Nigerian carriers profitable on paper, insolvent in reality-Aero MD

· Weak internal governance weakens airlines

The Managing Director of Aero Contractors, Capt. Ado Sanusi has pointed to weak internal governance and failures in corporate governance as a primary reason Nigerian airlines struggle to survive and attract investment.

He further stated that an airline cannot be sustainable if it is profitable on paper but insolvent in reality.

In his presentation at the African Travel Commission (ATC) meeting convened by the ATC Executive Director, Dr Lucky George, with the theme “Challenges Facing Local Airlines in Nigeria and Practical Pathways For Sustainable Growth,” held in Lagos over the weekend, he stated that airlines are complex, capital-intensive businesses.

Sanusi further explained that when governance structures are weak, boards lack aviation expertise, management decisions are short-term, or political and emotional considerations override commercial logic, airlines struggle to survive.

He said, “One of the most critical challenges facing airlines in Nigeria is weak internal governance. To survive, they need strong, independent boards, a clear separation between ownership and management, and professional decision-making anchored in data, safety, and long-term strategy. Without this, even well-funded airlines eventually fail.”

The Aero chief also argued that many domestic airlines are run as “one-man shows” rather than as structured corporate entities, noting that this lack of institutionalised management leads to poor decision-making, with business choices based on personal whims rather than data or long-term strategy.

This, he reiterated, had made international lessors and investors hesitant to work with Nigerian carriers because they lack the transparent governance structures required to ensure that leased assets or invested capital are managed properly.

He equally pointed out that when the founder of an airline is also the sole decision-maker, the airline’s survival becomes tied to that individual.

“Without a strong board of directors or independent oversight, these airlines often fail to outlive their founders or survive major economic shifts.

He described the industry as in a state of financial fragility, stressing that while external factors such as high fuel costs and forex scarcity are real, weak internal controls exacerbate these issues, leaving airlines with razor-thin margins and no buffer for crises.

Fuel inefficiency, poor fleet choices, weak maintenance planning, and overstaffing all erode margins, adding that in an environment like Nigeria, where margins are already thin, operational discipline is not optional; it is existential.

While airlines must take responsibility for internal weaknesses, Sanusi disclosed that external factors remain the single biggest threat to sustainability in Nigeria and much of Africa.

Sanusi doesn’t just blame the airlines; he views the governance problem as an ecosystem-wide issue. He has recently called for stricter economic regulation, arguing that the Nigerian Civil Aviation Authority (NCAA) focuses heavily on safety but neglects economic regulation, allowing airlines to continue operating even when their internal finances and governance are clearly failing.

For Sanusi, weak internal governance is a barrier to implementing the Cape Town Convention.

He believes that until Nigerian airlines demonstrate zero tolerance for governance failures and contract defaults, they will continue to pay higher interest rates (up to 30%) and struggle to lease modern aircraft compared to their global peers.

He emphasised that taxation and multiple charges are among the most damaging external pressures, lamenting that carriers face multiple charges across federal agencies.

These fees, he alleged, are not always transparently linked to service delivery. To him, the cost burden is passed on to passengers, reducing demand and making air travel less accessible to ordinary Africans.

“Aviation should be treated as a strategic economic enabler, not merely as a revenue collection target. Airlines plan decades ahead, but policies often change within months. Airlines sustainability in Nigeria and Africa requires responsibility”.