Nigeria - Aviation Industry Records 18 Failed Airlines - Report

They came with great potentials and offered jobs to both Nigerians and foreigners. Less than a decade after, they have lost steam and can fly no more.

Gone with them are the relief and the revenue they brought to air travelers and the Federal Government. This is the fate and story of most Nigerian airlines in the last five decades.

The worry over Nigeria’s aviation sector is not only local but international as financial institution and international lenders now view the nation’s aviation industry with caution.

Indeed, since the final demise of Nigeria Airways, following a prolonged coma, Nigeria has not had a nationa carrier.

Besides Aero Contractors, which started operations in 1959 and worked closely with the Nigerian oil and gas industry before venturing into scheduled domestic operations in 2002, IRS and Overland, which are over 10 years old and still in business, others have gone under or, at least, suspended operations. Indeed, Arik Air, though relatively new, and its own challenges notwithstanding,  ranks as the biggest airline in the country today. The Associated Airlines has also been in operation for 25 years despite the turbulence in the industry.

Among the airlines, which have been swept away, either permanently or temporarily from the nation’s aviation sector, are Chanchangi, Bellview, ADC, EAS, Slok, Savanna, Triax, Air Mid West, Sosoliso, Oriental, Dasab, Albarka, Fresh Air, Sosoliso Airlines, Okada, Space World, Harka and Harco. The latest is Air Nigeria, as its chairman, Mr. Jimoh Ibrahim, last week opted to suspend its operations.

Ibrahim had, in a statement, said it was “difficult to continue further investment in the carrier with the high level of members of staff disloyalty and weak business environment.”

He explained that the suspension of all the operations of Air Nigeria was not unusual.

“Corporations are like individuals, who naturally will get sick, and the usual thing to do is to admit them to hospitals, either for corporate surgery or for treatment, as the case may be.”

Air Nigeria (formerly Virgin Nigeria), was established in 2004 when the Federal Government and Virgin Atlantic Airways signed a Memorandum of Mutual Understanding on its take off. The airline, then trading as Virgin Nigeria Airways, started operation on June 28, 2005 with flights to London.

Okada Air  was founded in 1983 and ceased operations in 1995 based on lack of finance.

EAS Airlines was owned by Captain Idris Wada, the incumbent Governor of Kogi State. The carrier was established on December 23, 1983. It began operations as EAS Cargo Airlines, but stopped cargo flights in January 1992 and set up an executive jet charter service under the name Executive Airline Services (EAS) in November 1993.

On May 4,2002, EAS Flight 4226, a BAC One-Eleven 500 twin-engine jet crashed into houses upon take-off from Mallam Aminu Kano International Airport, killing 75 passengers and crew members on board as well almost 70 persons on the ground.

The airline was eventually sold to Chairman of Global Fleet, Mr. Jimoh Ibrahim, who changed its name to NICON Airways, which operated for a few weeks before its demise.

For Chanchangi Airlines, once regarded as the biggest carrier with over 60 per cent of the traffic, it was established on May 2, 1997 by Alhaji Ahmadu Chanchangi and started flight operations to and from Kaduna, Lagos, Owerri, Abuja and Port Harcourt on  May 2, 1997. Services were operated using Boeing 727-200 aircraft, three Boeing 737-200 aircraft and two Boeing 737-300.

By 2006, signs that all was not well with the airline became obvious as the carrier’s fleet reduced from 12 aircraft to five, and later to two.

In 2010, the airline’s fleet dropped to one as it was hit by financial crisis and alleged poor management.

Aviation Development Company Plc (ADC) started with a promise. It opened in December 1984. In 1990 the company set up ADC Airlines, which became operational on January 1, 1991. In 1994, it was listed on the Nigerian Stock Exchange (NSE).

Originally, it offered domestic services to Calabar, Port Harcourt, Lagos, Abuja and Kaduna and regional services to Monrovia in Liberia, Freetown in Sierra Leone, Conakry in Guinea, Banjul in Gambia and Accra in Ghana.[

In 2000, the management decided to temporarily suspend ADC Airlines operations in order to re-capitalise. In February 2002, a Boeing 737-200 was acquired and operations restarted to Calabar. Three further Boeing 737s were acquired by the airline was owned by the Aviation Development Company (ADC). [

The affected airlines would only fly when they satisfied the Nigerian Civil Aviation Authority (NCAA)’s criteria in terms of re-capitalization and thus be re-registered for operation.

In 1992, Bellview Airlines emerged out of Bellview Travels Limited, a Lagos-based travel agency, concentrating on offering executive charter services on a single Yakovlev Yak-40 aircraft.

