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Nigerian Airline Status 2022 – What is next in 2023

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By Prof. Tilmann Gabriel

For the last 70 years, Nigeria is aiming to develop a healthy airline industry, originally as a one national airline construct, as so many other nations, then leaning towards a minority share with reputable airlines, now focusing on a primarily private airline industry, as customary in most economies around the world.

The only successful airlines in Africa are currently all owned by the respective Governments: Ethiopian Airlines, Royal Air Maroc, Egypt Air. Most other national carriers owned by their Governments like Kenya Airlines, South African Airways, Air Mauritius etc are struggling to survive, only possible by significant annual subsidies from the Government. What is the truth then, looking at this airline business, specifically in Africa?

Business is an infinite game, never ending, with new rules and new players all the time, frustrating for executives and employees to remain the number one, never sure if this is sustainable for the years to come. ‘Too big to fail’ is a book that describes the dilemma of executives who have to innovate a huge company to stay abreast with changing rules and aggressive new players. IBM, General Motors, Sears and others are such examples, and airlines like PanAm, TWA, Alitalia were considered too big to fail.

In Nigeria, the largest African nation by people (220 million, going towards 400 million in the next 30 years), all initiatives to launch a sustainable National Carrier were doomed to fail. Nigeria Airways, founded in 1958, was the longest symbol of Nigerian national pride. The author counted some 130 AOC (Air Operator’s Certificate) holders in Nigeria, which went under in those 70 years of Nigerian airline industry, assuming this is a world record. Many of these 130 airlines were only flying for a few years, after spending lots of money (an airline launch costs at least 150M USD today), energy and disappointed hopes. Nigeria Airways was the longest existing airline so far, shut down in 2003, after 45 years in the domestic, regional and international skies.

Key reason for the demise of Nigerian Airways was the involvement of the Nigerian Government, dictating fares, rules, and free tickets for many. No airline can survive such intervention in the revenue creation. Sucking the lifeblood out of an airline, which has critical costs in the US dollar (aircraft leases, fuel, foreign fees), is a sure recipe for failure. Eventually, the then Government was no longer able to substitute such failure. What happened with the next hope of a successful Nigerian airline project, Virgin Nigeria? An agreement for Virgin Nigeria, to use the same terminal for domestic and international operation in Lagos, was no longer honoured by the new Government elected in 2007. Eventually, the 51% Government majority share in Virgin Nigeria was left with the pull-out of Virgin’s 49%, and with it the loss of the international relations and the Virgin supplied aircraft. Successor Air Nigeria was not able to survive without the Virgin assets and expertise.

Why is Ethiopian Airlines successful then as a 100% Government owned airline. Not a short story. Over 70 years it grew mainly organically, slowly and with realistic budgets and expectations. The main difference was that the Management, still led today by the highly regarded Girma Wake as Chairman, was never directed by the Government and by the inevitable changes of Governments in a democracy. Today, Ethiopian is the leading African Airline, with a 20% profit margin and a strategic plan to double its fleet of 130 aircraft by 2035. Vision, strategy, and a highly competent management governed by a Board of experts is the key for success. Disruptive innovations, adjusting to the fast changes in aviation (for example ET’s new cargo focus during the years of Covid), lean cost structures and as a reliable contractual partner with its lenders and aircraft lease companies, have made Ethiopian a valuable African airline, winning awards, and global recognition.

Is this possible in Nigeria as well? The Buhari Government, early on in its 8 years of ruling, agreed on an aviation roadmap with a National Airline, a leasing company, a maintenance company, and an Aviation University as its key components. Under the Minister of Aviation Hadi Sirika, all these roadmap projects are well under way, proof of a successful strategic political direction of this Government of the last eight years. It is important that the next elected Government continues this direction and present a stable aviation industry in Nigeria to the world, based on international aviation laws and supportive political governance.

The Private Public Partnership (PPP) concept which governs all these aviation projects, ensure that it is not the Government and taxpayers’ money, which the success of these aviation companies is based on, but a consortium of industrial investors, carefully selected by the independent Infrastructure Concession Regulatory Commission (ICRC) governed privatisation process. This way the Government has initiated its political strategy to create a profitable aviation industry in Nigeria but sustain from political influence and the reliance on taxpayers’ money.

The African continent is looking into a brighter future, the aviation industry is going to grow rapidly, far behind the rest of the world. Airlines will be a key infrastructure development for the continent, driven by the African Union agenda 2063. African free trade, combined with an open sky for African based airlines is the prerequisite for this development, which shall improve the infrastructure of the continent and contribute well above 5% to the country’s Gross Domestic Product, but also create tenths of thousands of jobs. The Single African Air Transport Market (SAATM) will be the frame for the success of those African airlines which get it right. Serving not only their own country but many of the 54 African nations, as flying between those nations will be enabled by SAATM. It is high time that Nigeria therefore has a strong domestic airline to cope with the SAATM challenges of an Africa wide competition.

