Dana grounding, Aero flight suspension limit travel choices

  • Demand to outstrip supply
  • Existing carriers grab chance to raise fares
The voluntary suspension of Aero Contractors’ scheduled operations coupled with the Nigerian Civil Aviation Authority (NCAA)-induced grounding of Dana Airlines operations and suspension of its licenses have changed the travel dynamics in the country’s aviation industry and may have limited choices for air travelers.

Two events that took place in quick succession last week raised concerns over the state of Nigerian carriers.

There are indications that virtually all the airlines are grappling with issues of high jet fuel costs, excessive taxes, tough operating environment, scarcity of foreign exchange, and the high cost of aircraft maintenance overseas among others.

Crowded Lagos airport

The grounding of Dana Airlines by the Nigerian Civil Aviation Authority (NCAA) over financial doubts about carrying out safe operations and the tough decision of Nigeria’s oldest airline, Aero Contractor to temporarily suspend its scheduled operations have shrunk the travel choices of many travelers.

The situation according to travel experts would be difficult for the existing carriers to fill the void temporarily caused by the inactivity of the two airlines that control about 45 percent of the domestic travel market.

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The situation has further created a shortage of aircraft that the carriers are all battling to overcome as many of them still have their aircraft stuck in many maintenance facilities overseas and may not be coming back soon.

Many carriers had cut capacity by over 50 percent of their pre-COVID- 19 operations with many of them having their planes stuck overseas because of a lack of foreign exchange to bring them back to service.

Capacity cuts meant that the carriers reduce their workforce with many furloughing workers while others clandestinely asked workers to go home.

The number of aircraft flying in the country is reducing while the number of passengers is increasing describing the purported rise in fares as the normal principle of the economics of demand and supply.

The fare increase, according to an expert, is subject to many variables, which include the high cost of aviation fuel, otherwise known as Jet A1, and high taxes by different aviation agencies, among others brought about by the shrinking operating airlines and the inability of others to scale up operations.

For those in operation, insufficient aircraft has further compounded the situation; most of the reasons for delays passengers go through at the airports.

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Aside from popular destinations like Abuja, Lagos, Port Harcourt, Enugu, and Owerri, many other routes that were hitherto serviced by airlines have been jettisoned, forcing people to make the tortuous journeys by road to their destinations.

Those that dare to go to such destinations operate there twice or thrice weekly and this makes air travel cumbersome. Arik, Overland, Air Peace, United Nigeria Airlines, Max Air, Ibom Air, and Azman are the carriers in operation for now.

Cumulatively, scheduled airlines in Nigeria have less than 40 airplanes in service, underscoring the shortage of equipment for a market of over 180 million people.

The wrong use of equipment has equally affected many carriers who have their aircraft grounded because of the huge costs of maintaining their Boeing airplanes.

With the skyrocketing cost of aviation fuel, airlines are said to be spending more money on operation costs and may not save money to pay for high maintenance checks, like C-Checks, which could cost as much as $600,000 or more.

So, when their aircraft are due for a check, they ground it as Aircraft on Ground (AOG). The situation is made worse by the high exchange rate and the inability of the airlines to access foreign currency despite the Central Bank of Nigeria (CBN)’s extension of an easier forex window for the airlines.

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According to industry insiders, Nigerian airlines have lost about 40 percent of their fleet since early last year and the number of aircraft on AOG may continue to increase as airlines find it increasingly difficult to access forex and their finances continue to deplete.

Some existing Nigerian airlines

President of Aviation Round Table (ART), Gbenga Olowo, observed recently that there has been continuous depletion of Nigerian airlines’ fleet.

He recalled that in 2010, Nigerian airlines had 54 commercial operating aircraft, but by 2013, the fleet had reduced to 35, noting that with declining fleet size, route expansion would be impossible, robust schedule very difficult and downtime for maintenance would impact negatively on schedule.

Wole Shadare