Nigeria’s aviation sector is at a very dangerous crossroads. What initially started with just a few challenges hindering operations in the industry has now ballooned into a full crisis. Now, the Nigerian airspace is about to be boycotted by major international airlines and Nigerians now have to pay more for tickets than they should ordinarily do as they now have to travel to neighbouring countries in order to catch up with major international flights.
It is sad to note that while the aviation sector is growing in other climes, the reverse has been the case in Nigeria as no fewer than 50 airlines are believed to have folded up in the country since independence. While most of these airlines were completely owned by Nigerians, others were co-owned with foreign partners and while just a few of these airlines operated for more than a year, some others simply brought in aircraft without ever conveying any passengers before packing up.
That is the sad trajectory of the aviation industry in Nigeria. The development is highly embarrassing to Nigerians who, unfortunately, are at the receiving end of some of the misfortunes that have befallen their once prosperous economy.
From the increase in the price of aviation fuel, which is crippling local airlines, to the lack of modern infrastructure in most of our airports, which hampers the operations of both local and foreign operators, the major challenge now is the inability of many foreign airlines to repatriate their funds from Nigeria due to forex challenges.
The local operators, acting under the aegis of Airline Operators of Nigeria (AON), had earlier raised the alarm, saying most of its members may fold up their operations due to the high cost of services. Citing challenges encountered on a daily basis as a result of the overbearing attitude and unnecessary charges imposed by government agencies, AON said its members have lost over $60 million to the cost of repairs of engines damaged by bird strikes with delays, cancellations and refunds also gulping a whopping N20 billion.
AON chairman, Onyeama Allen, who is also the Chairman of Air Peace, said: “Forex scarcity has hit us so badly and it has risen by 200 percent. What should we do? Over 50 airlines have closed shop in this country in less than 10 years. These are the reasons why some airlines have gone into extinction. We pay about 37 charges. Little wonder, no Nigerian airline is that strong.”
Responding in their own way to the challenges, local operators were forced to raise the cost of an average local flight (one-way) from N30, 000 in 2021 to the present charge of not less than N100,000. Some airlines that could not bear the harsh realities had to stop operations and more are bound to pack up with time.
The country’s airspace is not a bed of roses for foreign airlines either. Emirates Airline, penultimate week, dropped the bombshell, saying it would be stopping all flights to Nigeria by September 1, 2022 until further notice because of its inability to repatriate its funds from ticket sales trapped in the country due to forex challenges. The amount, according to Emirates, is about $85 million .
The global player in the aviation world had earlier limited the frequency of its flights to the country before slamming the latest hammer, which, according to an official statement, is to prevent further indebtedness occasioned by its trapped funds and the inability of the Federal Government to render any help.
The International Air Transport Association (IATA) last week put the total money of foreign airlines trapped in Nigeria at a whopping $464 million, a $14 million increase from the $450million recorded in May.
Expressing disappointment over the worrisome situation, IATA said it was ‘’disappointed that the amount of airline money blocked from repatriation by the Nigerian Government grew to $464 million in July,” stressing that its many warnings ‘’that failure to restore timely repatriation will hurt Nigeria with reduced air connectivity are proving true with the withdrawal of Emirates from the market.”
We want to agree with IATA that “Airlines can’t be expected to fly if they can’t realise revenue from ticket sales,’’ just as ‘’ Loss of connectivity harms the economy, hurts investor confidence, impacts jobs and people’s lives.”
We therefore plead with the Federal Government to save the situation and do the needful “before more damage is done.”
It is heartwarming, however, that the National Union of Air Transport Employees (NUATE) is lending its voice to the debate as it has advised the government to explore the possibility of crude oil swap to defray the backlog of the trapped funds which some even believe might have hit $600 million.
With the exit notice already served by Emirates, we want to believe that other leading airlines, such as British Airways, may also stop operations in Nigeria before the end of the year, if nothing is done to save the situation. The implications of the pull-out are very grave as it will lead to massive layoffs in the sector alongside other negative effects on the economy.
The $265 million released by the Central Bank of Nigeria (CBN) on Friday to the foreign airlines is a welcome development.
Nigerians have never had it so bad as they are having it now. We therefore call on the government to rise to the situation and save the aviation sector from total collapse. A stitch in time saves nine!
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