One of the immediate problems the incoming administration of governor Prince Bassey Ottu of Cross River State has address is the true position of the assets and liabilities of the state; especially in respect of its two Boeing aircraft with Aero Contractors airliners.
While the immediate past governor Prof Ben Ayade has been embroidered in controversies over the status of the aircraft with the indigenes of the State in one hand, he also has issues to settle with Aero Contractors airline on the other hand over the Memorandum of Understanding signed and over N900million indebtedness of the State government to Aero Contractors airline.
Nigerian Business Travel News can report that the issue of who controls the aircraft is getting messier by day
Our correspondent gathered that the aircraft B737-300 with the registration number: 5N-BYQ is still parked at the Aero Contractors hangar, while the other B737-300 with the registration number: 5N-GRS is at the graveyard of the Murtala Muhammed Airport (MMA), Lagos due to its non-airworthiness.
Some of the emerging facts indicated that Aero Contractor had been the, operator and manager of the aircraft since the Memorandum of Understanding (MoU) was signed with the State Government on April 30, 2021.
Aero Contractors is however reluctant to release the aircraft to the State Government over an alleged breach of agreement by the government and the debt profile of over N900million.
A reliable source at Aero Contractors who doesn’t want his name in prints because he doesn’t have the authority to speak on the issue said: the arrangement was not tidy. Because there are so many agents in the deal. So neither Cross River State government nor Aero Contractor benefited from the deal. But the agents.
“If I were there, I would have asked for a full dry lease of the two aircraft, which will enable us manage them 100 per cent and pay to the state government but they extended the arrangement to a third party, which they dubbed, coordinator. I didn’t understand that. The arrangement is not favourable to Aero. I learnt it is also not favourable to Cross River State government. So, the arrangement is not transparent and sustainable and that’s why we may not operate the aircraft again; unless they are given to us on dry lease, which is arrangement that is obtainable all over the world.”
Our correspondent learnt that about two weeks ago, representatives of Cross River State Government, led by Jake Ottu Enyia and Mr. Udiba Effiong Udiba, Commissioners for Aviation and Asset Management and Recovery, respectively, held a meeting with the management of Aero Contractors management on the possibility of returning the aircraft for concessioning,
While the Management of Aero Contractors had agreed to the deal, it however, raised concerns over the N900 million debts owed by the State government.
When contacted, a source close to Aero Contractors confirmed the development with our correspondent, but declined to give more details.
The source told our correspondent that due to some disagreement with the State Government, Aero Contractors had suspended the use of the aircraft, which is at present still parked at its hangar.
According to the source, the Cross River Government failed to pay the airline for maintenance of the aircraft while the sharing formula agreed by the duo was not equally honoured.
It was learnt that the agreement stipulated that as the operator, Aero Contractors would be entitled to 10 per cent of net sales after deductions of all taxes and charges and all operations expenses as well as any fixed amount due to Aero.
For IRS Airlines Limited; it is expected to get 5 per cent, while Cross River State Government would earn 85 per cent on the same conditions attached to Aero Contractors.
The source said: “The agreement between Aero Contractors and Cross River State Government has broken down over non-adherence to the MoU. The State Government did not pay for the maintenance carried out on the aircraft in the fleet of the airline, which is over N900 million.
“Also, the State Government told the management to handover the aircraft to IRS Airlines Limited and prepare it for concessioning. But, the management insisted on the payment of debts owed before such a state could take place. As I am talking to you now, nothing concrete has been reached.”
