The aviation sector in Nigeria is completely deregulated with 100% private sector participation. Currently boasting a total of 21 domestic airline operators, the Nigerian aviation industry, like its international counterparts, is highly regulated. Enumerated below are the various entrant and operational compliance requirements in the industry.
The Civil Aviation Act (the “CAA”) 2006 is the principal legislation governing aviation in Nigeria while the Nigeria Civil Aviation Authority (“the NCAA”) is the chief regulator of the sector and is responsible for the regulation of general civil aviation operations in Nigeria. The NCAA carries out this responsibility pursuant to the Nigeria Civil Aviation Regulations (“the Nig.Cars” or “the Regulations”) 2015. The Nig.Cars 2015 provides for general operational procedures in the aviation sector. The Regulations incorporate the Standard and Recommended Practices contained in the Annex to the Convention on International Civil Aviation (the “Chicago Convention”). Other regulatory agencies that regulate aviation in Nigeria include:
- Federal Airport Authority of Nigeria (“FAAN”) – responsible for managing all commercial airports in Nigeria
- Nigerian Airspace Management Agency (“NAMA”) – provides air traffic and navigational services for airline operators.
- Federal Ministry of Aviation (“FMA”) – This Ministry, which is now under the Ministry of Transport, is responsible for the formulation of aviation policies that will drive the sector.
Commercial Air Operations
Generally, commencing business operations in most sectors in Nigeria requires the incorporation of a company or corporate entity, the aviation sector in this regard is no exception. Section(s) 32 & 33 of the Civil Aviation Act (“CAA” or “the Act”) 2006 provides that no aircraft shall be used for commercial operations unless such aircraft has been granted a license, permit or other authorization by the NCAA; furthermore, the NCAA shall not grant such license where the applicant is not a citizen of Nigeria or is not a company registered under the laws of Nigeria and having its principal place of business in Nigeria. The provisions of the Act are also supported by relevant provisions of the Regulations. However, there seems to be a conflict between the Act and the Regulations with regard to foreign air operators. Paragraph 10 of the Regulation, which govern the operations of foreign air operators, does not require foreign air operators to incorporate a Nigerian company to engage in commercial operations in Nigeria.
Paragraph 10 also provides an application form, which foreign operators are to use to apply to obtain authorization to operate commercially in Nigeria. The application form provides for company details such as its registered name, address of principal place of business, fax, email etc. Once again, the form does not specify that such company must be registered in Nigeria. The Regulations contradicts the CAA in this regard where the Act provides that;
"The Authority shall refuse to grant a licence, permit, certificate or other authorisation in persuance of an application if it is not satisfied that-
(a) the applicant is – i. a citizen of Nigeria, or; ii. Being a company or a body corporate, is registered in Nigeria and has its principal place of business within Nigeria, and is controlled by Nigerian nationals”
Despite this conflict, foreign operators have been authorized to operate in Nigeria without the need to incorporate a Nigerian company. This suggests that the NCAA has chosen not to enforce Section 33 of the Act with regard to foreign air operators.
Permits and Licenses
Air operators will need to obtain relevant permits and licenses from the NCAA to commence commercial operators in Nigeria. These licenses are listed and discussed below.
- Air Transport Licence (ATL) - The Air Transport Licence (ATL) must be obtained by an air operator prior to undertaking air transportation business. It authorizes the operator to provide passenger and/or cargo air services in Nigeria. The validity of the ATL is for five (5) years and is subject to renewal.
- Airline Operating Permit (AOP) – This licenses an air operator to undertake non-scheduled flights (i.e. charter operations).
- Air Operator Certificate (AOC) – This is issued by the NCAA to certify that an operator is conducting its operations in line with the International Civil Aviation Organisation (ICAO) standards and recommended practices. Its validity is for two (2) years and renewal can be for subsequent terms of 2 years each.
Procedure and Requirements for Issuance of Licenses
As the Chief Regulator of civil aviation in Nigeria, the NCAA is responsible for issuing the relevant licenses and permits to prospective operators. The NCAA in its regulations has provided the necessary steps that should be followed to enable prospective applicants obtain the relevant permits they require.
The procedure and requirements for obtaining the Air Transport Licence (ATL) and Airline Operating Permit (AOP) are essentially similar, and distinct from the Air Operators Certificate (AOC).
