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BASAs: Nigeria’s battle with disadvantaged treaty

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BASAs: Nigeria’s battle with disadvantaged treaty

Nigeria is generally viewed as having one of the most liberalised air transport industries in Africa.  Although still competitive within Africa, it has a significantly weaker bargaining power as regards the BASAs with non-African countries, thereby leading to an imbalance with results spanning from increased dominance of foreign airlines to capital flight. WOLE SHADARE reports 

 

 

Business of freedom

Nothing should stand in the way of aviation. Aviation has been described as business of freedom. Aviation is globalization at its very best. But to deliver aviation’s many benefits needs borders that are open to people and trade.

Over the years, countries Bilateral Air Services Agreements (BASAs) had been modified to guarantee more flights between nations having air pacts with one another. These agreements have become uneven with one party seeking to take advantage of the weaker side to have more flights than their counterparts. Not a few have given it different terms ranging from ‘skewed’ to ‘imbalance and one-sided’ among others.

The lobby

Negotiations to enter into BASAs are usually spearheaded by the Ministry of Aviation after extensive consultation with aviation regulatory authorities and concerned institutions, for example, the immigration authorities.

However, it is quite common to see airline operators, desirous of expanding their routes to target destination, lobby the Ministry of Aviation through diplomatic channels, to engage in formal talks, which usually lead to the commencement of negotiations between countries.

In general, BASAs are negotiated based on the five freedoms prescribed under the International Air Transport Agreement (IATA, which are stated as privilege to fly across a state’s territory without landing;  privilege to land for non-traffic purposes, for refuelling, repairs and maintenance; privilege of an airline from one country to carry traffic from its own country to another country; the privilege of an airline from one country to carry traffic from another country to its own country and the privilege of an airline from one country to carry traffic between two other countries, provided that the flight originates and terminates in its own country.

Out of the five freedoms mentioned, the first two freedoms are considered technical rights while the last three are considered economic and commercial traffic rights.

Unutilised pacts

Never has BASA been talked about than in Nigeria where everybody has become an expert in the subject. Government has been taken to the cleaners because of what they describe as its lackadaisical attitude and lack of policy foresight to protect Nigerian carriers that are not only weak to compete but offer little in terms of financial might to compared with the smallest airlines in Europe.

Nigeria presently has 90 BASA pact with only about 39 of it active. Many of these have been reviewed to create opportunities for domestic carriers, but are largely not utilised. Specifically, domestic carriers are yet to utilise 10 per cent of the air pact due to their limited capacity.

Currently, 33 foreign carriers operate in and out of Nigeria almost on a daily basis. Among them are nine African carriers. Air Peace recently opened Lagos-Dubai operations.

Agreements without reciprocity

Nigeria is into commercial agreements with many countries that operate to the country without reciprocity. The country rakes in millions of dollars from the deal, which clearly shows that the country is not losing on all fronts.

Many of the foreign airlines have also been accused of mopping up the domestic market with designations handed them to operate to Kano, Lagos, Abuja, Port-Harcourt and other cities.

Until recently, and due to the terrible state of Enugu airport, Ethiopian operated to Enugu and Kaduna airports. The airline relies on the Single Air Transport Market (SAATM) to which Nigeria and 28 other countries including Ethiopia are signatories.

SAATM is a project of the African Union to create a single market for air transport in Africa. Once completely in force, the single market is supposed to allow significant freedom of air transport in Africa, advancing the AU’s Agenda 2063.

Some aviation experts have passed some jokes on Nigerian carriers that despite the over 80 international routes given to them, they lack the capacity, discipline to operate profitably.

Expert’s view

Nigerian-born international expert and Chief Operating Officer (CEO), African Aviation Services Limited, Mr Nick Fadugba, says the country’s small fleet of aircraft will make it practically impossible for it to compete with foreign counterparts.

The former Secretary-General of African Airlines Association (AFRAA) put the average fleet size in Nigeria at a maximum of 10 aircraft, a number not enough to compete with British Airways that has over 400 aircraft.

