July 03, (THEWILL) – Nigeria has lost no fewer than 50 airlines, cutting across commercial, charter and cargo carriers in the last five decades. These airlines, most of which go under, usually close shop, within a spate of 10 years after commencing operations.
Existing Airlines
As of date, there are about 10 major airlines running commercial operations in the country. They include Air Peace, Aero Contractors, Arik Air, Dana Air, Azman, Max Air, Ibom Air, Overland, United Nigeria Airlines, Green Africa. Seven of these carriers have crossed the 10-year ceiling, a period whereby most of the airlines usually go under.
For instance, 63-year old Aero Contractors, which was established in 1959, is still flying. Also Overland, Arik Air, Dana Air, Max Air and Azman, also established in 2002, 2004, 2008, 2008 and 2010, respectively, are still in the skies. Others are Ibom Air, Green Africa, United Nigeria Airlines, which were established a few years ago.
However, aviation experts have expressed worry over the development in the aviation industry; which they said signalled a bleak future for the industry in Nigeria. In what looked like the last traces of airlines” closure, First Nation which started operations in 2011 suddenly ceased operations in 2018, seven years after.
Most recent is that of Medview Airlines which commenced operations in 2007. The airline laid off 90% of its employees between November 2017 and June, 2018. It finally suspended international flight operations in April 2018. As of August, 2019 Medview shutdown all operations, just as the company promised to bounce back soon.
Catalogue of Moribund Airlines
In the last 50 years, quite a number of airlines have operated in the country, some of which are no longer operational. Some of these moribund airlines include: Nigeria Airways which commenced operations in 1971 but later ceased operations in 2003. African International Airways which commenced operations in 1971 also shut down in 1972; ADC Airline was founded in 1984 and ceased operations in 2006.
Two major airlines, Bellview Airlines and Chanchangi, ceased operations in 2010 and 2017, respectively. Both started in 1992 and 1994.
Okada Air commenced operations in 1982 and ceased operations in 2002, while Sosoliso Airlines started in 1994 and stopped operating in 2006.
Others are Capital Airlines, Central Airlines, African Trans Air, Afrijet Airlines, Afrimex, Air Atlantic Cargo, Air Nigeria, Albarka Air, Al-Dawood Air, Amed Air, Amako Air, Arax Airlines, Axiom Air, Barnax Air, Capital Airline, Central Airlines, Chrome Air Service, Dasab Airlines, Earth Airlines and EAS Airlines, among others.
The rest are Flash Airlines, Freedom Air Services, Fresh Air, GAS Air Nigeria, Hamsal Air, Hamzair, Harco Air Services, IAT Cargo, Intercontinental Airlines, Kabo Air, Mangal Airlines, Meridian Airlines, etc.
Stakeholders’ Views
Stakeholders attribute the closure of airlines to lack of government support, high cost of JetA1, multiple taxation, forex issues, lack of corporate governance, infrastructure deficit, harsh operating business environment, multiple Designations granted foreign airlines amongst others.
To others, aviation is seen as an industry that is over-regulated, a situation that puts the operators in tight corners.
On the aspect of regulation, the Director General of the Nigerian Civil Aviation Authority (NCAA), Capt Musa Nuhu has repeatedly emphasised that as a regulator, the agency will continue to do its best to see that the airlines are regulated accordingly, and not just out of business.
According to Nuhu, Nigerian Civil Aviation Authority will not compromise in the enforcement of safety standards, regulatory requirements and SARPs in conformity with all regulatory requirements and ICAO’s Standards and Recommended Practices (SARPs) in the initial issuance and renewal of all Air Operators Certificate (AOC) irrespective of the personality or and organization involved. NCAA will continue to operate within its mandate to the safe, secure and efficiency of the industry as enshrined in the 2006 Civil Aviation ACT”.
Suggesting why airlines close shop so rapidly in Nigeria, Secretary General of Association of Nigerian Aviation Professional (ANAP), Comrade Abdulrasaq Saidu pointed out that the major cause is lack of corporate governance on the part of the operators.
Comrade Saidu noted that most operators had greedy and selfish tendencies in trying to run their airlines.
“I blame the operators on one hand and government officials on the other hand. Most of the operators are selfish and greedy. So I can say everything boils down to corruption. The supervising Ministry, over the years, has not been able to checkmate the industry effectively, to end these cases of airlines, starting today, only to cease operation, a few years after.”
Three More Closures Imminent
Not too long ago, operators under the Airline Operators of Nigeria (AON) raised the alarm that aviation fuel has skyrocketed to 714 per litre in some airports in the country, a situation that is affecting operators adversely.