The existing airlines in Nigeria are organised in the Airlines of Nigeria (AON), and Nigeria Air, the new National Carrier, has meanwhile applied for its membership as well, becoming a respected party of the common interests of the Nigerian airline industry. Some member airlines objected recently against the Ethiopian shareholding (49%) in Nigeria Air, starting a court case, which will be heard on 16 January at a Lagos court. The Aviation Union called this recently an unpatriotic attack on the interests of Nigerian aviation. At the end, Nigeria Air will be launched, the AOC application is in ‘phase three’ at Nigerian Civil Aviation Authority (NCAA), the launch is very near. The PPP process governed by ICRC is also about to close, with the Federal Executive Council’s approval of the contracts with the investor consortium to be signed shortly. The decision process of selecting the preferred bidder consortium of respectable Nigerian owners and Ethiopian Airlines was completely transparent and managed by the ICRC governed PPP procedures.

Nigeria Air is ready to launch with a fleet of Boeing 737 on domestic services, is currently recruiting many Nigerian aviation professionals to help start the airline operation. The Operations Control Centre at the Abuja Airport is ready to be opened with most modern IT systems. The booking engines on the airline website and App will be available shortly with loyalty credit cards and other innovative pay systems. The immediate goal is to introduce all up-to-date customer service systems to make flying a pleasurable and easy-to-use enjoyment.

Nigeria Air will be a new competitor in the Nigerian market, adding to the existing airlines. As Michael Porter taught us many years ago, the five factors of competition are for all businesses to recognise, amongst them that all competition creates new business for all, as the customer has added choices. In short, the new year 2023 will have added choices for domestic flights for all customers, soon also on the regional and international markets. Nigeria Air has the strategic direction, with a solid business plan for the next ten years and a start-up budget of 250 million US dollars. The Nigerian Government only invests 5% into this start-up funding (12.5 million US dollars), in line with its 5% share in Nigeria Air. By the transparent and structured PPP process the Government has ensured a clear ownership structure, including the leading African airline, with a secured start-up budget which gives Nigeria Air a solid financial foundation. The Buhari Government had promised a new aviation industry which the future of Nigeria can rely on. It took hard work by the many involved, driven by a Minister of Aviation never tired of pushing this Buhari strategy in the last seven years.


Prof. Tilmann Gabriel lives in Abuja and researches and works on African aviation projects.

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Money Laundering: Air Peace Boss Indicted in the US for Obstruction of Justice

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They are mere allegations that’d be cleared  – Air Peace

A statement by the US Attorney’s Office in the Northern District of Georgia has confirmed the indictment of Allen Onyema, Chief executive officer of Nigeria’s largest airline, Air Peace for obstruction of justice in his long-standing money laundering case.

The Statement:

Press Release

CEO of Nigerian Airline and Co-Defendant Indicted for Obstruction of Justice

U.S. Attorney’s Office, Northern District of Georgia

ATLANTA – Allen Onyema, the Chairman, CEO, and founder of Air Peace, a Nigerian airline, has been charged in a superseding indictment with obstruction of justice for submitting false documents to the government in an effort to end an investigation of him that resulted in earlier charges of bank fraud and money laundering. Ejiroghene Eghagha, the airline’s Chief of Administration and Finance, was also charged for participating in the obstruction scheme, as well as in the earlier bank fraud counts.

“After allegedly using his airline company as a cover to commit fraud on the United States’ banking system, Onyema, along with his co-defendant, allegedly committed additional crimes of fraud in a failed attempt to derail the government’s investigation of his conduct,” said U.S. Attorney Ryan K. Buchanan. “The diligence of our federal investigative partners revealed the defendants’ alleged obstruction scheme, making it possible for the defendants to be held accountable for their aggravated conduct of attempting to impede a federal investigation.”

“These cases represent the continued commitment of the Drug Enforcement Administration to identify and hold accountable those who engaged in fraud and money laundering,” said Robert J. Murphy, Special Agent in Charge of the DEA Atlanta Division.

“Allegedly, Onyema and his accomplices fraudulently used the U.S. banking system in an effort to hide the source of their ill-gotten money,” said Assistant Special Agent in Charge Lisa Fontanette, Internal Revenue Service – Criminal Investigation Atlanta Field Office. “Today’s superseding indictment is indicative of the dedication IRS-CI special agents and our law enforcement partners have, as part of the Organized Crime Drug Enforcement Task Forces, to neutralize threats to the United States from criminal organizations.”

