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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