The Sustainability of domestic airlines operating in Nigeria is being threatened by unprecedented hostility and disincentives that go beyond professional standards and regulatory structures. Nigerian airlines have long lamented the challenges they encounter in leasing aircraft, and lately, several lessors have maintained their stance on refusing to provide dry leasing of aircraft to Nigerian carriers. This attempts to limit the high cost of wet leasing aircraft and to postpone the possibility of domestic operators to acquire aircraft for an extended period of time. Another significant problem is brutal demarketing, in which unidentified individuals disseminate erroneous information regarding the safety of Nigerian airlines, as seen in the recent case of Air Peace.
Among these strategies are made-up tales of buying air traffic controllers off to mislead pilots. Such false information discourages potential travellers and damages the reputation of Nigerian carriers. Additionally, efforts are being made to safeguard the reputation and commercial interests of Nigerian carriers as well as to identify and contact sources of misleading information. Since Air Peace began operating to London, rival airlines have used both legal and deceptive marketing techniques to compete with it. While some have attempted to intimidate prospective passengers with false Social Media posts, industry insiders emphasized Air Peace’s safety and thorough procedural assessments.
High cost of aviation fuel is another major hurdle.
An industry expert, Amos Akpan recommended working with the National Security Adviser to identify and convict people responsible for posting false information to ensure compliance and high-quality service. Former Aviation officials like Fola Akinkuotu and Benedict Adeyileka stress that in order to safeguard the airlines’ reputations and maintain sector stability, regulating organizations like the Nigerian Civil Aviation Authority (NCAA) should probe into and refute deceptive information. This is because any Airline that experiences negative effects may lose business to its foreign partners. The challenge faced by domestic carriers extends to issues in obtaining foreign exchange (FX) to maintain their aircraft.
Due to a shortage of funding for repairs, more than 50 percent of the aircraft operated by Nigerian airlines remain either idle or stranded in maintenance facilities. As a result, there are now fewer flying services available, more expensive tickets, and less ability to accommodate passenger demand. The high cost of aviation fuel, which accounts for 40 to 60 percent of an airline’s operating expenses, is another major hurdle. Due to their reliance on imported Jet A1 fuel, carriers are more prone to fluctuations in the global oil market, which further jeopardizes their economic viability.
Multiple taxes concern compound airline business climate.
Deficits in infrastructure, such insufficient navigational aids and ineffective airport facilities, also pose serious difficulties. In addition, high interest rates, strict leasing terms, and Nigeria’s classification as a high-risk nation make it difficult for Nigerian carriers to obtain reasonable financing. The complicated airline business climate in Nigeria is further compounded by multiple taxes concerns and exorbitant fees levied by aviation regulatory organizations. To lessen all this, there have been requests for the Nigerian Civil Aviation Authority to ensure that lessors can easily reclaim their assets and for The Central Bank of Nigeria (CBN) to support carriers in obtaining foreign cash to pay for leases.
Some Nigerian airlines had a history of violating lease agreements between 2008 and 2012, which made it difficult for lessors to reclaim their aircraft. As a result, lessors were reluctant to establish relationships with Nigerian carriers and their reputation was tarnished. One step towards restoring trust has been the facilitation of aircraft repossession in accordance with the Cape Town Convention by Captain Usman Muhtar, the former NCAA Director General. By taking this action, Nigeria hoped to reassure lessors of its dedication to honouring international agreements.
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Nevertheless, Nigerian carriers continue to be seen as a high risk partner by lessors, insurers, and others due to its past issues. Recently, Festus Keyamo, the Minister of Aviation and Aerospace Development, has been working to re-establish trust and negotiate new leases. He has been working to ensure compliance with the Cape Town Convention by drafting practice directions that prohibit courts from detaining leased aircraft, which has involved meetings with high-ranking government officials. Experts in the field contend that it is crucial to concentrate on adhering to operational requirements and safety procedures.