Three airlines risk extinction in few weeks- Operators

  • AON lament high charges, taxes

 

 

The combination of the high cost of aviation fuel otherwise known as Jet A1, over 37 charges by various agencies in the aviation industry, scarcity of foreign exchange, and the harsh operating environment could lead to the collapse of three Nigerian airlines in the next few weeks according to the chairman of Air Peace, Mr. Allen Onyema.

Onyema however did not disclose the name of the three carriers that are on the verge of extinction as there are indications that many of the country’s airlines are ailing.

Despite the deregulation of the industry in the mid-1980s which opened the market to privately owned commercial airlines and over 40 years down the line there is still a vacuum, as domestic carriers have been unable to compete with their international counterparts.

This has created a lopsided situation whereby only foreign carriers airlift Nigerian passengers to international destinations and cart away their revenue in never-ending capital flight from the sector.

A visibly upset Onyema lamented that the average lifespan of Nigerian carriers is ten years and below, stressing that he was naïve before he set up his airline because of the advice he got from a consultant that the operation of one aircraft would guarantee the employment of 1000 people, stressing that he was of the opinion that with three airplanes, he would be able to employ 3000.

He regretted that that was not the case when he decided to set up Air Peace but later realized that the problems were deeper than he envisaged just like it is tough for other carriers around the globe.

 

Onyema who spoke on Wednesday at the ongoing FAAN National Aviation Conference (FNAC) in Abuja said the current fuel crisis will take away three existing carriers and frowned at multiple taxations which he noted were about the highest in Africa.

The last couple of years have been challenging for airlines across the world, and the present fuel prices haven’t made things any easier. However, some countries are feeling slightly more than others.

The harsh operating environment in Nigeria coupled with the current fuel crisis has brought the aviation sector in the country to its knees.

His words, “There are so many issues in the aviation industry. Issues like high taxes are making airlines to be profitable here. We pay excessive charges to Nigerian Airspace Management Agency (NAMA). Paying navigation charges is absurd for domestic operations. The mortality rate of airlines in Nigeria is alarming. Over 70 airlines have gone into extinction in the last few years”.

“The current fuel crisis will take away three airlines in the next weeks. How do we make money in a situation we pay salaries, and charges to different aviation agencies”

Onyema, however, said that the aviation fuel challenge was not limited to Nigeria alone, but emphasized that ours is made worse because of the slump of the naira against major currencies, especially the dollars.

According to Onyema who represented Airline Operators of Nigeria (AON) said in order to address the challenge, the Federal Government approved 10,000 metric tonnes of aviation fuel to the airlines but said the carriers were yet to access it.

He explained that the airlines hoped to start lifting the 10,000 metric tonnes of aviation fuel from today (Thursday).

”That is why we ran to the government and the Federal Government has given us about 10,000 metric tonnes of fuel at the cost of N580 per litre in Lagos and about N607 per litre outside Lagos.

Air Peace chairman, Mr. Allen Onyema

”This is not the only issue. Since the COVID-19 crisis, most airlines all over the world, including Nigeria have not recovered from COVID-19, except those whose countries have injected so many funds to assist them. This is nobody’s fault. It just happened. The government has tried its best by giving us this aviation fuel. This aviation fuel can take airlines out, not only in Nigeria but everywhere in the world.

”Some airlines outside Nigeria have closed down because of the effects of rising aviation fuel. If these things are not addressed in Nigeria, it can affect the bottom line of all airlines in Nigeria.

Wole Shadare