Creditors withdraw Air Nigeria planes •Airline to lay off 85% workforce

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Problems are pouring in torrents for embattled Air Nigeria owned by Nigerian multi-millionaire, Jimoh Ibrahim, as lessors have repossessed four Boeing 737-300 aircraft in its fleet over non-payment of accumulated monthly rentals.

One of the airline’s lessors, General Electric Commercial Aviation Services (GECAS), has reviewed the financial exposure of the airline and has terminated the leasing agreements for the four Boeing 737 aircraft it leased to the beleaguered airline. The four aircraft are registered as: 5N- VNC, 5N -VND, 5N- VNE and 5N- VNJ.


Consequent upon the tough challenges facing the airline, Ibrahim is said to be contemplating the sack of about 85 per cent of the airline’s workforce. Sources said he has directed the various heads of department to compile a list to that ratio from each department.

The sack of workers is being considered as an option to the outright closure of the company. Daily Independent gathered that the management had advised those who wish to leave to do so. Sources said the lessors have been having running battles with the airline following its ‘chronic attitude’ of defaulting in payment.

It was further gathered that GECAS had earlier written to the Managing Director of the airline, Kinfe Kahssaye, of its readiness to terminate and repossess its four aircraft.

The controversial airline had been having running battles with its staff, the National Association of Aircraft Pilots and Engineers (NAAPE) and the Nigerian Civil Aviation Authority (NCAA), which finally grounded its operations two weeks ago on alleged ground of insolvency.

The NCAA in its letter grounding the airline said it was “expedient that immediate action be taken in the interest of safety. These issues are well known to you as they bother on technical and financial audits.”

The regulatory body stated that the surveillance report on the airline on June 22, 2012 showed that out of the 11 registered aircraft in Nigeria, only two were operational.

The two were 5N- VNF and 5N- VNM, while others were Aircraft on Ground (AOG) in Lagos and in Maintenance, Repair and Overhaul (MRO) facilities in Europe and the U.S.

Daily Independent investigation revealed that NCAA had an emergency meeting with Air Nigeria on June 11, 2012 to discuss moves by two of its lessors – GECAS and Shannon Engine Support – to repossess their four B737-300 aircraft and four CFM56-3C1 engines respectively. Barely a week after its operations were grounded by the NCAA, the airline had terminated the appointments of many of its pilots and engineers.

Daily Independent had reported last week that about 12 pilots and engineers who belonged to the National Association of Aircraft Pilots and Engineers (NAAPE) were sacked on June 25.

NAAPE President, Isaac Balami, who confirmed the sack, said the airline may have drawn the battle line with the association.Sources said decision to sack the pilots and engineers may not be unconnected with the recent strike embarked upon by them.They had alleged that the management not only delayed their salaries, it has not been remitting the pensions deducted from their salaries for seven months.

Nigeria is a signatory to the Cape Town Convention which makes a lessor able to recover its aircraft without let or hindrance if it believes an airline is continually incapable of payments. The lease rentals for the Boeing 737-300 is $181,000 for an aircraft.The airline, then known as Virgin Nigeria, had negotiated down ward the lease rental of each B737-300 to $120,000. It then had five B737-300 and two E-190.

The airline is still operating to London. Analyst said this is in view of the fact that the wide body Airbus A330 being used is on an ACMI (Aircraft, Crew, Maintenance and Insurance) bases from Egypt Air. In aviation parlance, an ACMI indicates that the lessor provides the aircraft, crew, maintenance and insurance cover for an aircraft.

AERCAP holdings, a major European aircraft lessor, in its June 2012 availability for an Airbus A330, said the aircraft is leased for $387,500 per month excluding maintenance reserves. An official reaction from the beleaguered airline which came later on Wednesday night confirmed report that the aircraft have indeed been withdrawn by its creditors.

A statement by its Media Relations Manager, Samuel Ogbogoro, said: “Subsequent to the temporary suspension of Air Nigeria’s regional and domestic flight operations by the Nigerian Civil Aviation Authority (NCAA), our lessors have been requesting to repossess some of the aircraft in our fleet and we are fully cooperating to return their aircraft.

“GECAS, one of our lessors, is already in the process of calling back four of their Boeing 737-300 aircraft and Air Nigeria is fully cooperating in line with the Cape Town Convention to expedite the repossession process.

“Air Nigeria plans to acquire state-of-the-art aircraft to fill the reduction in capacity and is currently finalising plans to resume normal flight operations across the regional and domestic routes as soon as possible.”

Source (Daily Independent)

 

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