Nigeria's Aviation New Headlines for Monday December 19, 2016
It is a
few days to Christmas and airports across the world are bound to witness huge
passenger traffic as people travel to various destinations to celebrate with
loved ones.
However, Nigerian airlines and their
passengers are not finding things easy. Airlines are willing to fly and some of
them have even introduced additional flights to key domestic destinations for the convenience of air travelers but their major headache now is the
scarcity of aviation fuel.
Please
find the headlines below and follow the links to read the stories in
full.
Passengers Groan as Airlines Cancel Flights over Fuel Scarcity
Air passengers were yesterday stranded at airports across the country as domestic airlines ran short of aviation fuel to carry out scheduled flight operations.
While most of the passengers were delayed for several hours before takeoff in Lagos, others in Port Harcourt, Abuja were not so lucky as their flights were cancelled after delays.
The development has, however, left some passengers with no choice than to travel by road, while calling on the authorities to address aviation fuel scarcity.
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| Nigeria,s Minister of State for Aviation ;Senator Hadi Sirika |
- Audits, clears Arik
The Nigerian Civil Aviation Authority (NCAA) has warned all industry stakeholders to avoid anti-competitive practices in the aviation sector.
The aviation regulatory body expressed concern over recent cases of what it described as disinformation prevalent in the industry.
The agency further noted that it is unfathomable that some questionable sources have been posting and circulating some cruelly fictitious stories about some airlines – insinuating a crash or claiming a particular carrier does not possess aircraft spares to sustain a safe operation.
Spokesman for the NCAA, Sam Adurogboye, in a statement disclosed that the authority only recently carried out a safety audit on Arik Air and there were no issue of safety concern found. Such reports should therefore be discountenanced.
“All those involved in this nefarious activity should promptly desist from this course of action as the consequences are seriously detrimental to the industry, particularly the confidence of the passengers.
“The Nigerian Civil Aviation Authority (NCAA) is well aware of the high volume of passenger movement within the country and from the diaspora during the yuletide season,”
How Forex Scarcity Threatens Airlines’ Insurance Payment
A fresh crisis is brewing in Nigeria’s domestic airline industry as operators say the scarcity or high cost of foreign exchange (forex) is frustrating efforts to pay insurance premium on aircraft used in the country.Lloyd’s of London, the world’s leading insurance market, has also issued a warning to Nigerian airline operators saying it might be forced to blacklist the country in the face of continued failure of some operators to fulfill their obligations of paying their premiums to the insurer regularly. Insurance cover is a mandatory requirement by the Nigerian Civil Aviation Authority (NCAA) for all airline operators in the country which must include the aircraft, passengers and other third party liabilities in case of an air crash.
The root of the crisis
Most airlines in Nigeria charge passenger fares in naira (the local currency). However, the inability of the local insurance and re-insurance industry to fully handle in the past, huge risks associated with air crashes given their low capitalisation which mars the speedily payment of compensation or indemnity to airlines and victims, has forced most Nigerian airlines into getting their aircraft insured abroad, especially with Llyod of London.
Most airlines in Nigeria charge passenger fares in naira (the local currency). However, the inability of the local insurance and re-insurance industry to fully handle in the past, huge risks associated with air crashes given their low capitalisation which mars the speedily payment of compensation or indemnity to airlines and victims, has forced most Nigerian airlines into getting their aircraft insured abroad, especially with Llyod of London.
Danger in Sky as Domestic Airlines Fly on Broken wings
…How to avert looming disaster
When Aero Contractors, one of the leading airlines on domestic routes, vacated the Nigerian skies on September 1, 2016, many were shocked because the death of the foremost airline, aside throwing about 1,300 workers into the job market, also exposed parlous state of the surviving local carriers on which experts have warned that they are close to extinction.
Daily Sun checks reveal that about N1 trillion debt is strangulating the domestic airlines, and with the Naira oscillating between N395 and over N400 to the dollar, analysts say they are living on borrowed time, as they precariously fly through their worst business climate in the history of civil aviation in Nigeria. This is because 90 per cent of their operations, especially the costly but mandatory ones like crew training, overseas maintenance and spares, require huge foreign exchange, now tough to source.
However, passenger and cargo tickets are sold in naira; which means they need so much naira to buy expensive dollars at the black market rate to operate. The average ticket for a an hour flight today is N23,000 (about $60) but a C-check (aside other minor checks) for a B737-500 (the popular aircraft in Nigeria) costs up to $800,000. More so, a litre of Jet A1 (which gulps over 60 per cent of their operational budget) goes for as high as N325, especially in northern airports and a B737-500 has capacity for about 40,000 litres, which cannot do more than seven hours service. Worse still, any attempt to jack up fares may lead to market resistance because recession has weakened the purchasing power of air travellers such that a good number of them now travel by road.
Daily Sun checks reveal that about N1 trillion debt is strangulating the domestic airlines, and with the Naira oscillating between N395 and over N400 to the dollar, analysts say they are living on borrowed time, as they precariously fly through their worst business climate in the history of civil aviation in Nigeria. This is because 90 per cent of their operations, especially the costly but mandatory ones like crew training, overseas maintenance and spares, require huge foreign exchange, now tough to source.
However, passenger and cargo tickets are sold in naira; which means they need so much naira to buy expensive dollars at the black market rate to operate. The average ticket for a an hour flight today is N23,000 (about $60) but a C-check (aside other minor checks) for a B737-500 (the popular aircraft in Nigeria) costs up to $800,000. More so, a litre of Jet A1 (which gulps over 60 per cent of their operational budget) goes for as high as N325, especially in northern airports and a B737-500 has capacity for about 40,000 litres, which cannot do more than seven hours service. Worse still, any attempt to jack up fares may lead to market resistance because recession has weakened the purchasing power of air travellers such that a good number of them now travel by road.
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