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Foreign Airliner Leasing & Financing Un-Deserving Operators

Arik Air Ltd., and Aero Contractors Co. of Nigeria Ltd., Nigeria’s top two airlines, have been banned from getting loans by Nigeria’s Central Bank due to the massive debt they have accrued. Arik Air owes Asset Management Corp. of Nigeria more than $534 million. Aero Contractors owes more than $203 million. A bank that loans money to these airlines will face “serious fines from the government.” Air Nigeria recently collapsed owing crew a debt of four months’ pay, in addition to $175 million in loans to Nicon Investments Ltd..

Only three Nigerian airlines remain in operation. Arik Air has not published a date when it will resume flying.

Officially, according to the BBC, the carrier resumed domestic flights on Sunday Sept 24. However we did get anonymous input from Monrovia that as of Saturday, Sept 22nd, Arik Air was flying.

In George’s Point of View

Before making a loan, banks need to look past the uncertainties in airline survival, aircraft value, interest rates and the airline’s credit worthiness.

This is what the aircraft leasing companies should do:

Stop leasing planes to operators that are careless in their maintenance and pilot training.

Leasing companies should not look only at credit worthiness. Yes, that is one factor, but it is only part of the picture. Leasing companies must also make judgements based on the history of the airline operator performance, and maintenance.

If credit and performance history all checks out, the oversight is not over. The leasing company should monitor every single plane they have leased out to foreign operators.

If monitoring reveals any problems whatsoever, that pilots are not being trained, that they are not getting enough sleep, that the operator or aircraft goes on a black list, that the operator is shown to be negligent in any way, then the lessor should endeavor immediately to pickup/repossess that plane.

Maintaining every aspect of the plane’s maintenance, flight operations, crew resource management, and crew training is as crucial to the contract agreement as payments. Failure to keep everything up to date is as much a breach of contract and cause for action as is failure to pay.

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    Two major crashes occurred in the past 13 months:

    Gol-In September last year- 155 people died when a Boeing 737-800 operated by domestic company Gol collided with an executive jet

    Tam-In July,- 187 people were killed when an Airbus A320 overshot the runway at Congonhas.

    President Luiz Inacio Lula da Silva is quoted as saying “Our aviation system, in spite of the investments we have made in expansion and modernisation, is passing through difficulties.”

    An overland journey from Rio de Janeiro to Manaus takes 60 hours on a bus to Belem, followed by several days on a boat down the Amazon river. There is no astrobus.

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  • March 31-April 1 was a Busy Day

    George’s Point of View

    Let me know if you want the details here, I barely know what to choose. No deaths were reported with any of these incidents. (Altogether, it does look like our aviation has been taken over by the keystone cops)

    I think my favorite is the plane that stuck a deer, in Kill Devil Hills. Though I do have some regrets for the deer. Do you think he had his pilot’s license or was officially a “Devil”? For the deer’s sake, I am hoping this was an April Fools Day joke.

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    • AIRCRAFT ENGINE FAILED AND CRASHED, NEAR GRIFFIN, GA;
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    • AIRCRAFT DURING HIGH SPEED TAXI RUN, BRAKES CAUGHT FIRE, AURORA AIRPORT, SUGAR GROVE, IL
    • AIRCRAFT ON LANDING, RAN OFF THE END OF THE RUNWAY INTO A WOODED AREA, LINCOLN PARK, NJ
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    • AIRCRAFT ON LANDING ON A ROAD, GROUND LOOPED AND WING STRUCK A TREE, 40 MILES FROM BEAVER, UT
    • N901DA, DELTA AIRLINES FLIGHT 1220 MCDONNELL DOUGLAS MD 90 AIRCRAFT, ON PUSHBACK FROM GATE, DOOR STRUCK THE JETWAY, NO INJURIES REPORTED, DAMAGE IS UNKNOWN, SALT LAKE CITY, UT

    April 1

    • AIRCRAFT LANDED GEAR UP AT A GRASS AIRSTRIP, BATAVIA, NY
    • AIRCRAFT ON LANDING, STRUCK A DEER, KILL DEVIL HILLS, NC
    • AIRCRAFT SHORTLY AFTER DEPARTURE, CRASHED INTO A FIELD, TAYLOR, TX
    • AIRCRAFT FORCE LANDED IN A FIELD, NEAR FRANKLINVILLE, NJ
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    ICAO Declares Nepal as 45% Non-Compliant

    CAANInternational Civil Aviation Organization (ICAO) has declared Nepal as 7% percent more non-compliant than the global average of 38%.

    After an on-site audit during the Universal Safety Oversight Audit Programme , ICAO has given a non-compliance rating of 45% to Nepal.

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    Guam Route Emergencies Reflecting Vigilance or Roulette?

    After four emergency landings in Guam in the past couple of weeks, Continental/United made a statement to the press.

    Actually, four emergency landings…that’s not that unusual, is it? Of course, they were all at the same airport, with the same airline. I’ve written here recently about shabby looking, poorly maintained commercial airlines. As frequently as I fly, I really do not want to worry about whether or not a plane is capable of staying in the air. I don’t want to worry about a crew with a crippling pecking order, or pilots who don’t know how to fly. I really don’t want to worry about a broken plane.

