.UNA upbeat on new capacity, regional operations

A local carrier, United Nigeria Airlines (UNA), has blamed the reign of wet-lease aeroplanes in domestic operations on growing discrimination and categorisation of Nigeria as a high-risk environment.

The Chief Operating Officer of UNA, Osita Okonkwo, at the third anniversary of the airline, said the discrimination, which exposes local operators to wet-lease aircraft, and not its dry-lease variants, is not unconnected with breaches and sins of the past.

Okonkwo, who was responding to questions on why local aviation is having more aircraft operated by foreign crew and not Nigerians, said the development is circumstantial, due to abuses of the past, and not in the interest of the current local operators.

Recall that in a dry-lease arrangement in aviation, the leasing firm provides the aircraft to the lessee (operator) without a crew, unlike the wet-lease that comes with the crew and the lessor has firm control of the asset.

The main distinguishing factor between wet-lease and dry-lease arrangements is who has operational control. In a wet-lease situation, the lessor maintains operational control of all flights whilst providing aircraft and crew, whereas with dry-lease the lessee provides its crew and exercises control.

Dry lease is very cost-effective for airlines and the host economy and is the most popular globally. However, the arrangement has been abused by some operators in the past, leading to litigations and hurdles for the lessors to recover leased equipment from Nigeria.

Okonkwo noted that the awful experience of leasing companies forced the global network of leasing firms to blacklist Nigeria from dry-lease benefits, and much to the pains of the current operators that deserve a chance to set the records straight.

While he acknowledged that the Ministry of Aviation and Aerospace has begun efforts to engage the global aviation community on better deals in aircraft leasing arrangements and for the growth of the air transport sector, he said there is more to be done in the insurance segment of the aviation sector.

He said: “Our appeal is that we don’t miss out on opportunities. Nigeria is the largest market in Africa, and the potential is there. Unfortunately, we have a wet-lease market here because we have been locked out of the dry-lease because of sins of the past.

“We are happy that the minister is doing a lot in this regard. A group has been formed to globally unblock Nigeria from the dry-lease market. It would help that Nigeria is removed from the high-risk countries. The country’s risk rating has hampered our operations,” he said.

Besides, he rued the inability of local insurance companies to insure big aircraft in Nigeria, adding that the lack of insurance capacity has made it more difficult for lessors to operate in the country.

According to him, even if an airline purchases an aircraft, it is an international requirement that it has to be insured, but no insurance company can do that in Nigeria, especially for bigger aircraft.

“So, many lessors are not operating in Nigeria because of insurance. That is killing the aviation business because even though you want to do indigenisation, you cannot do that with another person’s assets.

“Even if you buy an aircraft today, it is a requirement that you must insure it even if you pay with your money in Boeing, Embraer or wherever. The insurance must cover Boeing even though they have sold it to you. They must be party insured in that transaction. So, you can’t escape the international requirements of the business and limiting it locally will not help lessors,” he said.

The multiple challenges notwithstanding, the airline has commemorated its third anniversary with optimism of more efficient services and better years ahead.

Okonkwo said the UNA remains committed to its pan-Nigerian ideals, coupled with regional and international expansion.

The airline has placed orders for new aircraft, which are expected to arrive quarterly.