Why Private Jets Cannot Resist Charter Service
For the umpteenth time, the Nigeria Civil Aviation Authority has made strong effort to discourage the use of private registered aircraft for commercial charter. Chinedu Eze identifies reasons why private aircraft owners cannot resist commercial charter service
Many times in the past, the Nigeria Civil Aviation Authority (NCAA) made efforts to stop the use of aircraft registered as privately owned for hire and reward, but the agency had failed.
Industry stakeholders are of the view that NCAA and the Minister of Aviation and Aerospace Development, Festus Keyamo may be serious this time.
On Tuesday, NCAA suspended three private jets engaged in commercial activities against the stipulations of their operating permit. At the same time, the minister ordered re-evaluation of Permit for Non Commercial Flights (PNCF) to stop the abuse of such approvals.
NCAA said in March 2024, it issued a stern warning to holders of the permit for non commercial flights (PNCF) against engaging in the carriage of passenger, cargo or mail for hire and reward.
“The Authority had also deployed its officials to monitor activities of private jets at terminals across the airports in Nigeria. As a consequence of this heightened surveillance, no fewer than three private operators have been found to be involved in violation of the annexure provision of their PNCF and Part 9114 of the Nigeria Civil Aviation Regulations 2023.
“In line with our zero tolerance for violation of regulations, the Authority has suspended the PNCF of these operators. To further sanitise the general aviation sector, I have directed that a re-evaluation of all holders of PNCF be carried out on or before the 19th of April 2024 to ascertain compliance with regulatory requirements. All PNCF holder will be required to submit relevant documents to the authority within the next 72 hours,” acting Director General of NCAA, Captain Chris Najomo said.
The regulator stressed that this riot act is also directed at existing Air Operator Certificate (AOC) holders, who utilise aircraft listed on their PNCF for commercial charter operations.
“It must be emphasised that only aircraft listed in the Operation Specifications of the AOC are authorized to be used in the provision of such charter services. Any of those AOC holders who wish to use the aircraft for charter operations must apply to the NCAA to delist the affected aircraft from the PNCF and include it into the AOC operations specification.
“NCAA wishes to reiterate to the travelling public not to patronize any airline charter operator who does not hold a valid Air Operators Certificate issued by the NCAA, when they wish to procure charter operations services”, the authority said in a statement.
Irresistible Charter Service
Many Nigerians who own private jets cannot resist them for charter service because of the money they generate, which they use to pay the crew, maintain the aircraft, pay for their insurance and also fuel them. These demands are money guzzlers. It costs so much to maintain cockpit and cabin crew, ferry aircraft overseas for major maintenance and pay insurance and other charges for the aircraft. So, when there are offers for charter service, some aircraft owners take the opportunity to earn revenue from the aircraft.
Although what they do is illegal, in the past, NCAA had not taken stopping them seriously as the current management and the Minister have done. Many of those aircraft owners are highly influential and can disobey those directive; unless practically enforced, as Najomo has done.
Another fact is that there are demands for charter service. In some period of the year during electioneering campaigns and during festive seasons; there are always high demand for charter, which aircraft duly registered cannot meet. So, aircraft with PNCF literally sneak into the market and operate for hire and reward.
Elated by the action of NCAA, the Chairman of West Link Airlines Limited, Captain Ibrahim Mshelia, commended the Minister of Aviation and NCAA, especially the acting Director General for having the courage to stop PNCF registered aircraft from operating charter service.
“Well done the Minister. Well done DGCA. You have done what others failed to do. I love that patriotic courage. We as citizens support you 120 per cent and will stand with you. I am happy to be quoted anywhere that Hon. Min. Keyamo has done what others deliberately or nonchalantly failed to do for this country and the industry at large. DGCA Najomo, thank you for sealing it. Well done and kudos,” Mshelia, said.
Major Incidents
What may have stirred the determination of the Minister of Aviation and the management of NCAA, were the series of major incidents that happened since last year involving aircraft on PNCF registration. In November last year, a private jet, HS25B with core sign, 5NAMM operated by Flint Aero overshot the runway at Ibadan Airport, but nobody on board or on the ground was injured. The aircraft was on PNCF when the incident happened. The incident prompted NCAA to issue a warning, directing aircraft on PNCF registration to stop operating charter.