“The charges announced today demonstrate the criticality of diligence and truth in criminal justice proceedings,” said Steven N. Schrank, Acting Special Agent in Charge, Homeland Security Investigations Atlanta that covers Georgia and Alabama. “HSI and our partners are committed to pursuing those who seek to exploit our nation’s financial system and any efforts to cover up illegal activity.”

According to U.S. Attorney Buchanan, the superseding indictment, and other information presented in court: Onyema, a Nigerian citizen and businessman, is the CEO and Chairman of Air Peace, a Nigerian airline founded in 2013. Between 2010 and 2018, Onyema travelled frequently to Atlanta, where he opened several personal and business bank accounts. More than $44.9 million was allegedly transferred into his Atlanta-based accounts from foreign sources.

Beginning in approximately May 2016, Onyema, together with Eghagha, allegedly used a series of export letters of credit to cause banks to transfer more than $20 million into Atlanta-based bank accounts controlled by Onyema. The letters of credit were purportedly to fund the purchase of five separate Boeing 737 passenger planes by Air Peace and were supported by documents such as purchase agreements, bills of sale, and appraisals. The documents purported to show that Air Peace was purchasing the aircraft from Springfield Aviation Company LLC, a business registered in Georgia.

However, the supporting documents were allegedly fake – Springfield Aviation Company LLC was owned by Onyema and managed on his behalf by a person with no connection to the aviation business, and Springfield Aviation never owned the aircraft. The company that allegedly drafted the appraisals did not exist. Eghagha allegedly participated in this scheme as well, directing the Springfield Aviation manager to sign and send false documents to banks and even using the manager’s identity to further the fraud. After Onyema received the money in the United States, he allegedly laundered over $16 million of the proceeds of the fraud by transferring it to other accounts.

In May 2019, upon discovering that he was under investigation in the Northern District of Georgia for bank fraud, Onyema and Eghagha allegedly directed the Springfield Aviation manager to sign a key business contract, but also specifically told her to not date the document. In October 2019, Onyema allegedly caused his attorneys to present that same contract, now falsely dated as being signed on May 5, 2016 (prior to the bank fraud that began in 2016), to the government in an effort to stop the investigation and unfreeze his bank accounts.

Allen Ifechukwu Athan Onyema, 61, of Lagos, Nigeria, and Ejiroghene Eghagha, 42, of Lagos, Nigeria, were indicted on November 19, 2019, on one count of conspiracy to commit bank fraud, three counts of bank fraud, one count of conspiracy to commit credit application fraud, and three counts of credit application fraud. Additionally, Onyema was charged with 27 counts of money laundering, and Eghagha was charged with one count of aggravated identity theft. On October 8, 2024, they were both charged in a superseding indictment alleging an additional count of obstruction of justice and one count of conspiracy to obstruct justice. The case is criminal action number 1:19-CR-464.

Members of the public are reminded that the indictments only contain charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.

The Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Federal Aviation Administration, Department of Commerce, and Department of Treasury are investigating this case.

Assistant U.S. Attorneys Garrett L. Bradford and Christopher J. Huber are prosecuting the case.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

Mere Allegations – Air Peace

Meanwhile, Air Peace insists that its CEO Allen Onyema will be cleared of money laundering charges filed against him by the US.

Nigerian airline Air Peace has reaffirmed the innocence of its Chairman and CEO, Dr. Allen Ifechukwu Onyema, and Chief of Finance and Administration, Mrs. Ejiro Eghagha, following the expansion of legal charges by the U.S. Department of Justice (DOJ).

The management of the airline said they are confident that both executives will be exonerated, emphasising that these are still mere allegations with the case ongoing in court.

This came as the U.S. attorney’s office for the Northern District of Georgia filed a superseding indictment against Air Peace CEO Allen Onyema and Ejiroghene Eghagha, accusing them of submitting false documents in an effort to obstruct an ongoing federal investigation into their alleged financial crimes, adding new charges to the 2019 case that originally accused Onyema of money laundering involving more than $20 million.

Ryan Buchanan of the US attorney’s office said, “After allegedly using his airline company as a cover to commit fraud on the United States’ banking system, Onyema, along with his co-defendant, allegedly committed additional crimes of fraud in a failed attempt to derail the government’s investigation of his conduct,”

However, in a statement released on Sunday addressing public concerns, Air Peace stressed that both Dr. Onyema and Mrs. Eghagha remain innocent until proven otherwise, saying that the airline’s legal team is fully engaged and working relentlessly to ensure that justice prevails.

The statement read, “These charges levelled against our post-holders are part of an extended legal process stemming from earlier accusations of financial misdeeds that date back several years.

While the charges have been expanded, it is essential to emphasize that both Dr. Onyema and Mrs. Eghagha remain innocent and these are mere allegations, and the case is still in court. Our legal team is fully engaged with the matter and is working tirelessly to ensure that justice prevails. We remain confident that, through due process, the truth will be revealed, and our CEO and co-defendant will be exonerated.”

