A Federal High Court sitting in Lagos on Monday ordered the seizure of an aircraft belonging to Emirates Airline over an N8.1 million judgment debt.
The order was sequel to a motion filed by Dr. Charles Mekwunye seeking the enforcement of a Supreme Court judgment in a suit between Promise Mekwunye and the airline.
In a judgment delivered on November 15, 2010, the Federal High Court held that the refusal of Emirates Airline to carry Mekwunye amounted to a breach of contract of carriage.
Consequently, the court ordered a full refund of the ticket without any deduction or charge and further granted N2.5 million in general damages and N250,000 in legal costs against the airline.
Granting the reliefs sought by Mekwunye, Justice Mohammed Liman held that “it is accordingly ordered that an attachment is hereby issued on the judgment debtor’s aircraft registered as ‘A6 Aircraft Type 77W EK: 783/784’, or any other aircraft belonging to the judgment debtor which flies into Nigeria Territory, to be arrested and detained until the judgment debt is fully paid. If there is default after 30 days, the aircraft shall be auctioned to satisfy the judgment debt.”
The judge also ordered that Emirates Airline to bear the cost of maintenance and custody of the detained aircraft.
Miss Mekwunye, who was then a student of North Texas University, Denton, Texas, United States had in 2008 dragged the airline to court for refusal of her two-way flight ticket from Dallas to Nigeria and back for no reason and for also refusing to fully refund the cost of the American Airline ticket she bought for her return trip to Nigeria.
She claimed that the airline offered no reason for its action leaving her stranded for days at the airport until she was able to secure a more expensive flight ticket on a longer route to Lagos.
Concerns Mount Over Airfare On Lagos-London Route
Lagos travellers pay 439% more
•Why we charge different fares from Nigeria-London — BA
Passengers travelling from Lagos to London in the coming days might be forced to travel through Abuja to their destination.
This is coming on the heels of massive differential in airfares for passengers travelling to Heathrow Airport, London through Lagos and those going through Abuja.
Findings by Vanguard Aviation World show that passengers flying on one-way economy ticket through Abuja on British Airways, BA, pay $501 (about N222,093) while those travelling through Lagos on the same airline and ticket class pay as much as $2,700 (about N1,196,910)
Also, passengers travelling through Ethiopian Airline on one-way economy ticket through Abuja pay N700,000, while those going through Lagos on the same airline and ticket class pay as much as N2.8million.
The fare differentials, according to industry operators may not be unconnected to demand and supply differentials but also noted that the distance is almost same for the two routes.
Vanguard gathered that flights from London to Abuja take six hours, and 20 minutes, while flights to Lagos from London take six hours and 25 minutes.
Though Air France maintains same fares from both routes the amount is also high at $2,141 (about …) on similar ticket class for a one-way journey.
A traveller who spoke to Vanguard about the development lamented her amazement to the development.
According to her, “I was to travel to London next week. So in a bid to ensure i pay less, I open the booking portal of BA, I was in Abuja and I mistakenly clicked on Murtala Muhammed International Airport, MMIA, and i was taken to the price to my amazement, the price i saw there was $2,700 I was shocked.
“I had to check very well to see if i had punched something odd. I realised I inputted Lagos instead of Abuja. So I had to readjust and the price I finally saw was far lower. This was quite outrageous as it was not supposed to be so.”
Another traveller who spoke to Vanguard Aviation World, said: “Why will Ethiopian Airline, and Africa airline put their airfare to London this high? I was expecting their price to be lesser than others but I was wrong.
“Even the price in Lagos differs by a far margin. Why would it be so?
“The ministry responsible should look into it, as for me it can only be attributed to extortion.”
Why our airfares differ in Nigeria – BA
Speaking to Vanguard Aviation World on the situation, BA’s Spokesperson, Josephine Simmons, explained that airfares can differ due to availability, airport taxes and other factors.
She stated: “Prices differ by airport due to numerous factors including customer demand and fare charges – including airport taxes.
“Most customers book their flights in advance, benefiting from competitive fares.”
Other stakeholders comment
The development has created a series of reactions from both stakeholders and travellers across the country.
While some stakeholders attributed the development to the exploitation of Nigeria’s passengers, others stated that the less demand in Abuja was strengthened by the security challenges.
According to the Principal Partner, Avaero Capital, Sindy Foster, the development possibly might be due to more demand than supply in Lagos.
“If BA had more demand from Abuja price would probably be higher. Most people are not flying direct between Abuja and London. I expect demand for Abuja went down due to security issues.”
Flights tend to be lower if there is more supply against demand. It is good that prices have come down in Abuja. Will be interesting to work out why they are still high in Lagos. I suspect there is less demand for Abuja.
The chairman of United Nigeria Airline, Obiora Okonkwo, said: “Why do foreign airlines charge Nigeria so much?
“In the aviation industry, one-hour flight fuel consumption is the same, the only difference is maybe different landing charges in London or Ghana, the rest is the same.
