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Aviation sector shutdown: Operators, unions adamant

By Wole Oyebade
08 May 2022   |   4:30 am
The planned protest against the high cost of aviation fuel, attendant high cost of operations, and condition of service by airline operators, and workers’ unions have thrown the aviation sector into deep confusion and uncertainty.

MMIA set to witness reduced activity as airline operators shutdown from tomorrow PHOTO: AYODELE ADENIRAN

• NUATE, ANAP, AUPCTRE Set For Two-day Strike
• Airlines Divided, Inflate Airfares For Future Flights
• Consumer Protection Agency Worries Over Conflicting Signals
• We’re Not Disrupting Scheduled Operations, Ibom Air Tells Customers
• ‘Shutting Down Meant To Save Airlines From Collapse’
• NASS, Ministry Summon Emergency Meeting

The planned protest against the high cost of aviation fuel, attendant high cost of operations, and condition of service by airline operators, and workers’ unions have thrown the aviation sector into deep confusion and uncertainty.

While cracks have emerged in the ranks of the airline operators that are threatening to shut operations tomorrow, the two-day warning strike of the aviation workers’ unions is almost certain to keep all parties grounded tomorrow and Tuesday.

To further deepen the confusion, all airlines have continued to sell future flight tickets to customers, including tomorrow, which the Airline Operators of Nigeria (AON) has forewarned as to the commencement of the brief industrial action.

Following an appeal against the shutdown of operations, the National Assembly and the Ministry of Aviation have summoned the airline operators to a meeting tomorrow.

Other stakeholders, however, pushed back alleging operators’ attempt to arm-twist the Federal Government to another special intervention.

Local airlines had on Friday notified the Federal Government and the general public of plans to shut down all scheduled services indefinitely effective Monday, May 9, over the unbearable cost of aviation fuel that currently sells at N700 per litre.

The President of the Airline Operators of Nigeria (AON), Abdulmunaf Yunusa, in the memo endorsed by nine other airline chiefs, noted that the government’s earlier intervention in the aviation fuel crisis had failed to forestall imminent collapse, with Jet-A1 scaling the N500/litre benchmark.

Yunusa noted that no airline could survive with the astronomical increase in aviation fuel and high cost of operations, yet continue to offer subsidised airfares to the travelling public.

Already, the likelihood of a shutdown of local air transport services has raised panic in the aviation sector, with travellers jostling for available weekend flights amid a further spike in airfares.

At the risk of being caught in the disruption web, scores of air travellers yesterday raced to airports in search of available seats on Saturday and Sunday flights.

The Lagos domestic terminals were slightly busier than usual yesterday. A frequent traveller, Henry Ogunlolu, told The Guardian that he had to reschedule a Monday morning trip to Saturday (yesterday).

“It is strange that all domestic airlines could decide to go on strike. The first thought was that it is impossible, but this is Nigeria where even the most unimaginable things are happening. So, why not a sudden shutdown of the aviation industry?

“Again, I have an appointment that is all too important to miss and I can’t afford to leave it to chance. So, I had to look for the next available ticket and rather spend the weekend in Abuja. And whatever happens, we take it up from there,” Ogunlolu said.

Apparently, in response to the surge in demand, local airlines have raised fares beyond the N50, 000 average threshold. They sold the economy-class one-way ticket at between N70, 000 and N90, 000 per seat. Business Class tickets sold for an average of N150, 000 to N180, 000, depending on carrier and destination of choice.

Curiously, the online platforms of all the domestic carriers remained busy as of press time, yesterday, selling tickets on all routes with tomorrow morning flights all nearly fully booked.

The Federal Competition and Consumer Protection Commission (FCCPC), however, expressed concerns over rising consumer feedback that airlines have continued to sell tickets beyond the date announced for the proposed service shutdown.

The Chief Executive Officer of the commission, the statutory body saddled with protection of consumer rights, Babatunde Irukera, said to the extent that the complaints were accurate, and the airlines had decided and were resolute, “it will be egregious exploitation of consumers and a violation of the law to sell a service that the service provider knows that it will not, or does not intend to provide, or deliver.”

Irukera, in a statement, noted that the commission did not trivialise the disruption and potential challenge to business continuity and survivability an inordinately high cost of jet fuel presents to domestic aviation.

The commission has been in discussion with the leadership of major fuel marketers to understand the global supply challenges and possible steps to ameliorate the same while advocating continuous engagement among all stakeholders across the value chain.

In the interim, however, “it is misleading (on the part of the operators) and deceptive under Section123 of the FCCPA to represent that a service will be delivered on a certain date when the provider knows the same is false or improbable.

“The commission is optimistic that airline operators will not deliberately sell tickets for flights they do not intend to operate, and is as such hopeful that a solution short of a shutdown will emerge accordingly,” Irukera said.

He added that the commission would continue to monitor the “sensitive and evolving situation” though remains committed to supporting engagements to provide solutions and stability.

Efforts to get a reaction from the AON on the conflicting signals proved abortive, as the leadership insisted that their warning on imminent shutdown subsists.

The Chief Operating Officer of one of the airlines, however, intoned that the essence of the “drastic decision to shut down” was to jolt the government’s attention to do the needful and save the airlines from impending collapse.

He said: “It is really not in anyone’s interest to slow or completely shut down operations. I’m not preparing for it because the implication will be weightier. That said, it is also regrettable that the fuel that sold for N190/litre exactly 14 months ago has increased more than 300 per cent. I don’t know any aviation sector in the world that experiences such a level of instability. That is the reason all operators are worried.

