Airlines Losing Business To Falling Naira

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Airline operators in the Nigeria have been recording losses due to the continuous decline in the value of the local currency, the naira, the Chief Operating Officer of Dana Airlines, Mr. Obi Mbanuzuo lamented, saying it has brought untold hardship to airlines in the country.
He stated that the situation has led to astronomical rise in the cost aircraft maintenance, payment of salaries, aircraft spare parts which he said are dollarized. He however expressed optimism that the situation will improve with the administration that is in place.
Speaking on the sideline of the airline’s inaugural flight launch to Accra, Ghana, the airline chief said the prevailing situation is putting a lot of pressure of airlines operating in the country. He noted that the situation portends serious problems for the sector and the industry, stressing that carriers will spend so much on spare parts and maintenance, which he said are dollarised.
His words, “We are not coping with the diminishing value of the Naira. Maintenance is there to look at; salaries would have to be paid. We just have to cope. Things will turn around very soon with this government.”
It was learnt that some airline operators are already tinkering with the idea of passing on the increased costs of aeroplane maintenance (which is done in dollars, hence the increase) to their travelling customers.

But experts say doing so would lead to many travellers completely boycotting air travel because of their inability o afford any increase in air fare, considering that many already consider less than $100 for one hour flight astronomical.

In Nigeria, compared to other nations, domestic air travel is considered ridiculously low; a situation that has adversely led to the extinction of many carriers.
For the past few months, the naira has been sliding between N220 and N240 to 9.4 per cent.

The airline chief stated that the cost of aircraft maintenance could double coupled with insurance premium which could also be high. It is already a tough era for operators in the Nigerian aviation sector as wary international aircraft lessors classified the country among “high-risk nations” for doing business.

As a result of incessant air mishap which claimed the lives of passengers and crew members, major aircraft leasing firms such as GE Capital Aviation Services (GECAS), International Lease Finance Corporation (ILFC), Cab Tree and Aercap have raised the lease on aircraft to Nigerian airlines by over 40 per cent.

Managing Director of IRS Airlines, Yemi Dada recently stated He that Dada with the recent situation, airlines might have to pay more for these services and general cost of operations.

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