“I can assure you that if Air Peace goes to London today, Nigerians will fly to London with an Economy ticket of N500,000. Today the price is about N2 million, why should we pay such if they are converting from N450 to $1?
“We owe Nigerians this explanation. However, whatever is going on, this is a wake-up call that the local operators have to be supported as they have all it takes to operate internationally.
“Emirates have over $5 billion in support from their government. When we ask for support, it is not free, we pay back. American Airlines have equity of over $60 billion and a debt profile of $70 billion and those debts all come from government support.
“If the local airlines are supported, we can have the capacity that cannot be threatened globally. The easiest flight to operate is a long haul. Short haul is even more difficult as it is stressful to both the aircraft and cabin crew.
“It is even easier to go to London, aviation is the same globally, you are audited by IOSA, IATA and that is, they prevented us and make us looks bad.
“They are also aware that our quality and regulatory standards are high. We get crews and captains coming to Nigeria and they fail our exams and we send them back.”
Foreign airlines frequency in Nigeria
It would be recalled that Nigeria, a destination of over 22 foreign carriers, manages Bilateral Air Services Agreements, BASA, with over 78 countries.
These airlines operate daily, and weekly in Nigeria.
Ethiopian and ASKY, Togolese airline also operated by Ethiopian Airline, together operate 54 frequencies weekly in Nigeria.
African World Airways (AWA) has 49 frequencies per week; British Airways and Virgin Atlantic operate 21 frequencies weekly into Nigeria; EgyptAir with 16; Air France 15; Saudi Arabian Airways 13; Emirates 11; Lufthansa 11; Air Cote d’Ivoire10; Qatar 9; South African Airways 7.
Others were Delta, Royal Air Maroc, RwandAir, Sudan Airways, and Turkish Airways, which enjoy seven frequencies without reciprocity from Nigerian airlines.
Also, Etihad has five frequencies; Fly Mid Africa has four; Middle East Airlines – has four and Air Italy formerly Meridiana has three weekly flights to the country.
Kerosene Price Hits N1,041.05 Per Litre
The National Bureau of Statistics has said the average retail price of household kerosene paid by consumers in October was N1, 041.05 per litre.
The NBS stated in its “National Household Kerosene Price Watch” for October 2022 that the average price was a 9.90 per cent increase over the N947.30 per litre recorded in September 2022.
“On a year-on-year basis, the average retail price per litre of the product increased by 145.87 per cent from N423.42 recorded in October 2021.”
On state profile analysis, the report showed that the highest average price per litre of kerosene in October 2022 was recorded in Cross River at N1,304.17, followed by Enugu at N1,300.00 and Lagos at N1,294.44.
Conversely, it said the lowest price was recorded in Borno at N783.33, followed by Rivers at N804.17 and Bayelsa at N805.67.
The NBS said that analysis by zone showed that the South-East recorded the highest average retail price per litre of Kerosene at N1,191.14, followed by the South-West at N1,142.60.
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It said the North-East recorded the lowest average retail price per litre of kerosene at N905.18.
The report said the average retail price per gallon of kerosene paid by consumers in October 2022 was N3,516.87, indicating an 8.67 per cent increase from N3,236.27 recorded in September 2022.
“On a year-on-year basis, the average price per gallon of kerosene increased by 126.46 per cent from N1,552.96 recorded in October 2021.”
Private Jet Owners Sue Govt Over N30bn Tax
Owners of foreign-registered private jets, comprising top business moguls, leading commercial banks and other rich Nigerians, have dragged the Federal Government to court seeking to prevent the government from grounding their planes for allegedly refusing to pay import duty on the jets.
The Federal Government had last November approved the decision of the Nigeria Customs Service to ground 91 private jets belonging to some wealthy Nigerians over their alleged refusal to pay import duties running to over N30bn.
As such, following a presidential approval, the NCS in a letter directed the Nigerian Civil Aviation Authority, the Federal Airports Authority of Nigeria, and the Nigerian Airspace Management Agency to ground the affected private jets with immediate effect.
But owing to issues bothering on inter-agency rivalry and disagreements, the relevant government agencies could not ground the private jets.
However, in the past few months, the Customs has been making underground moves to perfect the process of grounding private jets whose owners failed to pay the import duty, multiple sources close to the development confirmed to The PUNCH on Tuesday.
17 jet owners
Also, further findings by our correspondents over the weekend revealed that at least 17 private jet owners had gone to court to stop the Federal Government from implementing the order.
According to the court papers seen by The PUNCH, the jet owners are seeking a judicial review as to whether it is lawful for them to pay the controversial import duty on their private jets or not.
The jet owners had sued the government using the foreign shell companies and trustees through which the foreign-registered jets were purchased.
Oftentimes, Nigerians and corporate bodies buy their foreign-registered private jets through foreign shell companies and trustees. Experts believe they often prefer to register the jets in foreign countries like the United States, United Kingdom, and Isle of Man, among others, to preserve the value of the aircraft in the event they want to sell it, as well as pay cheaper insurance premiums.