His words: “Delta Airlines have over 500 aircraft. Even Ethiopian Airlines has a 110 aircraft. So how can small airlines compete? And I am not being disrespectful by the way, the airlines I am not talking about is fleet size, I am not talking about commitment to the industry but I want to be realistic, because this industry is cut throat. If you don’t have a critical mass in terms of size, in term of good management, in terms of fleet, in terms of good network, it is very hard to succeed.”

However, since Nigeria Airways was liquidated there was no airline to reciprocate on bilateral air service agreements, so foreign airlines gained a huge advantage over Nigerian airlines.

Although Nigeria currently lacks a national carrier, a number of foreign airlines operate to and from the country at varying levels of frequencies to multiple destinations from Nigeria’s international airports located in Lagos, Abuja, Port-Harcourt and Kano.

The reality of operating a national carrier is not as clear cut. A national carrier, unlike other government owned institutions, must be run as a business.

National carrier question

In arguing for a national carrier, a lot of confidence is inadvertently placed in the Ministry of Aviation’s ability to operate the national carrier as a profitable business. The ministry would be expected to take pains to ensure that costing, pricing, advertising, marketing and other business fundamentals are effectively and efficiently carried out to a professional standard.

It is apparent that certain BASAs have been negotiated or renegotiated without extensive consideration of the commercial elements required for the industry to experience the proposed targeted benefits of BASAs neither has there been much emphasis on the economic realities under which the country is operating.

Most agreements provide for royalties to be paid to the Nigerian government where the nominated Nigerian air carriers are unable to reciprocate under the agreement. This measure may be a sound way of boosting government revenue under the agreement but it does nothing commercially for the industry. In some cases, agreements have been signed to stop the payment of these royalties altogether.

Contrast

In stark contrast, in 2014, Emirates entered into an agreement with South African authorities for additional frequencies from South Africa to Dubai. It was reported that the additional frequencies were granted on the condition that the airline pay 40 per cent of the cost of each ticket to South Africa Airways.

As such, there is a commercial benefit to the national carrier and the nation, by extension. It is recommended that the government consider similar options or other commercial options so as to give an incentive for indigenous carriers to continue operations and possibly expand their operations internationally. The idea is not to reduce the frequencies or entry points of foreign carriers but to increase the indigenous air transport industry to a level of competitiveness that would rival that of any foreign country.

Last line

However, as attractive as the concept of reciprocity of rights is in BASAs negotiation, Nigeria as an economy is not primed to take full advantage of the concept. This is because the concept of reciprocity of rights must be exploited within the body of the existing regulatory framework of each participant country. Consequently, whereas the United Kingdom’s extant laws on commerce, immigration and registration of companies are robust enough to streamline foreign entry into their domestic market, Nigerian extant laws are not yet that robust. This results in a huge gap between Nigerian airlines and their foreign counterparts.

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Aviation

Bird strike resurgence poses challenge to airline operators

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Bird strike resurgence poses challenge to airline operators

…spurs over N5bn loss annually

 

The resurgence of bird strikes in Nigerian aviation industry and its economic losses to airlines, which is put at approximately N5billion annually, has become a source of worry to operators.

Although bird strike is a global phenomenon, many factors such as the nation’s carelessness to the environment culminating in over grown bushes and other untidy behaviours around the aerodromes are escalating the activities of birds and animals around airport areas.

A bird strike is a collision between an airborne animal, usually a bird or bat and a manmade vehicle, usually an aircraft. The term is also used for bird deaths resulting from collisions with structures such as power lines, towers and wind turbines.

Bird strikes are a significant threat to flight safety, and have caused a number of accidents with human casualties. There are over 13,000 bird strikes annually in the US alone.

However, the number of major accidents involving civil aircraft is quite low and it has been estimated that there is only about 1 accident resulting in human death in one billion (109) flying hours.

The majority of bird strikes (65%) cause little damage to the aircraft; however the collision is usually fatal to the bird(s) involved.

In monetary terms, it is estimated that about $1.2 billion per annum is lost to bird strike by the global aviation industry. In the United States of America about $650 million is lost annually as a result of bird strike.

Bird strike incidents usually affect the engines of aircraft, which cost about $1.5 million (N547.5 million) to replace, depending on the type and capacity of the aircraft involved in the incident. This is apart from the cost of shipping the engine into the country.

