‘Only Two Operating Airlines May Survive Till End of 2017’

Chinedu Eze

Airline operators have estimated that there is about 30 percent reduction of passenger traffic in the domestic market despite the fact that few airlines are still in operation. They concluded that if no action was taken to save the airlines, only two may survive by end of next year.

The operators also said that with the passenger reduction, the high cost of aviation fuel and scarcity of FX which hinder the ability of the airlines to buy and import aircraft parts, “it has become inevitable that some of the few airlines which still operate today may go under before the end of next year.”

One of the operators who is a Chief Operating Officer of one of the domestic carriers, told THISDAY on Tuesday that the situation was exacerbated by the fact that bankers are not extending credit to the airlines and that it is becoming increasingly more difficult to access FX despite the inclusion of airlines in the Central Bank of Nigeria (CBN) forex window along with manufacturers.

The top airline official said: “At the moment, our airline has lost about 25 percent of the market, although there is passenger surge sometimes but that may be because some other airlines stopped operation or that one airline could not operate on that day.

“The major problem is the high cost of Jet A1. The marketers have been warning us and telling us about low stock, which means very soon the product may become scarce again,” the official said.

He noted that it is true that CBN added the airlines in the forex access window “but they said that we would benefit from this in the next two months but we need the money now. We had a meeting with the Nigeria Civil Aviation Authority (NCAA) and we deliberated on how we could carry out some of the maintenance locally as it is becoming increasingly difficult to ferry aircraft overseas for maintenance because of the FX problem, but we still need to buy and import spares. The truth is that people have stopped flying and this will get worse unless the economy improves, so I agree with the projection that some of the airlines will stop operation by end of next year; unless government takes immediate action to help the airlines,” the official also said.

THISDAY learnt on Monday that some airlines do not take their aircraft away for maintenance anymore; rather, they park it as Aircraft on Ground (AOG), hoping that they could have access to forex at a cheaper rate or they just leave the aircraft there “till things get better.”

“So with this situation, if an airline that has about seven aircraft leaves four of its aircraft on AOG and when the maintenance dates of the rest approached what do you think he will do? He will also abandon all of them. That was what happened to Discovery Air and we all know what is happening at Aero,” a source told THISDAY.

At the recent public hearing on aviation organised by House Committee on Aviation, the Managing Director of Chanchangi Airlines, which stopped operation in 2013, Trevor Worthington said the airline stopped service because of hostile government policies and identified the problems hindering successful operation of domestic airlines to include low utilization of aircraft, “in other parts of the world aircraft fly up to 22 hours a day but in Nigeria you hardly fly up to 12 hours.”

He also identified multiple taxation, high cost of aviation fuel and the generous extension of multiple designations into the country to foreign airlines by government, which he said withdraws opportunities for code-share between Nigerian airlines and foreign carriers.

“Too many airports attend to too many international airlines, so there is no need for code share. Government should make it compulsory that foreign airlines must codeshare with local airlines that have IATA Operating Safety Audit (IOSA). When Chanchangi was operating it lost nine engines to air strike and no compensation was paid to the airline,” he said.

Worthington noted that as long as government does not support and help Nigerian carriers they might not exist more that the well-known 10 years life span, which many domestic carriers exist before they go under.