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FG wades into Aero, Oceanic Bank debt crisis

By Kenneth Ehigiator & Michael Eboh
The Federal Government has scheduled a meeting with managements of Aero Contractors Airline and Oceanic Bank Plc in Abuja today to resolve the face-off  over debts owed the bank by the airline.

This comes as government said Wednesday it would hesitate to ground any airline which has not shown adequate capacity to carry out safe operations.

The bank’s decision to recover its $200 million debts from the airline in one fell swoop had affected the airline’s operations negatively.

The Director-General of Nigerian Civil Aviation Authority, NCAA,  Dr. Harold Demuren, said this after a meeting with airline operators in Lagos, yesterday, adding that the Aviation Minister, Mrs. Fidelia Njeze, would preside over the meeting.

“The minister has summoned a meeting with officials of Aerocontractors and Oceanic Bank tomorrow (today) to resolve once and for all the differences between both companies over debts owed the bank by the airline.

“This meeting is a follow-up to the one held last week.  The minister met with officials of both companies for a whole day last week to see how this issue can be resolved so that the airline’s capacity to operate safe operations cannot be hampered,” Demuren said.

Demuren also warned that airlines that have not shown enough capacity to operate safe flights would be grounded.

His warning came against the backdrop of last Monday’s incident involving Aerocontractors as well as change of ownership of Virgin Nigeria Airways, said though the nation’s economy was deregulated, air safety could never be deregulated.

He assured Nigerians who have expressed fears that Aero’s current crisis with Oceanic Bank might affect its ability to carry out safe operations, to exercise restraint, as NCAA was closely monitoring all airlines to ensure that safety was not compromised.

Meanwhile, the Management of Oceanic Bank International Plc has said that continuing to disburse funds to Aero Contractors on their expired credit facility with the Bank will be tantamount to putting depositors’ funds at risk.

The Bank’s management, according to a statement, explained that Aero originally had a series of short-term facilities at an interest rate of between 17 and 19 per cent per annum with the bank, adding that these facilities expired since September 2009.

According to the Managing Director of the bank, Mr. John Aboh, a renewal offer from the Bank which substantially increased the tenor of the facility from between three months and one year to a 10-year period at a reduced interest rate of 12.5 per cent has been on the table for Aero since December 15, 2009.

To date, he added,  this offer has not been accepted by the board and management of Aero.

“Whilst Oceanic Bank remains committed to supporting Aero, the absence of a valid contractual loan agreement will put depositors’ funds at risk.

“We have bent over backwards to support Aero and have been waiting for an acceptance of our credit renewal since 15 December, 2009. We are very certain that the level of positive support given to Aero by Oceanic will be very difficult to replicate by any bank in this environment.

“However, it would appear that Aero just wants access to credit facilities without provision to pay back. The way forward is for Aero to pay down the facility or accept the renewal offer,” the Bank’s management said.

On last Sunday’s incident involving Aero’s flight in Lagos, Demuren said it was not true that the pilot made about 10 approaches to land, adding that a probe into the incident indicated that no such thing happened.

“As soon as that incident happened, we summoned Aero, spoke with the captain and checked the records with air traffic controllers, and we discovered that the pilot did not make 10 approaches because it is not just possible.

“The turbulence was so much that when the pilot saw a window, he wanted to take advantage of it to land, but it still was not possible because the weather was still very bad.  We also discovered that the pilot acted in line with Standard Operating Procedures (SOPs).

“But we will not hesitate to ground any airline that shows lack of capacity to carry out safe operations,” Demuren said.

He said the hue and cry that trailed the Aero incident was that of perception that since the airline was having problems with its bankers, it could no longer guarantee safe flight operations.

Also speaking on the issue, Director-General of Nigerian Meteorological Agency (NIMET), Dr. Anthony Anuforo, said the federal government would next week take delivery of two of the six weather Doppler radar imported to improve safety of the nation’s airspace.

According to him, four others will be received by month’s end, while installation of the equipment would have been completed at different airports in the country within the next two months.

Dr. Anuforo, who noted that the Aero incident was normal at this time of the year, said government’s determination to equip the airports with Doppler radar was with a view to make the airspace safe.

He said the radar would enhance the agency’s ability to give real time weather forecast to pilots for safe operations.


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