In this interview with OLUSEGUN KOIKI, Aero Contractors’ managing director, Capt. Ado Sanusi, discusses his objectives for the airline as well as the repayment of debts he has taken out from the Asset Management Corporation of Nigeria (AMCON) since 2017. Excerpts:
Sir, the Asset Management Corporation of Nigeria (AMCON) gave you some startup loans when you were hired as the CEO of Aero Contractors. How far along are you with loan repayment today?
As you are aware, Aero Contractors was placed under receivership by the Asset Management Corporation of Nigeria (AMCON) due to a debt. The AMCON took over the company, converted a portion of the debt into equity, and now owned 60% of the airline. However, when I arrived in 2017, the airline had been closed for almost eight or ten months, and I had to take out a loan in order to restart it.
Although I can’t recall the precise amount, I believe it to be around N300 million, or half a billion naira.
When we joined, we requested approximately N3.5 billion from the Asset Management Corporation of Nigeria (AMCON), but we never received it.
For us to take off, AMCON granted almost N500 million. We utilized the money, which arrived in installments, to stabilize the company.
Four of our fleet’s aircraft and helicopters were flying for the first time when we performed the initial C-check. Recovery was imminent, and everything was moving in the right manner.
I was subsequently transferred to another project, but regrettably, the company’s fortunes plummeted once more, leading to its closure.
I didn’t want to go back, but I was called back from that assignment and asked to come and restart the business.
“Well, if you don’t, we will have no option, but to liquidate,” was the final thing I said to AMCON management after they spoke to me for almost six months and I refused.
The history of aviation firms like Aero Contractors, which have been in business for more than 65 years, was something I didn’t want to see.
Imagine the countries that attend our conferences and declare, “Oh, this company has been in existence for 40 years.” Our business has been around for almost 50 years.
When Nigeria arrives, Ethiopian Airlines will say, “Oh, we’ve been in business for more than 70 years,” and there won’t be any businesses that have been around for more than 40 or 50 years.
I believed that we ought to preserve this company’s legacy at the very least. Aero Contractors and Dornier Aviation in Kaduna are, I believe, the two oldest aviation firms in Nigeria. Naturally, this is due to the fact that Nigeria Airways has been liquidated. Since these are established businesses, I agreed to step in since I believed that we shouldn’t let AMCON liquidate the airline.
I returned, even though I didn’t want to. As previously mentioned, the business was closed for roughly eight months. They owed money for salaries and other things.
If you recall, the reason I returned was right after the COVID-19 pandemic.
I mentioned that the Federal Government had authorized funds for all airlines at a single-digit interest rate. I stated that access to that loan is the sole reason I can return after COVID. And I recall that we requested a loan of roughly N3.5 to N3.7 billion in order to turn the business around and repay the loan in 12 to 24 months.
If we were granted a loan, we demonstrated that we could repay it. Therefore, they agreed to lend us the money in principle.
We eventually received another loan from AMCON, which at first I believe was somewhat more than N500 million. Naturally, we got to work, and after that, we brought back the first airplane, the helicopter industry, and everything else.
We then began to pay them. We have finally paid back everything, which makes me delighted.
When was the last time you made loan payments?
We received the loan in December 2022, and we completed all of the payments in March.
Do you think this business will continue after you leave, sir?
This is a really intriguing topic since, after joining the company in 2017, I believed I had moved it to a point where it could no longer return to the closed-down state it had been in prior to my arrival, but regrettably, it did. I was living in 2021 at the time.
I’m fighting to make sure we’ve passed that stage as we speak. Instead of creating an institution around myself, I’m creating one that will endure long after I’m gone.
My goal is to make sure the business can continue to prosper when I leave. And that’s the only legacy I can leave.
At this age, my only goal is to leave a legacy that will allow the business to prosper after I’m gone, continue to hire Nigerians, and continue to hire young people to work in our Maintenance, Repair, and Overhaul (MRO) facilities, which are among the best in West and Central Africa.
Reviving our MRO makes me very pleased. As of right now, we are capable of performing major checks and maintenance on Boeing 737NGs.
We just completed work on two aircraft: one from Ghana and one from Senegal. One day, I hope, this location will serve as a repair center for West and Central Africa.
Regarding the recently enacted Tax Reform Act, which is expected to go into effect in 2026, what are your thoughts?