The company then reiterated that Dr. Onyema and his legal representatives have consistently cooperated with the relevant authorities throughout the legal process.

Air Peace then assured the public that despite the expanded charges, its daily operations, safety standards, and commitment to quality service remain unaffected.

“We want to reassure the public that these legal proceedings will not impact the safety, reliability, or day-to-day operations of Air Peace. The dedication and focus of our staff remain steadfast as we continue to provide you with the best aviation experience in Nigeria and beyond,” the statement added.

The airline expressed gratitude to its customers for their continued trust and support during this period, reassuring them of its unwavering dedication to maintaining the highest standards in aviation.

 

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Pilot Dies Mid-air flying Turkish Airlines Plane from US to Turkey

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By Ojone Grace Odaudu

A Turkish Airlines pilot has died after becoming ill on his own flight from Seattle on the north-west coast of the United States to Istanbul in Turkey.

Captain Ilcehin Pehlivan, 59, collapsed mid-air and a second pilot and co-pilot took over the controls, an airline spokesman said on X.

“When first aid to our captain on the plane was unsuccessful, the cockpit crew… decided to make an emergency landing, but he died before landing,” Yahya Ustun explained.

The Airbus A350 plane landed in New York and plans were then made to fly the passengers on to Turkey from there, he added.

Flight TK204 took off from Seattle shortly after 19:00 Pacific Time on Tuesday evening. The pilot appears to have got into trouble over the Canadian territory of Nunavut, before his colleagues took over and headed for John F Kennedy airport.

The plane landed in New York about eight hours after leaving Seattle.

Mr Pehlivan had flown with Turkish Airlines since 2007 and had been given a regular health check in early March, which found no health problem that might affect his job, the airline said.

Turkey’s air traffic controllers’ association, TATCA, said he had served the aviation community for many years and offered its condolences to his family, friends and colleagues.

The cause of the pilot’s death has not been released. Pilots have to undergo medical exams every 12 months, while those aged over 40 have to renew their medical certificates every six months.

In 2015, an American Airlines pilot aged 57 collapsed and died during an overnight flight from Phoenix to Boston.

The first officer took over and made an emergency landing in Syracuse.

At the moment, two pilots are required to be in the cockpit of a large commercial plane at all times.

However, the EU’s aviation safety agency says technology is being developed to enable a single pilot to operate large passenger planes during the cruise phase of a flight. Such a move would allow other members of the cockpit to rest, although the agency stressed there needed to be measures to ensure safety and to respond to crew becoming “incapacitated”.

The European Cockpit Association and other pilots’ groups have joined forces to challenge the initiative, arguing that reducing the crew at any time would gamble with safety on board.

(BBC)

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Hard Time Awaits Airport Rule Breakers, with Establishment of Magistrate Courts

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The Managing Director, Federal Airports Authority of Nigeria (FAAN) Mrs Olubunmni kuku has announced plans to establish magistrate courts in airport premises across the country to swiftly address violations of airport rules and anti-touting regulations.

The move is aimed at ensuring a safer and more comfortable environment for genuine airport users.

The MD FAAN, made the announcement during a meeting with heads of security agencies at the Nnamdi Azikiwe International Airport (NAIA) in Abuja.

The meeting was convened to brief airport stakeholders on recent developments, outline the authority’s strategic goals, and discuss ways to enhance passenger experience and facilitation.

Mrs. Kuku identified the presence of touts and loitering by members of the public as a major challenge to providing a comfortable experience for genuine airport users.

“There are people who have absolutely no business being at the airport, and they continue to create issues for us,” she said.

“We have an anti-touting taskforce, and as it is, we are going to start the prosecution onsite of those engaging in these illicit activities or loitering around the airport environment and harassing passengers. This doesn’t happen elsewhere around the world, and the airport should be a safe space.”

The MD/CE also addressed the issue of car hire operators violating processes and protocol, warning that such behavior would no longer be tolerated.

She emphasized the need to reduce manual baggage search at the international wing of the airport, proposing a process where baggage would be screened by machines, and security officials would view the contents in real-time, only pulling aside luggage that requires secondary screening.

Mrs Kuku said, “We have to streamline our efforts. We need to improve processes at the airport. This is the 21st century, and we must keep up with the times”.

She also announced that the Terminal C of the NAIA would be ready for use by December 2024, with plans to develop more international routes to take advantage of the underutilized International Terminal.

NAIA Military Airport Commander, Air Force Group Captain Abbas Hashim, thanked the MD/CE for convening the meeting and called for more regular meetings and better cooperation between the agencies and FAAN.

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