Nigerian airlines experience at least 12 bird strike incidents annually, our correspondent gathered. He reported that in the past 24 months, there has been no fewer than 28 bird strike incidents recorded across the country’s airports.

Statistics of the incidents obtained by New Telegraph indicates that the airlines encountered 14 bird strikes during take-offs and another 13 on landings, with half of the incidents happening at the Murtala Muhammed International Airport, Lagos.

Virtually all domestic airlines have experienced one form of damage to their engines or nose wheel. Ethiopian Airline landing gear was hit by a massive bird last week Thursday but caused just minimal damage.

In the past two months, at least two Nigerian carriers experienced major bird strike incidents that severely damaged the aircraft’s engines, costing the airlines and their insurers millions of dollars to replace the engines.

Air Peace is the hardest hit as many of its airplane engines had been damaged, Arik, Aero, Dana, Azman and others are becoming almost a monthly occurrence.

Spokeswoman for the Federal Airports Authority of Nigeria (FAAN), Mrs. Henrietta Yakubu, told our correspondent that the agency was looking at making sure it eradicate or reduce this threat of bird ingestion to aircraft or animal incursion into the runway and so the need to disperse the discovered roost before it became worst.

Being a pilot and a frequent flyer along the MMA axis, she disclosed that the Managing Director of FAAN, Captain Rabiu Hamisu Yadudu, like other pilots, have been aware of the roost for some time as they see it when they take off or land due to the fact that the habitat is directly under approach flight path of aircraft that are inbound runway 18L Murtala Muhammad Airport.

A source, who pleaded anonymity, attributed high incidence of bird/wildlife strikes in to the attraction of many species of wildlife to the airports due to the presence of thick bushes, waste dumps and farmlands around the airports.

He called for adequate funding of the airports by the acquisition of modern safety equipment in the airports, stressing that this will also allow adequate maintenance of vehicles, proper habitat management, adequate fencing and regular training and retraining of bird/wildlife hazard control officers.

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NCAA notifies pilots, operators of new format for birds, wildlife strike reporting

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NCAA notifies pilots, operators of new format for birds, wildlife strike reporting

The Nigerian Civil Aviation Authority (NCAA) has notified pilots, airports and Airline Operators as well as Aircraft Engineers of a change in birds and wildlife strike reporting format.

Mr Sam Adurogboye, General Manager, Public Relations, NCAA, made the announcement in a statement issued on Sunday in Lagos.

Adurogboye said the International Civil Aviation Organisation (ICAO) had evolved a new format for birds and wildfire strike reporting.

According to him, the European Coordinating Centre for Accidents and Incidents Reporting System (ECCAIRS) Excel-based format will now be used for ICAO Bird strike Information System (IBIS) reporting.

He said the notification was contained in an advisory circular with reference NCAA/AAS/BHC/04/006/11/132 dated July 30 to all airports/airline operators, pilots and aircraft engineers.

Adurogboye said the notification was signed by the Director, Aerodrome and Airspace Standards, Mr T. A. Odunowo on behalf of the Director General of NCAA.

He said it was mandatory for them to forward to NCAA, Directorate of Aerodrome and Airspace Standards (DAAS), using the attached IBIS-ECCAIRS form for all Bird and Wildlife strikes at their Aerodromes on or before 30 days of occurrence for the submission.

Adurogboye said this was in accordance with the Nigeria Civil Aviation Regulations (Nig. CARs) 2015, Part 12.6.23.2 and Aerodrome Standards Manual (ASM), Section 13.2.4.2.

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Aviation

Lufthansa cancels 1,300 flights over strike

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Lufthansa said Wednesday it was scrapping 1,300 flights as German cabin crew pressed ahead with a two-day strike, plunging passengers into travel chaos amid an escalating row over pay and conditions.

“As a result of the strike, around 180,000 passengers will be affected by 1,300 flight cancellations,” the airline said in a statement after losing a last-minute court battle to halt the walkout.

The 48-hour stoppage called by the UFO flight attendants’ union is due to start at 2300 GMT on Wednesday and last until 2300 GMT on Friday.

The union said the stoppage would affect all Lufthansa departures in Germany during that time.

Germany’s largest airline said it “regrets the inconvenience for the passengers”.

