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Domestic airlines operating in the country are currently experiencing a decline in their number of operating fleet as they struggle with high operating costs.
Gbenga Olowo, President of Aviation Round Table (ART), explained that recently there has been continuous depletion of the fleet of Nigerian airlines.
Olowo recalled that in 2010, Nigerian airlines had 54 commercial operating aircraft but by 2013 the fleet had reduced to 39, noting that with declining fleet size, route expansion would be limited and robust schedule very difficult and down time for maintenance would impact negatively on schedule.
He attributed the failure of airlines to replacing or adding more aircraft to their fleet to the harsh operating environment, high charges paid by the airlines to aviation agencies and poor managerial skills by the airlines management.
“Airline user charges for example are as high as 15 per cent. User charges are revenue collected for other organisations factored into the fare (without commission) whereas airlines are not revenue collectors. Hence the former International Air Transport Association (IATA) Director-General, Tony Tyler described airlines as cash cows.
“High cost of fuel, high cost of funds, exorbitant airport rent and airspace movement charges at home require government serious attention. On the other hand, poor management decisions and corporate governance by the airlines owners have resulted to high mortality rate in the industry,” Olowo said.
A weaker naira has resulted in a sharp rise in aircraft maintenance costs but passenger traffic has also dropped off as Nigerians struggle with rising inflation which has eroded their purchasing power forcing them to forgo the “luxury” of flying.
BusinessDay’s investigations show that at the exchange rate N199 to a dollar, it cost airlines between $1 million to $2 million, amounting to N199 million to N299 million to carry out a comprehensive C-check and a D-check, depending on the aircraft type.
However, with the interbank exchange rate at an average of N305 to a dollar, airlines now have to pay about N305million to N405million for their aircraft maintenance, which must be done once every 15 to 18 months.
The C-Check is a comprehensive inspection that covers hidden parts so that any damage or cracks in the internal parts of the aircraft can be detected. The most detailed inspection is the D Check. This inspection is generally an overhaul.
A souce at the Nigerian Civil Aviation Authority few months back said that some airlines have had abandoned to abandone their aircrafts abroad becuase of the high cost of maintenance which they could not afford then.
Domestic airlines have also seen a sharp rise in the cost of aviation fuel. Presently, aviation fuel is sold at a rate of N200-N210 per litre against N120 per litre a year ago, a 75% increase.
Aviation experts say a Boeing 737 will consume an average of 37,000 to 40,000 litres of fuel on a return trip between Lagos and Abuja, Port Harcourt, Kano or Enugu which are Nigeria major destinations.
Allen Onyema, Chairman of Air Peace Limited also warned that unless urgent action is taken to establish a Maintenance, Overhaul and Repair (MRO) facility locally, domestic airlines would find it extremely difficult to continue to operate.
Onyema says the cost of aviation fuel, which constitutes over 40 percent of airline’s operational cost, and aircraft maintenance cost are eating up the revenue of airlines.
Few weeks back, Saleh Dunoma, the managing director of the Federal Airports Authority of Nigeria (FAAN), explained the difficulty encountered trying to get a flight from Abuja to Lagos.
He observed that paucity of operational equipment is now a fundamental challenge to Nigerian airlines, which may have aircraft in their fleet but not many of them are operational and airworthy.
According to him, “The major problem is the dwindling capacity of our airlines. They are faced with lack of equipment and fuel scarcity. Most of the airlines don’t have aircraft to operate their schedule in addition to fuel scarcity, so we need to look at the situation of the airlines,” Dunoma told Senate Committee on Aviation in its recent fact finding mission to Lagos.
The FAAN boss also noted that the agency is being owed by the airlines, which cannot airlift passengers and earn its revenue, remarking that as long as the airlines are not doing well and earning revenues it would be difficult for them to pay their charges and other expenses.
Ifeoma Okeke
