Business

Nigerian Airlines Facing Existential Threat, Say Operators

Airline Operators of Nigeria (AON) has declared that they are facing existential threat because of the challenges they face, ranging from scarcity of foreign exchange, high price of aviation fuel and the difficulty in acquiring aircraft due to country risk.

The operators also pointed out that the aircraft that are due for maintenance have been grounded and cannot be ferried overseas because of the scarcity of forex.

According to them, there is continuous depletion of equipment without replenishment and warned that if this continues the country may not have operating aircraft for domestic services.

This was disclosed by the spokesman of Airline Operators of Nigeria (AON), Prof. Obiora Okonkwo, who said that airlines need urgent government intervention without which many airlines would go under, and the government would be their undertaker.

The airlines said the lack of stability in foreign exchange and the soaring price of aviation fuel, which is now N1,300 per litre, have eroded their ability to plan; created uncertainty and precariousness in their operations.

 Okonkwo, who is also the Chairman of United Nigeria Airlines, explained that travellers who bought forward tickets in 2023 when aviation fuel was N700 per litre and exchange rate was N800/$1 would be airlifted at the current price of aviation, N1,300 per litre and exchange rate of N1400/$1; so, the airlines are recording huge losses on those tickets.

“We are making losses on factors that are beyond our control. We are not only faced with the problem of scarcity of dollars; even the aviation ecosystem is feeling the heat.

“Handling companies have increased the cost of their services, airports have increased their charges and those that service the aircraft have also increased the cost of their services. The monies for these payments are coming from the passengers who are already exhausted financially,” he said.

 Okonkwo said that many businesses in Nigeria are making poor returns so those entrepreneurs who are the crux of passengers that travel during the high and low season are no more travelling and those who travel on tourism and social engagement are not enough to provide airlines good load factor to sustain their operations at the current low season.

“Passenger traffic has shrunk because even those on social engagement like weddings, burials and other ceremonies may not be inclined to spend money on flight tickets; they would rather send credit alert to those hosting the events who would appreciate such gestures. So, they pay instead of appearing in person,” he said.

Okonkwo said that the airlines want to engage with the government to see how the government can intervene to save the airlines, noting that presently, the government may not understand how perilous the situation is to airlines.

“Air travel is catalyst to economic development. There should have been government engagement with airlines at different levels. Airlines do not have special forex allocation; so, they buy at the same place traders who trade on Brazilian hair, textiles and others buy.

“Our passion to remain in this business is being eroded. We are at the point of oxygen supply. Some airlines are going into coma. Our equipment is diminishing. The minimal revenues we earn to keep the airlines flying, we convert to pay our lessors.

“It is impossible to bring in more aircraft. Aircraft owners have become sceptical because of country risk. A Nigerian airline may meet their terms, all the standard criteria but the aircraft owners consider country risk above other factors.

“Country risk supersedes everything and lessors have their own obligations. So, there is nothing personal. Some airlines deposited money with the Central Bank of Nigeria (CBN) but they cannot provide us the needed dollars,” Okonkwo said.

He also noted that there are fixed costs which airlines must pay whether they fly empty or with passengers.

He noted that even if an airline borrows money to support the current downturn, the interest rate is still at 26 per cent, reiterating that airlines need special allocation of dollars for them to survive because airlines need dollars to buy aircraft, maintain their fleet and order spares.

Chinedu Eze

Follow us on:

AriseNews

View Comments

  • car of your choice at a minimum price E-AUCTION E-AUCTION E-AUCTION E-AUCTION E-AUCTION Some Auction Vehicles/Cars For Sale
    Mama Africa #17,000 •Tomatoes Rice # *15,000* •Cap Rice #15,000 •My Food #17,000 •Mama Gold #17,500 •Ade Brazil #15,000 •Elephant Gold #15,000 •Royal Umbrella #15,000 Etc.
    Golf3= 500,000.
    Camry Tinny-Light=500,000.
    Tundra 1,300,000
    Toyota Exterra=850,000
    Toyota Camry big daddy=650,000
    Toyota Venza= 1.7million
    Toyota Avalon=850,000
    Toyota Rav4=950,000
    Toyota Prado=1.3million
    TOYOTA HILUX=2million
    Toyota Sienna=850,000
    TOYOTA 4-RUNNER=950,000
    Toyota Corolla=650,000
    Toyota Matrix= 700,000
    Toyota Highlander=950,000
    Toyota Picnic=500,000
    Tacoma 1.850,000
    Toyota Hiace Bus=950,000
    Toyota Tundra=1.5million
    Toyota Sequola=900,000
    BMW 5-series=1.960,000
    BMW 3-series=1.640,000
    BMW X6=2.670,000
    Ford Edge=700,000
    Ford Escape=600,000
    Honda Elantra=600,000
    Honda Baby-Boy=700,000
    Dyna Truck 900k
    TIPPER Head 6mill

    Honda Accord=550,000
    Honda CRV=650,000
    HONDA CIVIC=500,000
    HONDA EVIL-SPIRIT=750,000
    HONDA ODYSSEY=500,000
    Honda Pilot=850,000
    Nissan pathfinder=800,000
    Nissan Amanda=750,000
    Infinity=950,000
    Benz C250=N1.300,000
    Benz C300=1.6MILLION
    Benz ML350=2 million
    Benz ML300=1.5 million
    Benz ML550=2.6million
    Mercedes-Benz C-Class ₦1.3Million
    Mercedes-Benz E-Class ₦1.8Million
    Mercedes-Benz GLK ₦3.Million
    Es330 1.6
    Lexus C5 350=950,000
    IS250 1m
    Lexus Rx300=1.2 million
    Lexus Rx330=1.5 million
    Is350 2mill
    Gx470 1.8mill
    Lexus Rx350= 2 million
    ES350 2mill
    Land Rover Discovery ₦3.2Million
    Land Rover Freelander ₦3.6Million
    Land Range Rover Sport ₦4Million
    Acura MDX ₦1.8Million
    Pequot 206=350,000
    Pequot 406=470,000
    Pequot 607=650,000
    .....
    ((08166185400) (+234_915__6089_111)

Recent Posts

Peter Obi Says He Will Turn Night Vigils To Night Shifts + Minors Face Death Sentence – Trending With Ojy Okpe

https://www.youtube.com/watch?v=G8c8PG-x1gg The music producer and composer, Quincy Jones, who worked with Music Legends, including, the…

1 min ago

Prince William Arrives In South Africa For Earthshot Prize And Wildlife Summit

Prince William visits South Africa for Earthshot Prize, aiming to spotlight climate innovation and support…

32 mins ago

Abuja Court Issues Arrest Warrant for Dana Air MD Hathiramani Ranesh over Absence at Fraud Trial

A Federal High Court in Abuja has ordered the arrest of Dana Air MD Hathiramani…

45 mins ago

Equatorial Guinea Anti-Graft Chief Embroiled in Major Sex Scandal, Over 400 Tapes Found Involving Top Officials’ Families

A High-ranking Equatorial Guinean official is facing a major sex scandal with 400 explicit sex…

51 mins ago

Tinubu Orders Immediate Release Of All Minors Arrested In Connection To #EndBadGovernance Protest

Tinubu Orders Immediate Release Of All Minors Arrested In Connection To #EndBadGovernance Protest President Tinubu…

57 mins ago