. All these could be fully commercialized, as they are the practices elsewhere. The concession, on the other hand, should not be different from the one between the government and Bi-Courtney, and essentially for non-aeronautical infrastructural facilities and services which includes operations and management of the passenger, cargo terminal buildings and the handling facilities; aircraft parking areas with handling facilities, car, trucks, parks and toll gates.

All aeronautical facilities that are left in FAAN’s assets after the concession of non-aeronautical facilities could be merged with NAMA assets. Runways, taxiways and their associated lighting, and emergency and rescue management systems could remain part of the universal air traffic services systems. NAMA could, therefore, be fully commercialised like the ATNS of South Africa. FAAN, on the other hand, should function as a commercial holding company to oversee the management of the airports under concession.

The government should ensure that future management of the remaining domestic airports is included in the concession plans. In other words, none of these domestic airports should be left behind; otherwise, the initial reasons for the concession would be defeated. Therefore, for every international airport terminal available for concession to a company, three to four of the domestic airports should be given along with the concession.

The concession of airports, like that of the seaports in 2006, will increase capacity, invariably increasing air, passenger, and cargo traffic. It will reduce budget allocations to airports and increase revenue generation. The ports’ concession increased the capacity by over 300%; the cargo has increased from 7 million tons to about 25 million tons, and it has reduced budget allocations but has increased port revenue generation.

In addition to all these, the government should concern itself with the designing of achievable policies and programmes that would enable it to meet contemporary visions for the industry in this twenty-first century. Such policies should ensure that the responsible aviation authority provides the baseline for implementation of the concession, and the investors provide regular business plans every five years to meet the requirements of the Nigerian Civil Aviation Regulations, 2006, Part 18.10.5. The first-line approach is to ask: has the NCAA been ensuring that Bi-Courtney Airport Services complied regularly with the NCAR provision?

(Group Captain John Ojikutu (rtd) is an Aviation Security Consultant and Secretary General of the Aviation Safety Round Table Initiative)

This opinion article was written in May, 2016.

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Hope Rises for Aerospace University, as NUC Gives Provisional Approval

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Aviation Minister, Hadi Sirika presents the Concept Note for the establishment of the African Aviation and Aerospace University Abuja to the Executive Secretary National Universities Commission, Professor Abubakar Adamu Rasheed

The quest by the Federal Government, through the Ministry of Aviation, to establish an Aviation and Aerospace University has been boosted by the assurance of the National Universities Commission (NUC) to expedite action on the concept document submitted by the Minister of Aviation Senator Hadi Sirika.
Executive Secretary, National University Commission, Professor Abubakar Adamu Rasheed who gave the assurance after receiving the note from the Minister, said the commission will engage some professors to perfect the concept note for immediate approval.

A statement by the Director, Public Affairs, Ministry of Aviation,  Dr James Odaudu quotes the Executive Secretary as saying: “I can assure you that by the end of the month (July), we are going to have a brand new University, the first of its kind in Abuja, first African University dedicated to aviation and aerospace study in the country”.

According to the Executive Secretary, the value of such university can’t be quantified and commended the Minister for his boldness and courage.
“This aviation under your guidance, will be the first to show the way that we can support the establishment of specialized university that won’t only serve us but serve the African region and the International community”. He stated.

Presenting the Concept Note earlier, Aviation Minister, Senator Hadi Sirika who was accompanied by the Ministry’s Permanent Secretary, Directors and Heads of Agencies, said that the ‘African Aviation and Aerospace University Abuja’ will be dedicated to research and development of knowledge in Aviation and Aerospace.

The Minister stated that the decision to establish the specialised university was informed by the need to fill some identified gaps in the growth and development of the aviation sector.

“When we took the leadership in civil aviation, we identified and understood the gap in the growth and development of civil aviation in Nigeria in particular and Africa in general. We are deficient in research and development in civil aviation and aerospace technology and that has caused a lot of underdevelopment of the sector and made us to be backward”

Sirika further said that the huge gaps and deficiencies have left the Civil Aviation sector to be managed with basic knowledge of either being a pilot or aircraft maintenance engineer, with no one going into research and development to understand the Civil Aviation and Aerospace industry to grow it for our own betterment and leverage on the sector to recreate the economy, improve the wellbeing, add to the GDP and most importantly to expend knowledge horizon of Nigerians.

“We have been working three to four years now into this and we developed a concept note based on the advice by Executive Secretary NUC for critique and that will fast track the process of setting up the University. We come up with concept note of what will be the focus of this University” he explained.

He added that “the potential of this University to serve the market of civil aviation and aerospace within the continent cannot be overemphasized. Once the University takes off, a lot will happen and it will change the dynamic”.

Sirika expressed gratitude to the Executive Secretary and his team for guiding the process leading to the submission of the concept note, and the assurance that it will be expeditiously concluded.

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We’ll Stop Airport Concession if Any Job Loss Occurs – Sirika

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The controversy over whether the Federal Government will concession the four major airports in the country or not has been laid to rest, as the Minister of Aviation Senator Hadi Sirika Thursday said by the process will concluded and sent to the Federal Executive Council, FEC by February 2022

And for umpteenth time, minister has promised that there will be no job losses and if there will be any, concession will be halted.

Sirika, who was speaking at the Airport Business Summit in Lagos said, starting June 2021, the ministry will advertise and request for qualifications from bidders.

He assured that the bidders will be requested to demonstrate their competence, the financial and management capacity to handle the concession.

According to him, everything that will be done will transparent and in the best interest of Nigerians and due diligence will be done throughout the entire process.

Sirika said, the concession was not selling off the assets of Nigerians but rather a loan to make the airports better and business oriented to compete with other airports in the world.

“We are not going to sell because those that were sold were lost, so we in government believe that we should hold those assets for the Nigerian people in trust. But we must make those assets better to provide the service that is needed. So, we said rather than sell outrightly, we will concession. In other words, we would give it up to someone who would operate them, make them better and we get more money and the people will also enjoy better service and the industry grows and after certain time, it comes back to us. So, the decision has been made by government that we are not selling any asset any more and that we would do concession and get it back under certain condition”.

He said the proposal will be presented to the Federal Executive Council (FEC) in February 2022.

“We have a government that came in and is popularly elected and re-elected because we were able to offer something different and we understand that the committee on privatization of government entities.We in APC, which is the current government and the party in power do not believe that we will begin to sell the assets that belong to the 200 million people and the future generation of this country”.

Sirika stated that, everything about the concession process had been outlined in the business case and warned mischief makers to stop causing confusion where there is none, adding that they have engaged the best hands as consultants.

According to him, about 4 stakeholders engagement have been held to educate people on concession, its viability and benefits to Nigerians yet some stakeholders were not willing to accept that the concession is the way to go.

For transparency, Sirika said, he involved Labour which is not part of the law but just to show to all stakeholders that they had nothing to hide.

He said, “Once the concession happen, there will be no job loss. If we employ you and give you letter, it means you are qualified and equipped and therefore you will continue to be a FAAN staff, there will be no single job loss and as a matter of fact, we will be needing more hands”.

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