The carrier was putting together an alternative flight schedule where possible, it said, adding that affected passengers could rebook their journeys for free or swap their domestic flights for train tickets.

The announcement of 700 flight cancellations on Thursday and roughly 600 on Friday come after a Frankfurt labour court denied Lufthansa’s request for an injunction to block the strike.

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Aviation

Pilot gets life ban after woman’s cockpit photo

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Pilot gets life ban after woman’s cockpit photo

A Chinese pilot has been banned from flying after a photo went viral showing a female passenger in the cockpit.

The photo was taken in January on an Air Guilin flight from Guilin city to Yangzhou city, state media said, but was widely shared this week – causing the airline to take action.

It shows a woman posing in the cockpit with refreshments laid out next to her, reports the BBC.

Air Guilin said in a statement the pilot had violated air safety regulations.

The incident took place on January 4 on flight GT1011 from Guilin city to Yangzhou city, according to state media outlet ‘The Global Times’.

But it was brought to the airline’s attention on Sunday after screenshots of the alleged passenger’s post started being shared widely on micro-blogging site Weibo.

The post showed the woman making a V sign with her fingers – a popular pose in China – with the photo captioned: “Thanks to the captain. So happy.”

The woman is rumoured to be a flight attendant in training at a Guilin university, according to news site ‘Chinese News Service’.

Air Guilin did not specify if the photo was taken mid-flight, but Chinese pilots and analysts said the photo appears to have been taken during the flight.

The pilot, who was not named, has been banned from flying for life, though it is unclear if he was fired from all roles by the airline.

Air Guilin said in a statement that he had “violated [regulations] by allowing irrelevant personnel into the cockpit”.

According to the Civil Aviation Administration of China, passengers are not allowed to enter the cockpit without special approval or under “necessary” circumstances.

Other staff members involved in the incident have also been “suspended indefinitely” while further investigations are held.

“Passengers’ safety is always Air Guilin’s priority. We take a zero-tolerance approach against any inappropriate and unprofessional behaviour that might risk the aviation safety,” the Chinese carrier said.

Last year, Chinese carrier Donghai Airlines suspended a pilot for six months and revoked his qualifications as a flight instructor after he allowed his wife to go inside the cockpit.

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Aviation

Plane makes emergency landing on beach

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Plane makes emergency landing on beach

A small plane was forced to make an emergency landing on a Long Island beach Monday after experiencing engine problems, the Federal Aviation Administration said.

The single-engine Cessna 150L touched down about 2:20 p.m. at Point Lookout in Hempstead — about nine miles east of John F. Kennedy International Airport, officials said.

Two people were on board the craft. There were no reports of any injuries, reports New York Post.

The plane had taken off from Stevensville airport in Maryland and was en route to Long Island MacArthur Airport in Islip when it was forced to land, records show.

According to FAA records the plane is registered in Ronkonkoma.

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Aviation

Plane makes emergency landing on beach

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Plane makes emergency landing on beach

A small plane was forced to make an emergency landing on a Long Island beach Monday after experiencing engine problems, the Federal Aviation Administration said.

The single-engine Cessna 150L touched down about 2:20 p.m. at Point Lookout in Hempstead — about nine miles east of John F. Kennedy International Airport, officials said.

Two people were on board the craft. There were no reports of any injuries, reports New York Post.

The plane had taken off from Stevensville airport in Maryland and was en route to Long Island MacArthur Airport in Islip when it was forced to land, records show.

According to FAA records the plane is registered in Ronkonkoma.

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Aviation

Qantas, Southwest stepping up checks for cracks in 737 NG aircraft after issues found

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Qantas, Southwest stepping up checks for cracks in 737 NG aircraft after issues found

Qantas Airways Ltd (QAN.AX) and Southwest Airlines Co (LUV.N) are stepping up checks for structural cracks on Boeing Co (BA.N) 737 NGs after discovering problems with planes that did not require urgent inspections, airline sources said.

The cracks are on what is known as the “pickle fork” – a part that attaches the plane’s fuselage, or body, to the wing structure.

Repairing the cracks requires grounding the airplane, with remedial work costing an estimated $275,000 per aircraft, according to aviation consultancy IBA.

