20th July, 2011
Nigeria’s aviation industry seems to be in deep financial crisis and a prompt intervention by the Federal Government is urgently needed if the sector must remain afloat.
Late last week, air fares again skyrocketed by about 20 percent on all local routes.
A Lagos-Abuja-bound flight for instance now goes for about N30,000 from N17,000 this time last year. Fare for the same route was about N20,000 weeks ago.
Most airlines are heavily indebted to banks, oil marketers and federal agencies and are struggling to stay afloat.
Some airlines are already closing shop, unable to keep up with their huge financial burden.
On Wednesday 13 July, an Arik Air plane was prevented from taking off in Senegal by the authorities there for owing them about N2 billion.
The Senegalese Directorate of Civil Aviation explained that the aircraft was seized because it had defaulted on earlier agreements to pay off landing fees accumulated for two years.
Last week as well Chanchangi airline suspended its operations to carry out some maintenance works on its two aircraft. The airline has not given a date when it will resume flying again.
Not long ago, the headquarters of Air Nigeria was shut for owing about N500 million to Lagos Inland Internal Revenue Service and on 25 May the airline did not fly for about eight hours as it struggled to pay for Jet A1, as aviation fuel is known.
Aero Contractors is said to owe Oceanic Bank huge debt and is also struggling to stay in business.
Other airlines are also in deep financial crisis and most are having a negative balance sheet.
The situation is do dire that Muhammed Tukur, Assistant General Secretary, Airline Operators of Nigeria, AON, recently warned that if the new minister of aviation, Princess Stella Adaeze Oduah, does not engineer a price fall of Jet A1, which is now sky high, many airlines will collapse within months.
The problems are diverse but in the short run, the losers are the passengers who have to pay more. But, in the long run, the losers will be the airlines, the oil marketers and the Nigerian economy. We believe that this must be avoided.
We call on the National Assembly, the Presidency, the Ministry of Aviation and other stakeholders to ensure that the industry survives and is strong.
A thriving aviation industry is good for Nigerian workers, travellers, Nigerians at large and the economy of Nigeria.
It requires a joint and urgent effort to rescue the industry from the present precipice to which it has descended.