Nigeria’s Aviation News Headline for Friday November 4, 2016
Arik Identifies Challenges of Air Transport, Marks 10th Anniversary
Nigeria’s major carrier, Arik Air has
said high cost and scarcity of aviation fuel, inability to access FX are
the major setbacks to its operation in Nigeria as it turned 10 years.
The Managing Director of the airline,
Chris Ndulue explained that its daily demand of aviation fuel, known as
Jet A1 is about 500, 000 litres and this is difficult to source due to
the fact that the product is imported and urged government to do
whatever is possible to refine the product locally.
Ndulue said the high demand for the
dollar by the aviation industry is partly because aviation fuel is
imported, adding that because Jet A1 contributes about 40 percent of the
cost of airline operation, when the product is refined locally it would
reduce the pressure on dollar demand and also reduce the cost of
operation.
“Last one year has been challenging for
the airline industry and for the nation’s economy. But it is more
pervasive in the aviation industry because it is dollar dependent. 40
percent of operation cost is spent on fuel because it is import
dependent and while the cost of fuel is low elsewhere because of the
general low price of oil in the world, it is high in Nigeria. We urge
government to do something about this,” Ndulue said.
He said that the airline intends to
expand its operation farther in West and Central Africa, in Asia,
including Middle East and South America, but noted that the airline is
cautious about expansion because of the recession, so it would approach
the programme cautiously.
‘Only Two Operating Airlines May Survive Till End of 2017’
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.
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