Boeing on October 11 said 38 planes worldwide had been grounded after urgent checks but has not provided a further update. The issue surfaced while the newer 737 MAX model is grounded globally following two deadly crashes, reports Reuters.

The U.S. Federal Aviation Administration (FAA) on October 2 mandated checks of 737 NGs with more than 30,000 take-off and landing cycles within seven days.

It said jets with 22,600 to 29,999 cycles must be inspected within 1,000 cycles, which typically correspond to the number of flights.

Qantas discovered cracks in a plane with about 26,700 cycles that was undergoing heavy maintenance, while Southwest found cracks in one with about 28,500 cycles, sources with knowledge of the matter told Reuters on condition of anonymity.

A Qantas spokesman said the airline had found cracking in one jet with just under 27,000 cycles that had been removed from service for repair.

He said that no Qantas jets had yet reached 30,000 cycles, but that the airline would inspect 33 planes with more than 22,600 cycles by the end of this week.

A Southwest spokesman said he could not confirm the number of cycles of the three jets the airline has pulled from service for pickle fork repairs. He said the company has complied with the FAA directive on inspections but was expanding checks to its entire 737 NG fleet.

In a filing with the Securities and Exchange Commission last week, Boeing said all 737 NGs with more than 30,000 flight cycles and about one-third of planes with over 22,600 flight cycles had been inspected for pickle fork cracks.

The manufacturer said additional assessments were underway to determine the cause and potential implications for planes with fewer than 22,600 cycles.

“Depending on the results of these assessments, additional inspections or repairs may be required,” Boeing said.

It said that so far the repair costs were not big enough to affect its bottom line. But the company added that it could not estimate potential future financial impacts because since the inspections were ongoing.

A Boeing spokesman on Wednesday said he could not provide a further update.

American Airlines and United Airlines, whose 737 NG fleets have less than 30,000 cycles, are also inspecting their entire fleets but have not found any pickle fork issues so far, representatives for both airlines said.

Virgin Australia said it had already inspected all 19 of its 737 NGs with more than 22,600 cycles and did not find any cracks.

South Korea’s transport ministry said all nine 737 NGs grounded in the country with cracks had more than 30,000 cycles.

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Aviation

Airbus cuts delivery goal on Hamburg plant snags

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Airbus cuts delivery goal on Hamburg plant snags

Airbus (AIR.PA) cut its full-year delivery goal for commercial jets on Wednesday, as the planemaker struggles with production delays at a newly expanded German plant.

Europe’s largest aerospace group expects to deliver “around 860” airliners in 2019 instead of the 880-890 previously targeted, the company said as it posted 1.6 billion euros ($1.78 billion) in adjusted operating income for the third quarter, reports Reuters.

The revised delivery numbers and outlook “reflect the underlying actions to secure a more efficient delivery flow in the next years”, Chief Executive Guillaume Faury said in the company statement.

The adjusted operating profit figure rose 2% year-on-year as revenue fell 1% to 15.3 billion euros for July-September and net income rose 3% to 989 million euros. The group also trimmed its 2019 free cash flow goal to reflect the revised delivery outlook.

Airbus has been wrestling with delays to its A321 jets at its plant in Hamburg, Germany for around two years, and a top leasing industry executive said earlier on Wednesday that the situation showed no sign of improving.

John Plueger, chief executive of Air Lease Corp (AL.N), told the Airfinance Journal Asia Pacific 2019 conference that problems at the Hamburg plant were “getting worse, not better”.

Asked about Plueger’s comments, an Airbus spokesman said: “We are agreeing next deliveries with our customers.” The discussions with customers were confidential, he added.

To reach its revised 2019 goal, Airbus must still hand over 289 planes in the final quarter, a little short of its record 297 deliveries in the same period last year.

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Aviation

Airbus cuts delivery goal on Hamburg plant snags

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Airbus cuts delivery goal on Hamburg plant snags

Airbus (AIR.PA) cut its full-year delivery goal for commercial jets on Wednesday, as the planemaker struggles with production delays at a newly expanded German plant.

Europe’s largest aerospace group expects to deliver “around 860” airliners in 2019 instead of the 880-890 previously targeted, the company said as it posted 1.6 billion euros ($1.78 billion) in adjusted operating income for the third quarter, reports Reuters.

