Monday, 5 September 2016

Nigeria’s Aviation News Headlines for Monday September, 5 2016


Two domestic airlines last week suspended flight operations for various reasons ranging from harsh impact of the prevailing state of the Nigerian economy to lack of equipment to operate scheduled flights. 
The good news is that the Federal Government of Nigeria through the minister of state for Aviation Senator Hadi Sirika has promised to address the issue of Aero Contractors to ensure that both the airline and its workers resume normal services.
Also, the management of First Nation Airways has announced that once they are done with the maintenance of their aircraft, the airline will return to the airspace on or before September 15, 2016. So, there is hope for Nigerian Aviation.
Enjoy the headlines and follow the links to read the stories in full.

How Aero Contractors, First Nation Airlines Flew into Insolvency

The bell tolls for the Nigerian economy as the government and its private sector battle a humongous recession considered the worst in 29 years threatens to wipe off millions of jobs in critical sectors. 

As at last weekend, the ominous economic headwind had taken its first casualties in the aviation industry when two prominent indigenous airlines, Aero Contractors and First Nation, announced the suspension of scheduled flight operations, thus throwing over 2500 Nigerians into the labour market. And if the recent statistics released by the National Bureau of Statistics is anything to go by, it then means that close to five million Nigerians have lost their jobs in the last one year.  


That however, may not be the end of the story as many more jobs are on the line as the crisis bites harder in various sectors. Aero Contractors and First Nation announced the suspension of scheduled commercial flight operations citing a harsh operating environment which included the high cost of aviation fuel and acute shortage of foreign exchange to carry out routine maintenance of their aircraft overseas. 

“The operating environment within and outside the airline have hindered any possible progress especially in the last six months when the naira depreciated against the dollar thus making it impossible for the airline to achieve its operational targets,” said Aero.

 Economic Downturn Takes Toll on Aviation Industry

First Nation-Plane on the tarmac

The economic downturn in Nigeria is threatening the operations of domestic airlines as two of them have suspended scheduled service. Chinedu Eze of Thisday x-rays the challenges facing the aviation industry
There are four key factors threatening Nigeria’s airline industry. One is that everything about aircraft maintenance, including repairs and most often technical personnel is imported and C-check is done overseas. So in a recession whereby over N400 is exchanging for $1, it is difficult for Nigerian airlines that sell tickets in naira to raise enough funds to maintain their aircraft.
Two, over 40 per cent of operational cost is spent on aviation fuel. Today that product sells at N230 per litre because it is imported. Nigeria has refineries that are not working. They were not privatised and under the Nigeria National Petroleum Corporation (NNPC) they have not been put to good use for years, so Nigeria imports its fuel products.
Three, airfares do not reflect the actual cost of operation because of the low disposable income of Nigerian citizens. At the current cost of aviation fuel and maintenance, for a Nigerian airline to make profit it should charge about N45, 000 for one-hour flight, according to aviation analysts. This amount will seem outrageous but that is the actual pricing that could generate profitable revenue for airlines.

FAAN Seeks more Private Sector Investments to Boost Airport Projects

…As aviation contributes $1bn to economy

The Federal Airports Authority of Nigeria (FAAN)  is seeking private sector funding in its efforts to boost the state of infrastructure in some of the nation’s airports.
Some of the new infrastructure which FAAN said it needed the private sector participation includes  the construction and management of hangar facilities and well as fixed base operations (FBOs); construction and management of hospitality facilities, including but not limited to hotels; construction and management of automated car parks; development of terminal buildings; construction of runways, taxiways and aprons; construction and management of helipads; and construction and management of independent power plants (IPPs) and aviation fuel depot facility. FAAN is also demanding that the private sector partner with it in the construction and management of cargo air services for perishable agricultural produce.
Managing Director/CEO of FAAN, Mr. Saleh Dunoma, who stated this at the weekend said the aviation industry contributes over $1 billion to the Nigerian economy annually and was supporting more than 150, 000 jobs in Nigeria, thus creating immense business opportunities for both local and foreign investors.

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