Following the protests by Virgin Nigeria and Arik Air against the Federal Government�s order that all airlines should relocate domestic operations to the new Murtala Muhammed International Airport Terminal II (MMA-2), the House of Representatives yesterday urged all the parties involved in the crisis to sheath their swords as they attempt to resolve the lingering crisis.
This is coming just as the management of Arik Air yesterday threatened to close down its business in Nigeria if the controversy persists.
Chairman of the airline, Chief Arumemi Johnson-Ikhide, who appeared at the interactive session, said the concession agreement which ceded the exclusive rights to manage scheduled domestic flights in and out of Lagos to the later by the Federal Government with Bi-Courtney Nigeria Limited could �cripple� the aviation industry
He said Arik might be forced to relocate its operations to either Cameroon or Ghana where it had received assurances of an enabling environment for private investment.
Virgin Nigeria and Arik are protesting the Federal Government�s directive that domestic flights from the international wing of the airport should be relocated to the MMA-2, built under BOT agreement and concessioned for 36 years to Bi-Courtney
Virgin Nigeria had gone to court to stop the Nigeria Civil Aviation Authority (NCAA) from effecting the directive.
Although both airlines raised safety issues, Virgin Nigeria which commenced operations in Nigeria in 2004, in particular argued that the relocation order, breached the Memorandum of Mutual Understanding (MMU), it entered into with the Federal Government before it started operations in Nigeria in 2004.
The clause which the airlines are now quarrelling with is the agreement with Bi-Courtney which states that no operator can own or run an alternative terminal while it subsists for a 36-year period.
The crisis led the House of Representatives Committee on Aviation to conduct an investigative hearing into the matter in Abuja on yesterday.
THISDAY, however, learnt yesterday that the Committee in a bid to find a lasting solution to the crisis, may ask the government to review the agreements entered with the companies in order to restore sanity into domestic flight operations
Arumemi-Ikhide, who appeared disturbed about the crisis, said the company refrained from making comments on the crisis but insisted the facilities at MMA-2, were not adequate to guarantee hitch-free operations.
He said the agreement government entered into with Bi-Courtney was a stumbling block because it left the fate of the commercial operations of airlines in the hands of a company to decide with the risk of stifling other business growth.
�We are talking of about $5.2 billion investment, which we have put into the industry in Nigeria. No investor will allow his money to be jeopardised that way.
�Bi-Courtney is trying to strangulate us; we will pack and go if Nigeria does not want us to operate here. This agreement is dangerous and can set Nigeria on fire.
�Arik is committed to obeying all laws but we shall contest every effort to cripple our business operations.
�Our insurers have warned us that there are safety issues; and I don�t think that Arik will be ready to risk further crises in the industry,� he said.
Johnson said in a bid which expired 12 midnight, January 31, Arik applied for a space at MMA-2 and paid a two-year rent of N160million to Bi-Courtney.
Based on discussions held with the management of Bi-Courtney, Arik paid another N80 million as rent for the third year.
He, however, expressed surprise that when Arik moved in to install its communications equipment, it was asked to pay another N25 million.
He told the committee that following the development, it sought to be given a copy of the government�s agreement with Bi-Courtney, but said that up to the time of the hearing, it had not been served.
Virgin Nigeria�s Director of Corporate Operations, Mr. Lanre Agose, who led the company�s team to the House yesterday, said the relocation would adversely affect its vision of �seamless operation�.
�We entered into MMU with the government in 2004; 51 per cent of the company has been ceded to Nigerians as agreed.
�MMA-2 will create constraints for us in terms of passenger connections and seamless operations,� he said.
Agose cited the November 2007 report by IATA, which raised safety concerns at the MMA-2 especially regarding the inadequacy of the apron to accommodate many aircraft.
Virgin Nigeria who revealed that it planned to purchase about 40 aircraft and create over 20,000 jobs in the next five years, said it would prefer to build a terminal of its own.
Wale Babalakin, a Senior Advocate of Nigeria (SAN) and Chairman, Bi-Courtney, while stating his company�s position dismissed the complaints of the airlines, saying that they were being hypocritical having realised that they were not comfortable with the agreement.
�I can tell you that the MMU Virgin Nigeria entered into with the government is not something that could be said to be binding,� he said.
Babalakin, who cited Clause 5b (6) of the MMU, pointed out that the company agreed to abide by any regulations issued by government.
�Now, government issued a directive on MMA-2 and they rushed to court; we held several meetings with Virgin Nigeria and never objected to moving to MMA-2.
�They have merely taken advantage of the weaknesses in our judiciary by being hypocritical because same Virgin came to Nigeria and wanted to monopolise the international operations,� he said.
The Managing Director of Federal Airports of Nigeria (FAAN), Mr Richard Aiseubogun, while explaining the details of the agreement, said: �We are now at crossroads. We are saying that we have an agreement with Bi-Courtney to manage the Lagos airport for 36 years. GAT was not concessioned to Bi-Courtney. It is still the property of FAAN.�
Feb212008