Allow me to discuss the aviation sector that I work for. The Nigerian aviation sector is already facing difficulties, and as a result, we approached the Federal Government prior to the enactment of the tax reform bill.
We have requested a number of exemptions from customs charges, the Value Added Tax (VAT), and other taxes.
The Federal Government recognized the difficulties facing the aviation sector and approved the majority of our petitions; now, they are returning everything to us.
All of the privileges we received have been taken away, and we are now responsible for paying for everything. And while I agree that it is tax reform, I also think that the President and the Federal Government will examine the particular industry and its unique problems and find solutions. That’s what I think will occur. There won’t be a sweeping implementation.
In most regions of the world, transportation is already VAT-free, but how can we reinstate VAT in aviation? When we discuss this, we say things like, “Well, the VAT is for the government, so the passenger is paying, but it increases the price of the ticket.” This lowers the number of people who can purchase the ticket, which in turn lowers my ability to make a profit. It’s really easy.
Keep in mind that, other from the food supplied in the airplane, we do not manufacture anything related to aircraft in this nation. Alhaji Aliko Dangote has made it possible for the nation to develop Jet A1 domestically. Other than that, though, everything was imported prior to that time.
Yes, the government can make a lot of money by taxing the airlines because they are expensive—aircraft cost $30 million to $40 million—and you can figure out how much money you will make if you impose even a 10% tax.
I need to figure out how I’m going to pay for the jet, including the customs charge that was applied to it.
Even with a dry lease, it is now extremely impossible for me to make the payment.
Although customs will bring in trillions of naira for the federal government, they are also destroying businesses, particularly in the aviation industry.
If the new law is put into effect as is, it would cause societal problems and leave thousands, if not millions, without jobs. Indeed, the government will have plenty of money, but it will also have security issues.
Millions of young people are unemployed while you have trillions in your coffers.
This is the reason why developed nations balance the two by examining both the unemployment rate and revenue generation. Millions of young people are unemployed, thus you cannot have that much money in your coffers. You must provide the company the opportunity to prosper and hire staff. That’s what we’re requesting.
What actions have you done to inform the government of your views prior to the implementation starting in January 2026?
Because of this interview, I think the Federal Government will listen to our grievances and take the necessary action.
They don’t require any other information. As stakeholders, we are warning them that this will harm not just the airlines but our entire sector.
The parastatals will face some challenges as a result of the tax change. The agencies have no control over their Internally Generated Revenues (IGRs), according to what I’ve read, but I’m not sure if that’s accurate. The money that the airlines would pay would go straight to the Federal Government’s account, and the government would then return the money to the agencies if the agencies had no control over their IGRs.
However, keep in mind that at the start of this administration, the government withheld half of the agency earnings into the Treasury Single Account (TSA). These parastatals are based on cost recovery rather than profit.
Therefore, I don’t mind if the Federal Government takes money from the Nigeria Civil Aviation Authority (NCAA) and turns it into a business to make money, but I’m worried about the NCAA and the Nigerian Airspace Management Agency (NAMA), which have a cost recovery concept, and you cut half of their revenue. They cannot survive on fifty percent, thus if they are adhering to the cost recovery approach, they will be extinct.
If the parastatals are making do with half of their earned revenue, then I, as an airline operator, have been overcharged. I am therefore overcharged.
How do you feel with the government’s claim that the Tax Reform Act aims to lessen systemic corruption?
Of course, I also believe that. We Nigerians will assign the assignment to another agency if we find an issue with remittance or collection.
How can we be certain that corruption won’t spread there? So why don’t we deal with that agency’s corruption? Why don’t we deal with that issue at its source? If the parastatals’ collection and non-remittance of funds is the issue, why don’t you handle it and ensure that we use all available tools to modernize, digitize, or electronically transfer it? There are numerous things we may take to minimize corruption and decrease human contact.
If someone is caught, we use him as an example, which would lead to others following suit, but instead we say, “Oh, stop it.” Don’t do this, don’t do this, don’t gather it.
By doing this, we have most likely passed along the same issue to the next agency that will be working on it. The goal of tax reform is unquestionably to reduce corruption while simultaneously increasing efficiency and collection. However, if we fail to address the underlying problems and employ technology to combat corruption, we will likely find ourselves in a similar situation under a different name.
Will the airlines be destroyed by the Tax Reform Act?
If the Tax Reform Act does not address the unique issues in the aviation business, it will help hasten the collapse of several airlines.
