Nigeria’s lingering foreign exchange scarcity and aviation fuel have contributed both to a quarterly and a year-on-year decline of 0.4 percent and 8.5 percent, respectively, with a total of 3,810,758 passengers, compared with 4,163,762 passengers in the fourth quarter of 2015.
According to data released by the Nigerian Bureau of Statistics (NBS), in the third quarter of 2015, the total number of passengers that travelled through Nigerian airports was 3,824,319, which represents an increase of 299,533 (8.5%) relative to the number in the second quarter.
The fourth quarter saw both a quarterly and a year-on-year decline, of 0.4 percent and 8.5 percent, respectively, with a total of 3,810,758 passengers, compared with 4,163,762 passengers in the fourth quarter of 2014.
The scarcity of aviation fuel, which set in November 2015, was largely blamed on marketers being owed subsidy claims. It saw operators leaving their aircrafts underutilised resulting in loss of revenue.
“The problem of getting aviation fuel for airlines has been going on for a very long time in the country. It has even been worse for us, especially in our operations out of the Abuja airport because all the fuel supply we get comes from Lagos.
“And there is no incentive to truck it that far from Lagos to Abuja. And so, if there is a little bit of scarcity of supply, it really affects our operations outside Lagos,” Chris Ndulue, managing director/CEO, Arik Air, said.
The statement from NBS corroborates this view, “After falling between 2014 Q4 and 2015 Q1, the total number of domestic passengers increased every quarter in 2015, to reach 2,723,769 in the fourth quarter; 121,316 (4.7%) higher than in the third quarter, but still 245,971 (8.3%) lower than in the fourth quarter of 2014,” according to the statement from the NBS.
Federal Government’s refusal to allow market forces determine the value of the naira created a situation where foreign airlines operating in Nigeria have been accused of procuring foreign exchange from ticket sales at official rate of N199/$1 from the Central Bank of Nigeria for onward repatriation to their home countries, but allegedly use the parallel market rate of about N300/$ when Nigerian passengers chose to pay for their dollar-priced tickets in naira instead of using the official rate.
“I tell you that the impact on the aviation industry is so much as we depend on a lot of imports. We import the aircraft, we import the aircraft parts, we import the service providers and we import other services. Basically, from time to time, we have to change the naira to dollars and in our own case we have to pay our own aircraft maintenance service providers.
“Arik does international operations, but it is not enough to meet our dollar requirements and that has really posed a lot of problems for us,” Ndulue said.
Chinedu Okoronkwo, national president, Independent Marketers Association of Nigeria (IPMAN), said, “The scarcity is not insulating anybody. Every genuine businessman suffers from scarcity of forex. It is not available for fuel importers, and that is why we are calling for total deregulation.”
Industry sources also urged the Federal Government to review the Bilateral Air Service Agreement (BASA) with other countries because Nigeria is not benefiting fully from some of the deals.
Meanwhile, Ibe Kachikwu, minister of state for petroleum resources, and Hadi Sirika, minster for aviation, said they were working to ensure uninterrupted supply of the deregulated aviation fuel to airline operators in the country.
“The immediate action point for now is to meet with all the importers of aviation fuel, to understand the consumption patterns, and also look at their cost to ensure that they are not profiteering excessively,’’ Kachikwu said.
Sirika said ensuring availability of JET A1 fuel had become imperative, considering it accounted for about 45 percent of the total cost of operation.