The procedure for obtaining an ATL/AOP is as follows:
- Application to the Director General of the NCAA for the grant of an Air Transport Licence in the prescribed form (in writing) and should contain the following information:
- Name and address of applicant
- Type(s) of air services to be provided
- Proposed operational base of applicant
- Details of proposed routes to be operated where applicable
- Number and types of proposed aircraft to be utilized
- Time and frequency of the services
- Approval of the operational base of the airline
- Receipt of payment of N1 million non-refundable processing fee
- Publication in the official gazette
- Security Clearance by Ministry of Aviation
- Approval of the proposed operational base of applicant by Federal Airports Authority of Nigeria (FAAN)
The application should also be supported with the following documents:
- A Certified true copy of the Certificate of Incorporation of the Company.
- Certified true copy of the Memorandum and Articles of Association of the Company
- Certified True Copies of Particulars of the Directors of the Company (Form CAC 7)
- Certified True Copies of Statement of Share Capital/Return of Allotment of the Company (Form CAC 2) with minimum paid up share capital of
- N500,000,000.00 (five hundred million Naira) for domestic operations
- N1,000,000,000.00 (one billion Naira) for regional operations
- N2,000,000,000.00 (two billion Naira) for intercontinental operations.
- The majority shareholding is to be held by Nigerians and the board of directors must have at least one member as an aviation professional.
- Current tax clearance certificates of the company and of each of the directors
- Detailed business plan of the company
- Publication of Notice of the application in two (2) national daily newspapers
- Evidence of the applicant's financial solvency to undertake the business. This is to prove that the applicant is financially solvent to run operations for a period of three (3) months from the start of operations without resorting to any income from the operations
- Duly completed application forms (to be obtained from NCAA)
- Duly completed Personal History Statement forms and two (2) passport photographs for each shareholder having more than 5% equity shareholding
- Insurance policy for passengers/cargo and third party. The policy must have a minimum threshold of $100,000.00 USD (one hundred thousand US Dollars) per passenger.
ii. NCAA issues a notice of compliance stating that the applicant has complied with the requirements of the Licence
iii. The application is evaluated and an appropriate recommendation is made based on the outcome of the technical evaluation. The recommendation are forwarded to the Air Transport Licensing Committee (ATLC) for consideration and approval to issue the Licence. The approval is subject to the receipt of the Security Clearance or comment from the Ministry of Aviation.
iv. The applicant will also receive clearance from the State Security Services’ Office prior to the grant of the Licence.
v. Tariffs to be charged for the carriage of passengers and baggage shall be filed with the Authority and the public duly notified before their introduction in respect of scheduled services.
vi. A Licence holder is also required to forward to the Authority:
- Monthly statistical returns on aircraft movements and passengers up-lift; and;
- Details of flight schedules and changes thereof regarding frequencies and new destinations.
vii. NCAA proceeds to approve and grant the Licence to the applicant.
viii. Upon receipt of the ATL, an annual utilization fee of N200,000 will be paid to NCAA
2. Air Operator Certificate
The application process commences with the filling and submission of the Pre-Application form for the grant of AOC. The following documents are required in support of the application:
- Company Exposition
- Operator’s Maintenance Management Exposition
- Operations Manual
- Maintenance Equipment List for the aircraft to be used
- Maintenance Programme/Schedule for each aircraft type
- Training Programme
- Aircraft Flight Manual
- Any lease-purchase agreement on the aircraft, where applicable.
Prior to the grant of the Certificate, the operator must demonstrate capability by satisfying the following indices:
- Adequate staffing and organization
- Satisfactory Training Programme Implementation
- Adequacy of documentation
- Aircraft Conformity inspection
- Emergency Evaluation/Ditching Demonstration
- Aircraft Proving Test (at least 25 hours)
- Financial capability Assessment
It is to be noted that the AOC will only be granted to Nigerian companies and will not be granted to operators who wish to commence operations with wet-leased aircraft.
After grant of the AOC, the AOC holder shall endeavor to grant access to the NCAA to its facilities and aircraft to determine that the terms of the AOC and regulations are being adhered to.
Foreign Air Operators
As stated earlier, Paragraph 10 of the Regulations governs the operations of foreign air operators in Nigeria and provides for the approval and issuance of a “Document of Authorisations, Conditions, and Limitations” (DACL) by the NCAA.
