Charter airlines operating in Nigeria have been losing at least half a billion naira monthly since President Muhammadu Buhari came to power and started his anti-corruption crusade, findings by Saturday PUNCH have shown.
In the last four months, investigation reveal that 10 charter airlines have lost a combined revenue of $10.395m (N2.048bn).
Subsequently, some of the charter airlines, which used to enjoy the robust patronage of serving and non-serving top government officials, cronies and contractors, are now at the verge of closing shops following a sharp drop in business turnovers.
Sources in the charter airline sub-sector of the country’s aviation industry disclosed to our correspondent under the condition of anonymity that Buhari’s anti-corruption campaign had made most of their clients to boycott flying charter jets.
It was further learnt that serving governors, politicians, immediate past ministers, ex-presidential advisers, top government contractors including subsidy scheme beneficiaries and top civil servants, who used to charter airlines, had all stopped flying private jets.
Findings also revealed that associates of these serving and non-serving government officials, and their associates and family members, both close and distant, had also stopped renting private jets, a usual practice in the past.
A director in one of the aviation agencies who is close to charter jet operators at the Lagos airport, said, “Immediately Buhari took over, charter jet business started witnessing a gradual decline. But it became very worse when Buhari started the anti-corruption crusade.
“The fear of probe by the new government made most of our clients to run away. You know most of our clients are serving and non-serving top government officials, top government contractors and subsidy scheme beneficiaries.”
The CEO of one of the top local charter companies, who spoke under the condition of anonymity, also confirmed the development.
He said most operators were already returning some of the planes they leased from foreign leasing companies following the development.
He said, “The charter businesses have all been affected so badly, I used to do an average of 50 hours in a month. And this is the average for most of us the main operators. Now, I hardly do 10 hours in a month, it’s that bad.”
“I do about 60 hours per month at my peak, and about 43 hours per month at periods before the emergence of the new administration,” he added.
According to him, the condition has made some operators to return planes leased from foreign leasing companies in South Africa and United States back to them.
“Many of us (charter airlines) could not afford lease rentals (fees operators pay on planes to their owners) anymore because businesses are down, I mean virtually down completely.
“The law allows us to lease aircraft that because Nigeria has domesticated the Cape Town Convention. That was even the reason they released the planes to Nigerian operators in the first place.”
Following the downturn in business, he said each operator had returned between one and four aircraft to their owners overseas depending on the number of planes they leased from them.
Findings by our correspondent show that there are about 10 licensed charter airlines operators in Nigeria.
These are Austria-based Vistajets, United Kingdom-based Hanger 8 Aviation, Top Brass Aviation, Skyjet Airlines, Jed Air, Overland Airways, SkyPower Express, Arik Air, King Air and Associated Airlines.
However, there are still a number of charter flights operated by some helicopter companies which also have one or two private jets for charter in their fleet.
Also, there are still a number of companies which do charter under the licences of some of the licensed charter operators.
Further findings from government agencies and chief executive officers of some charter airlines showed that each of the main operators made an average of 50 hours per month before Buhari took over and began the anti-corruption crusade.
Specifically, charter airline operations ranged from 35 to 65 hours per month before the advent of the Buhari administration. This may come from an average of about three or four flights per week with each flight lasting for about two to three hours on the average.
According to the CEOs, the charter airlines charge between $5,000 and $8,000 per hour for the flights or services.
However, businesses have become so bad that most operators do between five hours and 20 hours a month, according to some CEOs who spoke to our correspondent under the condition of anonymity.
Using an average fee of $6,500 per hour and an average of 50 hours per month for each operator, It means that the 10 licensed charter airlines were generating a revenue of $3.25m (N640.25m) every month before the emergence of Buhari.
However, with the downturn in business, it means using an average of 10 hours per month for each operator, the 10 licensed operators are now making approximately $650,000 (N128.05m) every month.
This means that the charter airlines are losing about $2.6m (N512m) in revenue every month with the sharp decline in their business.
This means that between May and September, charter airlines have lost about $10.4m (N2.048bn) in revenue.