Similar incident happened in January this year also involving a private jet with call sign N580KR, which suffered runway escussion on landing at the Chief Ladoke Akintola Airport, Ibadan. The aircraft was ferrying 12 passengers and three crew members. No casualty was reported. NCAA reiterated its warning; that aircraft registered as privately owned should stop operating charter service.
Before now some officials of NCAA would say that it was difficult to stop such illicit charter service because the owner of the aircraft could claim that the passengers in his aircraft are relations and friend and that the operation is not for hire and reward.
Revenues
Some time ago THISDAY carried out a survey on the cost of charter service in Nigeria. The cost of charter service ranged from $4,500 to $7000 per hour. This means that each aircraft makes an average of 90 operations in a month at an estimated cost of $6000 per trip.
King Air 350i: $4,500 per hour; Hawker 800XP: $5,500 per hour; Challenger 604: $6,500 per hour; Gulfstream GIV: $7,000 per hour.
These prices may have changed significantly from when the survey was carried out. Nigerian economy has tanked, but hope in the horizon is rising.There is the high cost of aviation fuel, the high insurance premium and the dwindling number of aircraft for charter.
Maintenance Cost
The price for a brand-new private jet ranges from $3 million to $90 million or more. Though secondhand jets are cheaper, they still cost millions of dollars.
Few years ago, the most expensive private jet on the market was the Gulfstream G-650, which had a base price of $70 million. With extras and customisation, the price could soar to hundreds of millions of dollars. But these days new jets are emerging with earth-shaking prices.
The purchase price of a private jet represents only a fraction of the cost of owning one. Maintenance and repair costs depend on the size of the aircraft but typically range from $700,000 to $4 million per year.
Fuel is one of the highest costs for jet owners. Planes with larger fuel tanks for long-range flights require more fuel. For example, the Bombardier Global 8000 has a fuel capacity of nearly 50,000 pounds. The average expense to fill up the tank is $53,000.
NCAA’s Insistence
NCAA in the circular it issued last Tuesday insisted that only aircraft listed in the Operation Specifications of the AOC are authorized to be used in the provision of such charter services.
Commercial charter services, which is for hire and for reward has strict oversight by the regulatory authority and insurance premium is higher and the operators pay 5 per cent VAT to government, but private jet owners are not subjected to such rigour because they do not provide service to others beyond their family, friends and associates.
So NCAA penalises private aircraft owners when they airlift passengers for reward but as stated earlier, the major challenge the agency faces is to discern which operation is for hire and for reward, as the pilot at start up will always tell the air traffic control that the persons in the flight are the owners and their relations.
So acquiring the aircraft is one thing but managing it is another. Without engaging in charter services, it would be difficult for many aircraft owners to keep it in the air because the aircraft has to be maintained, the insurance must be paid and the crew salary must be paid.
Disappointed by the activities of private jet owners who operate charter services with their aircraft, the CEO of Aero Contractors, Captain Ado Sanusi, once told THISDAY that he frowned at the owners of privately registered aircraft, which are illegally used to operate charter services.
“In a local parlance, I will say that they are doing kabu-kabu and when they do this they deprive operators, who registered their aircraft as commercial charter equipment, business.
“They don’t pay taxes to government and the insurance they use does not cover charter operation, which means they are not liable if their passengers are involved in accident and their maintenance is not up to standard for commercial aircraft charter, but I wish to note that this did not start today; it has been there for a long time,” he said.
THISDAY also learnt that many Nigerian private jet owners register overseas in order to hide their identity, to pay less insurance premium (they will pay more in Nigeria if the aircraft has Nigerian registry because Nigeria is described by insurance brokers as very harsh environment), adding to that is the fact that wherever the aircraft is registered the aircraft would be under the oversight of that country’s civil aviation authority.
“The question of registration is very clear. You can register anywhere but you need to pay fees in the country where you operate and you must abide by the regulation of where you operate while you will be under the supervision of the country you registered the aircraft,” NCAA source told THISDAY.
With the bold step taken by NCAA to stop private jets from commercial charter service, many in the industry are hoping that the agency would sustain its tough stance because this will enhance those who registered for charter service to have jobs, pay their taxes and also compete effectively.
