Airlines operating in and out of Nigeria will face a general decline of between 2,247 and 2,915 million passengers in year 2020 according to a recent aviation report authored by Tolu Odutola.
This decline is occasioned by the regulations by the Nigeria Civil Aviation Authority, (NCAA) demanding that airlines should offer 48 percent to 63 percent load factor.
According to Odutola’s report, a possible potential loss is approximated at between USD 104 and 136 billion in gross operating revenues of airlines
He explained that the Nigerian aviation industry, which is totally denominated in foreign exchange, has not been spared either (other currencies are used for aircraft procurement, training of pilots, sourcing for jet oil and spare parts, as well as maintenance).
In an effort to contain the spread of Covid-19, all Nigerian international airports were shut on March 23, 2020, save for emergency and essential flights.
He stated that this has left about 120 domestic aircraft grounded nationwide, leaving operators without a source of income but recurrent expenditure.
Read also: COVID 19: Domestic flights still in operation FAAN
The Federal Airports Authority of Nigeria (FAAN) has been most affected, cognizant of the fact that it has a workforce spread across a total of 22 airports in the country, and without a source of revenue.
Other agencies with similar predicament include the Nigerian Civil Aviation Authority (NCAA), which is the apex regulatory body for aviation, and whose monthly overhead stands at N750 million; the Nigerian College of Aviation Technology (NCAT), which requires N150 million monthly; the Nigerian Metrological Agency (NIMET), which requires N290 million monthly; and the Nigerian Airspace Management Agency (NAMA), which requires more than N500 million.
Odutola the author of the report referenced the World Bank data, 2020; prior to the Covid-19 crisis, aviation contributed $1.7 billion to Nigeria’s GDP, offering employment support to 241,000 persons.
Figures by the Nigeria Bureau of Statistics indicatef that by the end of Q4 in 2018, aviation was the second fastest growing sector in the country, taking the lead by Q4 in 2019. 13
According to the International Air Transport Association (IATA), this pandemic risks 124,000 Nigerian aviation jobs, which would see the country lose up to $900 million in GDP.
Odutola stated that already, the major carrier in Nigeria, Arik Air, has asked 90 percent of its 1800 staff to proceed on indefinite unpaid leave, with the remaining 10 percent subjected to an 80 percent pay cut on their salaries/wages.
He further stated that there are fears that up to 50percent of the workforce may be compelled to resign, as the airline plans to right-size the workforce.
In April, Max Air followed suit by sending its staff on unpaid leave, for the period of the imposed lockdown.
