Saving Nigeria’s aviation sector

 

Within a 7-year period, 6 airlines have varnished from Nigerian air space as only 7 airlines are currently operating in the  Nigeria compared to the 13 airlines that operated 7 years ago.  Worse is massive drop in the number of aircraft from 92 to 42.

These patterns do not exist in a vacuum as experts in the industry have likened the challenges of operating in the country to high interest rates, poor infrastructure, unstable foreign exchange double taxation, instability of the naira, costly overseas aircraft maintenance and high cost of aircraft spare parts.

Active airlines such as Virgin Nigeria Airways, Chanchangi, United airways, Discovery Air, ADC have all exited the country leaving behind their competitors like Arik Air, Air Peace, Overland Airways, Medview Airline, Aero Contractors, First Nation Airways and Azman Airline operating.

A cursory look reveals similar patterns among airlines that has left the country or shut down. Starting with privately owned Chanchangi Airlines Nigeria –who won the Federal Airports Authority of Nigeria (FAAN) and Corporate Merit Awards for Best Domestic Airline of the Year in 1998, 1999 and 2000— struggled with a backlog of debt that eventually put it out of business after Ethiopian airlines gave the airline a one-month ultimatum to pay off its maintenance fee debt of $772,346.45.

For United Airways, its challenges revolved around Nigeria’s flailing economy.  During the period of the airlines exit, Nigeria plunged into recession and like other airlines that left in 2016, United Airways blamed cost of operations rising higher than its revenue for its decision to leave.

While observing the trends, the President of Aviation Round Table (ART), Gabriel Gbenga Olowo opined that the airlines are weak and threatened by extinction because they are insolvent.

At first the challenges begin with owing huge debts to fuellers, workers, government and trade partners to cutting down manpower, gradually it evolves to reducing number of aircraft and finally ends with leaving the country for good.

Proffering solutions, Olowo suggested that for Nigerian airlines to thrive and operate profitably for the long term they must come together and pull their resources together in order to have economy of scale.

“Airline operator that has five to 10 aircraft in its fleet cannot be described as a strong global player. Moving from two aircraft airlines to five aircraft airlines will be scratching the problem on the surface. There should regulation which will encourage pooling of aircraft and resources, harmonized schedule, eliminate current unhealthy price war, avail more destinations with enhanced schedule and ample down time for maintenance,” he suggested.

Every challenge has a solution and in the case of airlines operating in Nigeria C.E.O Aero Contractors, Captain Ado Sanusi noted that some of the expenses of these airlines can be controlled. Since airlines operating in the country earn their revenues in Naira, he noted that maintenance can be done locally to reduce the huge cost of oversea maintenance especially with the dwindling exchange.