The revised delivery numbers and outlook “reflect the underlying actions to secure a more efficient delivery flow in the next years”, Chief Executive Guillaume Faury said in the company statement.

The adjusted operating profit figure rose 2% year-on-year as revenue fell 1% to 15.3 billion euros for July-September and net income rose 3% to 989 million euros. The group also trimmed its 2019 free cash flow goal to reflect the revised delivery outlook.

Airbus has been wrestling with delays to its A321 jets at its plant in Hamburg, Germany for around two years, and a top leasing industry executive said earlier on Wednesday that the situation showed no sign of improving.

John Plueger, chief executive of Air Lease Corp (AL.N), told the Airfinance Journal Asia Pacific 2019 conference that problems at the Hamburg plant were “getting worse, not better”.

Asked about Plueger’s comments, an Airbus spokesman said: “We are agreeing next deliveries with our customers.” The discussions with customers were confidential, he added.

To reach its revised 2019 goal, Airbus must still hand over 289 planes in the final quarter, a little short of its record 297 deliveries in the same period last year.

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Aviation

A year on from Lion Air crash, Indonesians pray, scatter petals for victims

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A year on from Lion Air crash, Indonesians pray, scatter petals for victims

One year after a Lion Air plane crash that killed 189, relatives and friends of victims held prayer vigils and cast flower petals into the Java Sea at the site where the budget carrier’s Boeing 737 MAX jet went down beneath the waves.

The almost new Boeing Co aircraft had been flying from the Indonesian capital of Jakarta to the town of Pangkal Pinang, on the Bangka-Belitung islands off Sumatra, when it crashed within minutes of take-off.

“This cannot be forgotten because it was such a tragic and unbelievable event,” said Epi Samsul Komar, whose 24-year-old son, Muhammad Rafi Andrian, was on the doomed flight, JT610.”Hopefully this flower-scattering ceremony can heal our longing for our child,” Komar told Reuters.

He was among the families of victims who went by boat to the crash site off the West Java district of Karawang to throw petals into the sea, a tribute they also performed last November 8.

Tuesday’s event came days after Indonesian investigators issued their final report on the disaster, setting out Boeing’s failure to identify risks in the design of cockpit software and recommending better training for Lion Air’s pilots.

The fatal crash, followed within five months by another at Ethiopian Airlines, led to a global grounding of the Boeing 737 MAX and a crisis for the world’s biggest planemaker.

Stan Deal, newly appointed President and Chief Executive of Boeing Commercial Airplanes, attended the ceremony in Jakarta, at which he told Reuters he was there to pay his respects.

Deal’s predecessor, Kevin McAllister, was ousted by Boeing last week, the first high-level departure since the two crashes.

In the town of Pangkal Pinang, tax office employees held special prayers for seven colleagues killed in the crash, the office head, Krisna Wiryawan, said.

A tribute video featured photographs of the victims in happier times.

“When the loved ones are gone, only memories remain,” read a message near the end of the video. “These memories will remain in our hearts.”

Indonesian regulators criticized the design of the 737 MAX’s anti-stall system, known as MCAS, which automatically pushed the plane’s nose down, leaving pilots fighting for control.

Investigators attributed the Lion Air crash to a number of factors, including design flaws and inadequate regulatory oversight, as well as errors by Lion Air pilots and engineers.

Lion Air was “always improving upon pilot skills and maintenance because it’s a never ending job in the airline industry,” Chief Executive Edward Sirait told reporters at Tuesday’s event.

Boeing ran a statement in Indonesian newspapers in which its president and chief executive, Dennis Muilenburg, said, “We are deeply sorry and grieve for the loss of life.”

“May God rest their souls in peace, provide strength to their families, and keep their memories alive,” he said.

Muilenburg also visited the Indonesian embassy in Washington to offer condolences a day before he is due to testify before the U.S. senate on Tuesday.

Indonesian Finance Minister Sri Mulyani Indrawati said she hoped victims’ relatives would receive proper compensation.

Boeing settled first claims with family members’ representatives in September. Three people familiar with the matter said family members are set to receive at least $1.2 million each.

That figure is compensation for a single victim without any dependents, the sources said, speaking on condition of anonymity because negotiations were confidential.

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