The latest findings showed that the jet owners had approached the Federal High Court Abuja seeking the court to determine, among other things, if they were liable to pay import duty.
The suit, with number FHC/ABJ/CS/1565/2021, is described as the matter of an application for judicial review by foreign registered aircraft against the Nigeria Customs Service and Nigeria Civil Aviation Authority.
According to the court document, the 17 applicants, which are mostly foreign companies of the Nigerian jet owners are: Aircraft Trust and Financing Corp Trustee, UAML Corp, Bank of Utah Trustee, Masterjet AVIACAO Executive SA, and Cloud Services Limited.
Others are MHS Aviation GmbH, Murano Trust Company Limited, Panther Jets, SAIB LLC, Empire Aviation Group, and Osa Aviation Limited.
The list also includes BUA Delaware Inc, Flying Bull Corporation Limited, Air Charter Inc, Sparfell Luftahrt GmbH, WAT Aviation Limited, and ATT Aviation Limited.
The NCAA and Customs were listed as respondents.
In a written address in support of the first respondents objector notice of preliminary objection, the court paper read in part, “The brief facts of this case are that the first respondents, having discovered that some operators of aircraft imported them under the guise of Temporary Importation Permit, were permanently imported into Nigeria and given TIP status to evade payment of lawful customs.”
A hearing date is yet to be fixed for the suit, according to preliminary findings by our correspondent.
However, there are strong indications that the NCS is making frantic efforts to get the private jet owners to pay the import duty.
Multiple sources confirmed on Tuesday that the NCS was not giving up on the decision to collect the revenue on behalf of the Federal Government, having obtained a presidential approval on the matter.
It was gathered that the agency might take a major decision on the matter very soon. It was further learnt that the Customs is in possession of government documents indicating that the private jet owners are by law required to pay import duty.
However, the spokesperson for NCAA, Mr Sam Adurogboye, said he was yet to be briefed but noted that, “’If a case is filed against an individual or organisation, what is to be done is to put up appearance and defend oneself.”
The NCS had in March last year embarked on a review of import duties paid on private jets brought into the country since 2006.
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Following the alleged discovery that several private jet owners, under the guise of Temporary Import Permit, had failed to pay the statutory import duty to the coffers of the government, the CG of Customs, Hameed Ali, set up a verification panel to review all TIPs and the relevant aircraft import documents of all private jets in the country.
At the end of the 60-day exercise, 57 private jets, which had licences for commercial charter operations, were cleared and issued with Aircraft Operators Certificate by the Customs.
However, 29 private jets, whose owners came for the verification, were found to be liable to pay the import duty.
The Customs also compiled a list of another 62 private jets whose owners failed to appear for the verification exercise but were found liable for import duty payment.
However, other private jet owners seeking to pay their import duty were given a 14-day ultimatum to clear the debts.
It is unclear the number of the jet owners that later paid the duty.
However, a list of 91 private jets whose owners had failed to present themselves for the import duty payment were presented to the NCAA, FAAN, and NAMA for the immediate grounding of their operations.
Some owners of the 91 jets reportedly wrote protest letters to the NCS, arguing why they could not pay the import duty because the jets were under lease payments.
The Customs, in its response to the letters, queried the rationale for bringing in the planes and allegedly fraudulently exporting them under questionable documentation processes in the past 10 years.
Unconfirmed officials had said the Ministry of Aviation directed the NCAA, FAAN and NAMA to suspend the grounding of the flight operations of the affected private jets.
Aircraft owners speak
Speaking on the development on Tuesday, the President, Association of Private Aircraft Owners Association, Mr Alex Nwuba, there is a need for the government to become transparent in the process of registering private jets.
He also said it might be difficult for the government to collect tax on private jets that are not fully imported into the country.
He said, “The idea is to ensure that people pay tax on imported aircraft. However, by keeping the registration of the jets offshore, how do you then pay tax on something that is foreign? The aircraft may have come and gone, but how do you pay tax on something that is not imported.
“The dilemma is if you register your private jet in Nigeria (5N), it is seen that it now have a lower value. The problem is that there is no transparency in our aircraft registration process. You cannot take the number of the aircraft, do a search and get the details. But if you do that for US-registered plane, you can get the details. But the summary is that you cannot collect duty on aircraft that is not imported.”
Nwuba, a pilot and former managing director of Associated Airlines, said the cost of duty might be one of the factors discouraging some private jet owners.
He said, “Of course, you are made to put up a bond when you are bringing in an aircraft on a temporary basis. However, while we are looking for revenue, it is not everywhere we can get it. Another issue is that, if you buy a private jet for $80m, you may need to pay a duty of over $10m; that may be high to some people.”
Some of the 91 private jets meant to be grounded belong to the senior pastors of some popular Pentecostal churches in the country, some Tier-1 banks with one of the banks owning two upmarket jets, the CEOs of some indigenous oil companies, and the chairmen of some Tier-1 banks.
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