Also, companies in the Nigerian aviation industry – aviation fuel marketers, airline operators, ground handling companies and catering services among others have bemoaned the paucity of foreign exchange and the collapse of naira against major currencies.
Speaking at a recent forum organised by the Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) with the theme: ‘Advancing the Frontiers of Possibilities for Safe, Secure and Profitable Air Transport’, in Abuja, Mr. Allen Onyema, the Vice Chairman of AON, warned that if the present challenge of aviation fuel was not nipped in the bud, more airlines may shutdown operations in the coming months.
Though Onyema declined to name the airlines that could close shop in the next few months, it is very obvious the airlines are not finding it easy in terms of operational costs.
Onyema, however, said that the aviation fuel challenge was not limited to Nigeria alone, but emphasised that ours is made worse because of the slump of naira against major currencies, especially the dollars.
According to AON, in order to address the challenge, the Federal Government had approved 10,000 metric tonnes of aviation fuel to the airlines, but said the carriers were yet to access it.
He said ”That is why we ran to the government and the Federal Government has given us about 10,000 metric tonnes of fuel at the cost of N580 per litre in Lagos and about N607 per litre outside Lagos.
”This is not the only issue. Since the COVID-19 crisis, most airlines all over the world, including Nigeria have not recovered from COVID-19, except those whose countries have injected so much funds to assist them. This is nobody’s fault. It just happened. Government has tried its best by giving us this aviation fuel. This aviation fuel can take airlines out, not only in Nigeria but everywhere in the world.
”Some airlines outside Nigeria have closed down because of the effects of rising aviation fuel. If these things are not addressed in Nigeria, it can affect the bottom line of all airlines in Nigeria.
”We have come to realise that there is little or nothing the committee set up can do because this is as a result of foreign exchange and the price of oil all over the world now. The fuel marketers will sell according to what they are paying. The cost of aviation fuel has increased, even in London and every other country. Our own is worse because of the increase in foreign exchange.”
Besides, other players like aviation fuel marketers, ground handling companies and catering services in their separate presentations, complained about the state of infrastructure at some of the airports, but said FAAN in the last three years had done a lot to improve the facilities at the aerodromes.
Also, Mr. Bashir Ahmed, the Vice Chairman, Aviation Ground Handling Association of Nigeria (AGHAN), decried the level of infrastructure at most of the airports, saying that it limited the turnaround time of operators at the apron.
According to Ahmed, the scarcity of foreign exchange further reduces the operations and expansion of ground handling businesses in Nigeria.
He appealed to the Federal Government to take a critical look at the challenges in the industry and devise a means to address them.
He, however, lauded FAAN for installing two explosive detective scanning machines each at the warehouses of the ground handling companies in Lagos, saying this had gone a long way to enhance the performances of the handling companies in the industry.
He added ”We still want to appeal to the Federal Government to grant waivers to handling companies on importation of ground handling equipment. Also, we need more scanning machines by FAAN to further improve our operations and create seamless services to our clients and the airlines.
”The Nigerian Civil Aviation Authority (NCAA) has also done well with its regulation of the industry. This shows that Nigerian aviation industry is changing.”
Engr. John Abegunde, a representative of aviation fuel marketers, appealed to the government not to step into the commercial related issues in aviation fuel supply, warning that this would jeopardize safety in the system.
Abegunde explained that FAAN, NCAA and other government agencies should rather be more concerned about the stringency of the aviation fueling requirement.
He added that the fuel marketers subscribed to joint ownership of aviation companies, but kicked against the throughput arrangement, which he said may work against the industry growth in the future.
‘We should be wary of portfolio investors who come in when there are opportunities in the sub-sector, but move out with their briefcases immediately when there is a challenge,” he said.
Mrs. Adeola Omikunle, Chairman, Things Remembered Nigeria Limited, a catering service company in the industry, appealed to the government to address the myriad of challenges in the sector. She also called for a change in the bureaucracy in order to hasten business decisions.
Last Line
Aviation experts have opined that it is imperative for the government to support the private airlines such that Nigeria as a country can develop very strong airlines that can compete effectively with foreign airlines while also avoiding a situation where some private investors are giving more protections or concessions. For ease of operation, a business friendly environment and a robust policy thrust should be put in place, while making provision for adequate forex, Jet A1, single digit interest rate, infrastructure, spare parts, tax waivers, amongst others.
In addition, granting of multiple entry points to foreign airlines flying into Nigeria should be done in such a manner that it does not impede or work against the growth of domestic carriers and the economy, therefore commercial discussions and investments in local airlines should be encouraged.
About the Author
Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.