“Aviation fuel alone used to take about 30 per cent of the entire revenue. Now, it is more than 80 per cent. And you think the government should not intervene? For every ticket we sell, you have five per cent in Ticket Sales Charge (TSC) going directly to the Nigerian Civil Aviation Authority (NCAA). From the ticket, you also pay the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) and other charges. We have the high cost of maintenance and insurance to defray if we manage to get foreign exchange. So, what remains? Our backs are against the wall. We are completely helpless, that is the state of affairs,” he said.

But in another twist, one of the signatories to the shutdown memo, Ibom Air, yesterday retracted plans to abort operations tomorrow.

In a statement signed by its management, Ibom Air disagreed with the decision of AON to suspend flight operations.

“Ibom Air cannot in the circumstance volunteer to stop operating and will continue normal operations on Monday May 9, 2022, and beyond. Ibom Air’s inclusion as ‘signatory’ to the statement released by AON must have derived from its active and committed membership of the AON,” the statement read in part.

The state-owned airline acknowledged the existential threat that the runaway fuel price increase poses for the air transport industry in the country, and agreed that the out-of-control situation was unsustainable.

“However, every airline has its unique business model and pressures. We believe that in spite of the escalating fuel prices, airlines volunteering to stop operations would rather exacerbate an already bad situation. Ibom Air has financial obligations to suppliers, financiers, and staff, which depend on the uninterrupted flow of revenue to service.

“More importantly is the fact that having been paid by customers in advance for flight bookings we are bound by contract to deliver the services already paid for, to avoid exposing the airline to the risk of avoidable litigation.

“Apart from the above factors, Ibom Air is currently the only airline serving Akwa Ibom State directly and as such, any voluntary stoppage of operations would completely cut off access by air into and out of the state. Such action would be directly in conflict with and detrimental to the interest of our shareholders,” the management stated.

The Chairman of the Airlines and Passengers Joint Committee (APJC) of the International Air Transport Association (IATA), Bankole Bernard, told The Guardian that while the concerns of the airlines are valid, “there are better ways of addressing grievances than resort to arm-twisting.”

Bernard said aviation fuel is expensive globally, yet that of Nigeria is still fairly competitive, which explains why foreign airlines have continued to fuel in Nigeria more than elsewhere.

He was, however, worried by the local airlines’ threat to shut down all operations. Bernard said: “Let them not forget that this is an industry that is highly regulated and operators cannot behave anyhow they like. Yes they have complaints, but have they engaged the NCAA or the Ministry of Aviation at a roundtable to make certain demands before threatening us with the shutting down option?

“They have not and that is where they are getting it wrong. We need to do things civilly so we can get good results and have a win-win for all. Let the airlines stop issuing us threats,” Bernard said.

Apparently forgotten in the commotion is a similar threat by the aviation workers’ union that yesterday said that there was no going back on the two-day warning strike in protest against workers’ negotiated conditions of service, and other welfare issues that have been pending for about nine years.

The coalition of unions, which has the National Union of Air Transport Employees (NUATE), the Association of Nigeria Aviation Professionals (ANAP), and the Amalgamated Union of Public Corporation Civil Service Technical and Recreational Services Employees (AUPCTRE) have all ordered their members in the critical services of the Nigerian Airspace Management Agency (NAMA), Nigerian Meteorological Agency (NiMet), the Nigerian Civil Aviation Authority (NCAA), and the Nigerian College of Aviation Technology (NCAT) to ground all activities for the period.

Technically, this will affect air traffic controllers, safety inspectors, and other key safety personnel within the industry.

General Secretary of NUATE, Ocheme Aba, said the industrial action was the last resort following failed attempts to negotiate new Conditions of Service (CoS) for NAMA, NCAA, NiMeT, and NCAT. The CoS has remained stalled with the National Salaries Income and Wages Commission (NSIWC), while the Minimum Wage Consequential Adjustment remains unimplemented since 2019.

Aba said: “Consequently, our unions have no alternative than to embark on an industrial action to press home our demand for justice and equity, especially considering the long-suffering, patience, and forbearance on the part of our members that has now reached yield point.

“Accordingly, all workers in NAMA, NCAA, NiMeT, and NCAT are hereby directed to embark on a two-day warning strike on May 9 and 10, 2022. Should the warning go unheeded, an indefinite strike shall be called soon after,” Aba said on behalf of the coalition.

Meanwhile, the National Assembly (NASS) and the Ministry of Aviation have appealed to the operators to put the action on hold for further dialogue on the thorny issue of aviation fuel.

The Chairman, House of Representatives Committee on Aviation, Nnolim Nnaji, regretted that despite the last intervention by the leadership of the House, the problem remained unabated.

Nonetheless, the Reps’ leadership has summoned a meeting of stakeholders tomorrow to retool the solution strategy.

Nnaji commended operators for patriotism, though urged them not to ground operations, which would be most devastating for the beleaguered economy.

He said: “The National Assembly is determined to ensure that the aviation fuel crisis is urgently resolved because air transportation has become the safest mode of travel. It is equally the catalyst of economic development so we cannot afford to entertain any disruptions in the sector, especially now that the election process is ongoing.”

The Special Assistant to the Minister of Aviation, James Odaudu, yesterday expressed concern about the difficulties being faced by the airline operators in procuring aviation fuel to warrant the proposed operational blackout.

“Unfortunately the issue of fuel supply is not within the purview of the ministry and so the most it can do in the present situation is to engage with agencies, institutions, and individuals in positions to provide succour to the airlines. This is already being done by the relevant team led by the Honourable Minister.

“While the efforts to assuage the situation are on, we wish to appeal to the airline operators, even in the difficult situation, to consider the multiplier effect of shutting down operations, on Nigerians and global travellers, in taking their business-informed decisions and actions,” Odaudu said.