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Nigerian airlines’ demands drop as cost rises

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By Abiodun Okunloye

AON express concerns over rising costs, passenger decrease, currency access.

The Airline Operators of Nigeria (AON) have raised concerns about the problems affecting their sector, emphasising that escalating expenses, declining number of passengers, and limited access to foreign currency are major obstacles to their existence. Spokesperson Obiora Okonkwo, AON, issued the statement on Friday, outlining various factors that are exacerbating their predicament. The statement highlights a chain reaction of increasing expenses throughout the Aviation system, encompassing services for managing ground operations, fees imposed by airports, and upkeep of aircraft.

A combination of these upward trends, along with the limited availability of funds, creates a substantial strain, compelling them to transfer the weight onto travellers by implementing elevated fares. Okonkwo highlights a decrease in the number of passengers travelling, which can be attributed to the financial constraints faced by Nigerians. Even social gatherings such as weddings and funerals now witness a growing trend of people choosing virtual participation through credit alerts rather than physical travel. This shift has a significant impact on the Revenue generated by airlines.

Airlines struggle for funding despite lease compliance and adherence.

Furthermore, the statement acknowledges the hurdles they face in procuring new aircraft due to the negative perceptions surrounding the country risk. Nigerian airlines face considerable struggles in attaining the essential funding they require, even when they fulfil lease agreements and comply with standards. These challenges stem from apprehensions surrounding the overall economic conditions and the stability of the local currency. He expresses his disapproval towards the Central Bank of Nigeria (CBN) due to its inability to adequately supply airlines with the necessary foreign currency to function effectively.

Even though certain airlines have deposited funds with the CBN, the struggle to obtain dollars continues to pose a substantial obstacle. These apprehensions present a grim outlook for the Nigerian airline sector, underlining the likelihood of additional disruptions and potential halts in services if these issues persist without a solution. His statement reveals that they are suffering from uncontrollable circumstances leading to losses. The scarcity of foreign currency presents a major challenge, and even the aviation industry is experiencing the consequences.

Event attendees prefer monetary gestures over expensive flights.

Companies responsible for handling flights have significantly increased their service fees, while airports have raised their charges. Additionally, the aircraft maintenance and servicing providers have unreasonably inflated their service costs. The funds required for these payments are sourced from weary passengers who are already experiencing financial exhaustion. The decrease in passenger traffic is evident as many prefer to attend events virtually. They opt to send funds to the host of the event, who truly appreciate such kind gestures. Consequently, the introduction of additional aircraft is unfeasible due to mounting apprehension among aircraft owners caused by the uncertain country risks.

Despite meeting all the required terms and standard criteria, a Nigerian airline’s chances of success are overshadowed by the aircraft owners’ concern for country risk, which they prioritise over other factors. Country risk takes precedence over all other factors, and lessors are bound by their own obligations. Therefore, personal matters hold no weight in this situation. Several airlines have made deposits with the Central Bank of Nigeria; however, they are unable to fulfil the requirement for dollars.

Related Article: Int’l airlines contemplating to leave Nigeria

Lastly, the statement released by AON addresses the worries surrounding the possible outcomes caused by these difficulties. If costs continue to rise, it is likely that ticket prices will also increase, thereby making Air Travel less affordable for several Nigerians. In order to cope with financial limitations, airlines might find it necessary to decrease flight frequencies or even suspend specific routes. Considering that a considerable number of Nigerians are employed in the airline industry, potential job losses could create a chain reaction affecting the broader Economy.


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