    I am always pointing out the need for maintenance to keep a plane in peak running order. Maintenance is important; and also, the pilots tell me that it is crucial to keep an eye on safety directives, and concurrent events which may reveal crucial matters affecting entire fleets, such as operating parts nearing the end of their lifespan, faulty parts, etc…

    So someone should maybe look closely at those flights, and see if there is some factor that applies. Better to have prevention now, beforehand, than have a disaster happen, and lawyers looking into it after it is too late. Have these Guam flights been problematic in the past? Why are there problems now?I might ask how necessary are those flights?

    About those 4 landings, Koji Nagata Director of Corporate Communications said that:

    “We treat any issue aboard our aircraft seriously and our pilots will not hesitate to declare an emergency, when the situation warrants, in ensuring landing priority and returning our passengers and crew safely to the ground as quickly as possible. Typically a declaration of an emergency is precautionary in nature, as was true with both cases in question, and the situations were effectively managed without incident.”

    Sure it would be great to never have emergencies. However. The time to handle an emergency IS BEFORE it turns tragic. Being able to handle emergencies is one safety skill at the top of the list of pilot skills, and one that can not be separated from the other skill that is becoming alarming among pilots (pilots who are losing the ability to fly due to automation.)

    Sometimes factors are not clear. For example, it is true that in some recent tragic situations like the RusAir jet crash I talked about yesterday, there was a problem in the cockpit that prevented the crew from coping with the emergency. Bad flying? Primitive Airport? Insubordinate navigator and Inexperienced pilot? But it all came down to one conclusion: together or not, at that date and time, they were unable to cope with their emergency-bad weather, foggy landing, a plane that is a flying behemoth landing in a primitive airport, and they took down a whole plane full of people with them.

    And as for the four emergency landings Continental/United experienced recently:
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    The planes landed safely. An emergency landing, a precautionary landing (whatever they want to call it), they handled the emergencies proactively, and landed safely. It is a whole lot better than the alternative.

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  • Hudson River Fly By

    George’s Point of View

    Don’t be alarmed over that jet that flew low over the Hudson River around 10 a.m. today. Blame the Defense Department who is conducting a photo op with two F-16s and a Boeing 747. The whole experience is going to be over by 10:30.

    As if New Yorkers on the Hudson haven’t had enough of aviation surprises. Next time you need a “photo op,” try Pixar Studios. No doubt it will be cheaper than gassing up two F-16s and a Boeing 747–not to mention all the medical bills from heart attacks and nervous breakdowns over planes flying low over NYC. There are going to be repercussions over the emotional factor AND the unnecessary expense. I would not want to be the one who 1. alarmed all of New York City AND 2. on their own dime. Talk about chutzpah.

    * update
    Looks like I’m not the only one who feels this way.

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    Press Release – FAA Adopts “Comprehensive Solution” to Widespread Fatigue on Aging Aircraft


    For Immediate Release
    November 12, 2010

    WASHINGTON, D.C. – In a continuing effort to address aging aircraft issues, the Federal Aviation Administration (FAA) has finalized a rule designed to protect most of today’s commercial planes and those designed in the future from structural damage as they age.

    The new rule seeks to prevent “widespread fatigue damage” (WFD) by requiring aircraft manufacturers and certification applicants to establish a number of flight cycles or hours a plane can operate and be free from WFD without additional inspections for fatigue. Manufacturers have between 18 and 60 months to comply depending on the particular aircraft type.

    Once manufacturers establish these limits, operators of affected aircraft must incorporate them into their maintenance programs within 30 to 72 months, depending on the model of aircraft. After the limit is in the maintenance program, operators cannot fly the aircraft beyond that point unless the FAA approves an extension of the limit.

    “Safety is our highest priority. This rule provides a comprehensive approach to the problem of widespread fatigue in aging aircraft,” said U.S. Transportation Secretary Ray LaHood. “Requiring carriers to regularly inspect their aircraft for possible fatigue is essential to ensuring the highest levels of safety.”

    “We’ve addressed the problem of aging aircraft with numerous targeted regulations and 100 airworthiness directives over the years,” said FAA Administrator Randy Babbitt. “This rule is a comprehensive solution to ensure the structural safety of today’s airliners and the airplanes of tomorrow.”

    An airplane’s metallic structures are stressed and can develop cracks when they experience repeated loads such as the pressurization and depressurization that happens on every flight. While airlines regularly inspect aircraft for cracks exceeding a certain size, WFD involves aircraft developing numerous tiny cracks, none of which would have raised concerns individually but which together run the risk of joining up and impairing the structural integrity of the plane.

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    The FAA is working closely with the European Aviation Safety Agency (EASA) and other national authorities to harmonize this rule with their regulations as much as possible. EASA is now developing rulemaking to address WFD, and the FAA participates in that process.
    The final rule is on display today at the Federal Register: http://www.ofr.gov/OFRUpload/OFRData/2010-28363_PI.pdf . It will be published in the Register Monday, November 15 at: http://www.gpoaccess.gov/fr/.
    ###

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