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IRS, Chanchangi airlines lose N110 million over suspension

Alhaji Ahmadu Chanchangi

Alhaji Ahmadu Chanchangi

The crises rocking the aviation industry turned ugly few days back with the grounding of two domestic airlines, IRS and Chanchangi airlines by Nigerian Civil Aviation Authority (NCAA). ENCOMIUM Weekly’s checks on Wednesday, October 30, 2013, revealed that the suspension has had adverse effect on the affected airlines and several passengers.

Information available to ENCOMIUM Weekly revealed that since they were grounded few days back, each of the airlines has lost over N56 million each. According to our source, they operate averagely three or four times daily and their major hub is Abuja/Lagos.

ENCOMIUM Weekly’s gathered that hundreds of air travellers were stranded at the Lagos airport following the grounding of Chanchangi and IRS airlines by the Nigerian Civil Aviation Authority for having only one operational aircraft each in their fleets.

With the earlier suspension of flight operations of two other domestic carriers, Dana Air and Associated Airlines, air travels to destinations within the country have become increasingly difficult, thereby leaving potential passengers at the mercy of the few available operators, who have capitalised on the situation to hike fares.

The situation resulted in a marginal increase in airfares in the country. For instance, Aero Contractors’ Lagos to Abuja flight, which costs between N18,000 and N22,000, attracted N28,000 while a flight ticket to Abuja from Lagos on Medview Airlines sold for between N25,500 and N30,000, depending on the time of flight, instead of the average of N18,000 previously, while Arik Air ticket on the same route sold for N38,000.

Less than three weeks after suspending the operations of Dana Air to pave the way for a safety audit of the carrier’s operations, the aviation industry regulator, the Nigerian Civil Aviation Authority, has grounded the operations of IRS Airlines and Chanchangi Airlines.

It was gathered that the suspension followed a memo signed by the Director-General of the NCAA, Captain Fola Akinkuotu, ordering all scheduled airline operators whose fleet size had been reduced to only one operational aircraft to immediately stop flight operations.

The memo, which was addressed to all scheduled airline operators and dated October 14, 2013, had reference number, NCAA/DG/GEN/Vol.II/2013/80.

The memo, a copy of which was obtained exclusively by our correspondent on Wednesday, read in part, “You will recall that recently, the NCAA, through the director-general, expressly suspended the continued operation of airlines possessing otherwise valid Air Operators Certificate, but who were operating with a single aircraft.

“The Nigerian Civil Aviation Authority regulations provide for more than a single aircraft for any operator to secure or operate under a valid AOC.

“This directive is, therefore, issued to formalise and clarify that prior order suspending such operations. As such, all AOC holders or operators whose operational fleet has been reduced to a single operational aircraft for whatever reason shall immediately and forthwith suspend their flight operations.

“Such operations may only resume upon clearance from the NCAA that there is more than one operational aircraft for continued flight operations and satisfaction that such AOC holder has the capacity to have safe flight operations prior to commencing any such operation.”

Following the directive, IRS and Chanchangi’s operations have been grounded by the regulatory authority.

The development has brought to four, the number of airlines whose operations have been suspended by the regulator in the last three weeks, following the Associated Airlines’ plane crash in Lagos on October 3, 2013.

Associated Airlines’ operation was suspended by the NCAA three days after the tragic crash involving its Embraer 120 plane near the Lagos airport, which led to the death of 15 people.

Two days later on October 6, the regulator suspended the operations of Dana Air nationwide.

In an exclusive chat with ENCOMIUM Weekly on Wednesday, October 30, 2013, the Public Relations Manager, Chanchangi, Mr. Oludele Balogun, said, “We can’t argue with the relevant authorities but I can tell you that we have more than one aircraft. The other one was taken out for c-checks. However, what we understand as one aircraft before means if you are entering the industry with just a plane for commercial purpose, you won’t be certified. But I wonder why this law now applies to us. We await their instruction as to when we can resume operations.”

The Managing Director, IRS, Mr. Yemi Dada, said, “The NCAA has the power to make rules and regulations for the sector. The rules state that you must have two aircraft when starting operations and not two at all times.

“But what we are really doing is to sit down with the NCAA and get the issue ironed out. The Airline Operators of Nigeria is trying to come up with a common position on the matter. Until then, we will comply with the directive.”

At the moment, only Arik Air, Aero Contactors, First Nation Airlines and Overland Airways are left to do scheduled domestic flights in the country.

IRS Airlines Limited is based in Abuja, Nigeria. It operates scheduled domestic passenger services. Its main base is Nnamdi Azikiwe International Airport, Abuja. The airline was established in 2002 and started operations in March 2002.Its operational base is in Lagos.

Chanchangi Airlines was established on January 5, 1994, by Alhaji 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, 3 Boeing 737-200 aircraft and 2 Boeing 737-300 aircraft were also acquired in 2009. Chanchangi Airlines won the Federal Airports Authority of Nigeria (FAAN) and the Corporate Merit Award for Best Domestic Airline of the Year for 1998, 1999 and 2000.

In 2004, it obtained route authorities for services to Abidjan, Accra, Dakar, Douala and Malabo. On March 26, 2006 services from Lagos to Accra were introduced, but have currently been suspended. The airline is owned by Alhaji Ahmadu Chanchangi (94 percent) and four other individuals holding a 1 percent stake each. It had 780 employees (at March 2007).

The Nigerian government set a deadline of April 30, 2007, for all airlines operating in the country to re-capitalise or be grounded, in an effort to ensure better services and safety. The airline satisfied the Nigerian Civil Aviation Authority (NCAA)’s criteria in terms of re-capitalization and was re-registered for operation.

The Nigerian Civil Aviation Authority (NCAA) grounded Chanchangi Airlines on July 5, 2010, citing a regulation that no airline can operate with only one aircraft in service, which was the case with Chanchangi at the time of its closure. On October 21, 2010, Chanchangi Airlines resumed operations between Lagos and Abuja.

Chanchangi Airlines failed to appear on April 1, 2012, to defend itself against charges filed against it by Ethiopian Airlines failing to settle a N14 million BR bill for maintenance services. Due to this, its plane was grounded at Bole International Airport where some analysts have predicted failure to make payment could lead Ethiopian Airlines to auction the plane.


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