Amid 2022 Challenges, AON Recorded Boost in Capacity

Chinedu Eze

The Airline Operators of Nigeria (AON) in a review of 2022 said it witnessed a lot of challenges, ranging from high cost of aviation fuel, scarcity of the product, high exchange rate and paucity of dollars coupled with environmental challenges like bad weather that caused flight delay inadequate airport facilities, which encumbered facilitation.

The high cost of aviation fuel gave vent to high airfares and scarcity of forex hindered major maintenance of aircraft, which must have to be ferried overseas for checks. This reduced the number of operating aircraft and low capacity further led to increase in airfares, as fewer aircraft seats available could not meet the demand of air travellers.

Airline operators were aghast at sudden hike in aviation fuel, known as Jet A1 from the beginning of the year, the price of the product skyrocketed, prompted by high exchange rate and sometimes alleged artificial scarcity manipulation by the oil marketers, as middlemen usurped the position of major marketers and created a segment between the importers and the marketers, adding their avarice to the final cost of the product.

But despite these challenges, the airline operators provided elixir with the acquisition of more aircraft, which eased anxieties during the high Christmas season and somewhat, tamed the fares. With insecurity threatening every part of Nigeria, travelling by road became insipid, so those who could afford it travelled by air. The operators provided the needed capacity but with cutthroat lease terms to some airlines.

The airlines said they were spurred by the desire to provide service than to make profit and that was why they did everything possible to increase their fleet and meet the demand of Nigerians.

The Chairman of United Nigeria Airlines and spokesman of AON Professor Obiora Okonkwo observed in the interview he granted to TVC and monitored by THISDAY that last year, Nigeria’s aviation sector grappled with a lot of challenges ranging from hike in Jet A1 and airfare, regulatory, institutional and structural challenges. According to him, others include challenges of poor infrastructure, poor access to financial incentives, inability to repatriate funds, as well as underfunding of Nigeria’s aviation industry.

He said due to the challenges, some airlines, including domestic and international airlines were forced to limit their operations across the country.

Highlighting some of these key issues and policies that impacted the aviation sector last year and projections for 2023, Okonkwo said aviation fuel was a major issue because it was about this time last year (January) that the alarm was raised on the steady increase in price.

He said foreign exchange also played a very major role, as the sector was dealing with foreign exchange of about $500 to $1 at the parallel market and it was available even at the window early in the year.

But within a very short time it went to 600, 700, 800, going to 900 to 1000 per dollar, saying that it was a major challenge and then worst of all, it later became unavailable.

Okonkwo said: “These challenges were a big shock to the aviation industry in Nigeria, and it only took the grace of God for us to continue to breathe. There’s really no company in the world that would have survived such a combination. We faced the depreciation of the Naira locally. So that combination was actually very toxic and obviously the logistic challenges that we also noticed brought about scarcity.

He added that more importantly was the unpatriotic approach of the marketers, the vendors and all who were involved in that cycle of importation distribution up to the pump of the aircraft.

Okonkwo said that last year was not all bad because despite all those challenges towards the end of the year there was increased number of fleets, remarking that within the last two quarters of the year, there was influx of about 10 to 15 large body aircraft, including the one acquire by United Nigeria Airlines.

“Some of our colleagues, the operators had their challenges. Some of them had to take out time to reorganise themselves. Some of them had to get the hammer of the regulators. But in all, it is exciting and quite commending to say that operations have been very safe and it will continue to be safe because there is very high quality of regulation and operators are fully in compliance to what is required for safety”, he said

Speaking on the issue of federal government’s debt, Okonkwo said that government is indemnifying all their debts and all their borrowings and explained that most of domestic operators of the industry in Nigeria had made it the fastest growing aviation sector in the whole world.

“We have the highest recovery period after the COVID-19 all over the world, only second to Colombia with a small margin.There’s no aviation industry that has recovered in any part of the world after COVID-19 without any support from the government.It’s because of the operator’s persistence and devotion, and all these shocks certainly would have brought about a low passenger increase in operational cost, which if you had to apply directly would have brought the tickets to be between $200 and $250,000.

“But we knew already the impact that could bring down the national economy and already masses who have been suffering. So we’ve been absorbing a whole lot of that. Instead of commendation, were facing a threat of extinction.” Okonkwo added.

In 2022 there was no accident involving scheduled flight service and there was no very serious incident so in terms of safety, it was a good year for Nigeria’s aviation industry.