In 1993, it started scheduled domestic passenger services with a leased Douglas DC-9-30. To expand its operations, a subsidiary in Sierra Leone was founded in 1995, which later merged with the parent. In October 2009 Bellview Airlines stopped operations following the suspension of its London Heathrow services.

Their failure has brought pains to their owners, workers, who have lost their means of livelihood and other stakeholders, including the government, in terms of revenue loss.

Stakeholders in the industry, who spoke with reporters on the development, attributed most of the problems faced by the airlines to managerial incompetence and policy inconsistency.

According to an expert, who preferred anonymity, “many of the airlines were used as fronts. The administrators of these airlines are found wanting with the exception of a few in applying that cutting edge knowledge that would help to nurture the airlines.”

The source further explained that many of them lack knowledge in strategic management, contract negotiation, aircraft and engine lease rentals, right routes, right aircraft type and right staff skill.

The Assistant Secretary-General of Airline Operators of Nigeria (AON), Mohammed Tukur, said till date, aircraft importation has remained a “sea” for airlines to cross, adding that it takes practically every bit of fund available to import aircraft due to high tax.

Tukur berated airline owners for diverting funds meant for the smooth running of their businesses into what he described as frivolities.

“If you operate an airline and make money but have nothing to show for it, then, there is a problem. Most times, they (owners) take money from the airlines and divert into no-profit-making ventures. They come into the sector, owe the Nigerian Airspace Management Agency (NAMA), the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Civil Aviation Authority (NCAA) heavily and disappear into thin air.”

The President, Sabre Networks and former Executive Director, Bellview Airlines, Gbenga Olowo, said the government should be asking the question on why “all our airlines are dying,” adding that there could be political undertone to why all the airlines have gone into oblivion.

“If Okada airline died, if Kabo died and EAS died, if Bellview of so many years could die, what is the government doing? Is it that all the investors are crazy? Is it because they are Nigerians? We should be asking the question as a mother: Why are my children dying?”

Olowo said for sanity to prevail in the aviation industry, the government must be ready to force all local airlines to consolidate into four formidable airlines to favourably compete with foreign airlines.

Painting a grim picture of the situation in which the operators have found themselves, the President, Nigerian Aviation Safety Initiative (NASI), Captain Dung Pam, said if something urgent was not done, Nigeria would not have any indigenous airline whether as a regional or domestic carrier in the next five years.

“All the ones that we have now will go but you know what, they will be replaced and the replacement may not even be African carriers. I don’t know how many Nigerians are following what is happening now. As you know, Stelios Haji-Ioannou, the former Chairman of Easy Jet and Robica Group, is planning to invest about $500 million in low-cost carrier based in Accra, Ghana,” he said.

Pam fears that when that happens, all the traffic emanating from e Nigeria would be shifted to Ghana.

“As you know, Nigeria at the moment has 18 per cent of the population of Africa. We are 47 per cent of the population of the whole of West Africa nd we provide 65 per cent of all the air traffic in West Africa. None of our airlines has proved to be making profit. My final advice to the aviation industry in Nigeria, to the operators, is either to consolidate or be ready to die.”

For Bellview, Sosoliso and ADC airlines, their involvement in devastating crashes in 2005 and 2006, where 300 passengers died, signalled their collapse. While Bellview was able to settle all insurance claims as stipulated by the International Civil Aviation Organisation (ICAO), others failed to comply with regulations and have since 2006 been unable to resume operations.

In the event of a crash, airlines find it extremely difficult to convince passengers of their safety. This, however, adversely affects patronage, a situation that puts the affected airlines in serious financial straits thus forcing them to close shop.

Sosoliso was less than six years old when the accident occurred in 2005 in Port Harcourt, Rivers State, killing school children and others onboard.

Slok, owned by a former Governor of Abia State, Orji Uzor Kalu, only flew for a few months before its operating licence was withdrawn for allegedly violating safety rule. The carrier however attributed its problem to the face-off between its promoter and former President Olusegun Obasanjo during the run-up to the 2007 elections.

For others like Chanchangi, Albarka and Savannah, government’s policies in the aviation industry are believed to have caused them incalculable damage. Albarka even went to the Stock Exchange Market and was listed before its demise.

Albarka and Savannah had BAC 1-11, B737-200 dominating their fleet, but the crash of EAS plane in Gwamaja near Kano in 2002, killing then Sports Minister, Ishaya Mark Aku and all other passengers, forced the government to bar the aircraft type. This policy also affected Chanchangi Airlines, which was left with only three airplanes after the policy grounded the other aircraft.