A foreign air operator wishing to operate in Nigeria shall make an application to the NCAA in the prescribed form and such application shall be accompanied by:
- A certified true copy of a valid Certificate of Operation and associated operations specifications issued to the foreign air operator by the Foreign Authority that such operator is subject to;
- A copy of the approval page for a Minimum Equipment List for each aircraft type intended to be operated by the air operator in Nigeria;
- A copy of the current aircraft Certificate of Registration and airworthiness certificate issued for the aircraft types proposed to be operated by the air operator in Nigeria;
- A copy of the insurance certificate;
- A copy of the operational procedures and practices of the operator;
- A copy of a document identifying the maintenance checks that are required to be carried out for aircraft of the air operator while they are operated in Nigeria; Requirements for Application by Foreign Air Operators for Approval to Operate Into the Territory of Nigeria.
- A copy of the maintenance contract between the air operator and the Approved Maintenance Organisation, where the maintenance is carried out by an Approved Maintenance Organisation approved by the foreign authority;
- A copy of the air service agreement, with safety clause, allowing the foreign air operator to operate in Nigeria;
- In the cases of wet leased aircraft: a copy of the approval of the CAA of the State of the operator, with identification of the operator that exercises operational control of the aircraft;
- A proposed Aircraft Operator Security Programme for the foreign air operator who does not hold an Air Operator Certificate issued by the Authority which meets the requirements of the Nigeria Civil Aviation Regulations, for the acceptance and subsequent approval of the Authority; and
- Any other document the Authority considers necessary to ensure that the intended operations will be conducted safely.
The NCAA may issue a Document of Authorisations, Conditions, and Limitations to a foreign air operator applicant -
- Following approval of the foreign air operator’s application to operate into the territory of Nigeria;
- Upon a satisfactory administrative review of the documentation provided by the foreign air operator;
- When it has established bilateral or multilateral agreements with the State of the Operator that includes in the agreement the safety clause or;
- When it has not established bilateral or multilateral agreements with the State of the Operator, the Authority receives no significant safety findings or major deficiencies from available safety related information relevant to the foreign air operator.
Prospective domestic airline operators in Nigeria must endeavor to register their aircrafts and obtain a certificate of such registration from the NCAA. An aircraft that is not registered with the NCAA shall not be allowed to operate. Furthermore, any aircraft owned by a domestic airline must display its nationality and registration marks pursuant to the Regulations.
Dispute Resolution Procedures
General Violations of the Civil Aviation Act 2006
According to section 27 of the Civil Aviation Act 2006 (CAA), the Nigerian Civil Aviation Agency (NCAA) has powers to carry out investigations of complaints and occurrences and where necessary, to conduct hearings of alleged violations of any provisions of the Civil Aviation Act, NCAA Regulations or Rules and take actions necessary for the prevention of any violations thereto.
Similarly, Paragraph 1.3.1, mandates any person aware of a violation of the CAA or its regulations to report such violations in the form and manner as prescribed by the authority. The authority is tasked with the role of determining the nature and type of any enforcement actions to be taken by the authority. Such complaints shall be addressed to the Office of the Director General, Attention: Company Secretary/ Legal Adviser
The NCAA has a wide range of options available for addressing violations of the CAA, for example, where it is determined by the authority, that such a violation qualifies for an administrative action, the authority may take administrative actions by issuing a Warning Notice or a Letter of Correction. Other modes of resolving violations include: Counseling, remedial training and legal enforcement actions.
Court of Competent Jurisdiction
By virtue of the provisions of Section 251 (k) of the Constitution of the Federal Republic of Nigeria 1999 (as amended), the Federal High Court has exclusive jurisdiction for matters relating to Aviation and the Safety of Aircraft. This position is further confirmed by Section 63 of the Civil Aviation Act with regards to offences committed by the Nigerian Civil Aviation Authority in contravention to the provisions of the Act. However, there is an exception to this exclusive jurisdiction. According to the courts in the case of Onuorah v KRPC Ltd (2005) All FWLR (pt. 256) 1356, the exclusive jurisdiction of the Federal High Court does not extend to matters of simple contract. Therefore, if the subject matter of the claim pertains to matters of simple contracts, the relevant division of the State High Court will have Jurisdiction.
Future Outlook and Conclusion
The NCAA continues to demonstrate its commitment to ensuring a stable and improved aviation sector in Nigeria. The authority continues to promote practices aimed at improving the quality of aviation services offered in Nigeria, with the objective of improving the general travel experience in Nigeria. According the NCAA’s Statistics, domestic flight operations rose by 23% in 2018, therefore, despite the challenges facing the sector, the future of Nigeria’s Aviation industry remains bright. Additionally, the ability to leverage on a growing population of about 190 million people may result in more people utilising air travel. However, this will be dependent on a number of factors including, the growth of the economy, availability of the right infrastructures in place including technological awareness but most importantly the contribution of the Federal Government in growing the industry.