Major Ways the Nigerian System is Killing Domestic Carriers.

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I love Aviation and I know you do but the truth is that Aviation business and especially running an airline in Nigeria is not an easy task .Has anyone ever wondered why airlines like IRS, Albarka Air, Capital Airlines, Associated Airlines, Okada Air, Air Nigeria, Discovery Air and several others went down?
Sometimes I am tempted to compare airline business in Nigeria to chewing bitter cola! A child who has not tasted bitter cola always longs for it when he sees the way adults chew it. But once you allow that child to have a bite, that child will confirm the true taste of bitter-cola. What I am trying to say is that it is really tough running an airline in Nigeria. To an outsider, it looks glamorous and lucrative but if you read what owners of major domestic airlines are saying, you will grasp the realities. From Arik Air to Aero contractors, Medview, and Air Peace, the story is the same.

the defunct Virgin Nigeria's airplane. photo credit:google.com

 Among the issues crippling Nigerian airlines are weak Nigerian currency (naira) and high cost of foreign exchange. Aviation business is dollarized. You buy or lease aircraft in dollars, maintain them in dollars, buy spare parts in dollars and pay several other charges in dollars. So, tell me how domestic airlines in Nigeria will break even under the harsh economic reality and the current state of our very dear naira?

photo credit:

The issue of multiple charges is another killer of domestic carriers. Airlines across the world pay regular charges like take- off charges, landing charges and several other service surcharges but the situation of Nigerian airlines is compounded by the presence of multiple aviation agencies charging multiple fees and taxes. To be honest, no airline will find it easy to operate profitably under this atmosphere of multiple fees, charges and taxes.
   Also, sourcing aviation fuel (Jet A1) has become a major headache to domestic airlines. Scarcity of the product is now the norm and when it is available, it is double the price. Foreign airlines have alternative as they can take roundtrip fuel from their base but Nigeria is the hub of Nigerian airlines! Going to Accra for instance to get fuel means increasing the already high cost of flight operations.

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Arik airplane.photo credit: www.arikair.com
  Another major problem is the cost of Insurance. Nigeria Carriers pay high premium to International Underwriters in dollars. The Executive Chairman of Airline Operators of Nigeria (AON) and the Chief Executive of Jed Air, Captain Nogie Meggison had at a time raised the alarm over insurance rip-off by National Insurance Commission (NAICOM) which serves as a middle man between Airline Operators and International Insurers. According to reports, each Nigerian airline paid between $300,000 and $400,000 annually as premium as at 2015. AON has been cited in reports as saying that Nigerian airlines engage the services of International Insurance companies because Insurance companies operating in Nigeria lack the capacity to handle aircraft insurance. For how long will this continue?
Government needs to begin to see the services offered by Nigeria Airlines as essential to growing the economy and therefore come up with policies that will promote the growth of these Carriers. The likes of Emirates, Etihad, Ethiopian Airlines, Kenya Airways, South African Airways and even Rwand Air would not have gotten to where they are today without the huge support of their various governments. Nigerian Government can do better!


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