The development has made some charter airlines to begin sacking some of their employees.
It was authoritatively gathered that Vistajets had sacked some of its employees in the aftermath of the sharp drop in its business.
Early last year, it was reported that the immediate past Minister of Petroleum, Mrs. Alison Madueke, allegedly flew Vistajets for several months and accumulated huge sums of bills that could almost reach half of the amount a private jet is sold.
Vistajets, which parades some of the best upscale and almost brand new Bombardier jets in its fleets, enjoys perhaps the best patronage prior to the downturn in the charter business market.
The Austria-based charter airlines, which used to have about five private jets deployed in Nigeria during the peak of business, had reduced it to just two with only one being in active service, according to a government official close to the company.
The official said a number of workers were laid off after the company redeployed some of its aircraft to other African countries.
The Vistajets’ representative in Nigeria, Mr. Kola Aluko, could not be reached for comments. Calls and text messages sent to his telephone line did not go through.
The CEO of Skypower Express, one of the charter airlines, Capt. Joji Muhammed, said the downturn in the charter business market could be linked to several factors including the downturn in the economy and the fact that elections were over.
Joji, who confirmed that some operators had returned their aircraft overseas, said when planes were no more in use due to low business, it was normal that they would be taken away.
An aviation industry analyst and Chief Executive Officer, Group Captain John Ojikutu (retd), said Buhari needed to investigate those who had used government funds and corrupt money to fly or buy private jets.
He said it was obvious that most of the people who used to fly private jets got the money through corrupt means.
“All the government contractors, ex-government officials must all be investigated; they have stopped because a new government that is interested in seeing how people spend money is in power.”
Industry watcher and CEO, Finum Aviation, an aviation consultancy firm, Mr. Sheri Kyari, said, “People who used to display wealth are no more doing so because they don’t know what will happen next. This is why the charter business market is down. Except there is an economic boom, the charter market may not recover too soon.”
Saturday PUNCH also learnt that some top government officials and beneficiaries of oil subsidy scheme who bought private jets were selling them for fear of being probed.
Some who did not sell them were said to be hiding them in foreign countries. It was gathered that those who leased private jets directly from foreign companies for their private flying had returned them.
An aviation industry analyst and member of the Aviation Round Table, an industry pressure group, Mr. Olumide Ohunayo, said the growth and boom the charter airline sub-sector experienced before the emergence of Buhari was funded by stolen and excess government funds.
He said, “Things have not been done properly in the charter airline sector. For instance, a lot of the operators are not paying taxes. We have some people also offering illegal charter services. You saw how the NCAA recently impounded two foreign planes for doing illegal charter services in Nigeria. Now, a new sheriff is in town and the fear of the new sheriff has slowed down activities in that sector.
“We have come to the time when everybody has to account for their actions and inactions. Before now, you see ministers and top government officials flying private jets and forcing government agencies to foot the bill. That is no longer happening now because all the top civil servants are afraid of Buhari’s probe.”
Ohunayo further explained that. “We used to see a situation where some top government people, their family members or cronies will charter private jet to Dubai or South Africa on a Friday to relax and come back on a Monday. That can no longer happen again so the sector must experience the lull. People must account for things and the fear of probe is making many people to run away now even though they still have the money.”
Industry watcher and former Assistant General Secretary, Airlines Operators of Nigeria, Alhaji Tukur Muhammed, said many top Nigerians with links in government who used to fly private jets now fly business class in commercial planes. He noted that the development had made commercial airlines to be making good revenue in their premium classes.
Muhammed said, “People are being forced to change their lifestyles. Come and see the business class cabin of First Nation, Aero contractor and other airlines on the Lagos-Abuja route now, you see the big names that used to fly charter jets there. The fear of Buhari has made everyone to change their lifestyles. I think it is good for the country. However, people who stole money must account for it.
“For the charter airline market, we will start facing the reality now. Private jet is not for everyone. It is for those few who can afford it, and not those who stole government money.”
Buhari’s anti-corruption war: Business slows down for charter airlines
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