Nigeria is going through a foreign exchange crisis as the cost of converting Naira into US dollars increases, especially on the black market.
The Naira, the currency of Nigeria, trouble due to high volatility. This has many unfavorable knock-on implications on the economy, but recent events have made things worse.
The Naira has declined dramatically in the recent months on the black market, while the official rate I&E, has seen only a small fluctuation.
According to Mazi Osita Okonkwo, the Chief Operating Officer (COO) of United Nigeria Airlines (UNA), the two main obstacles to the growth and stability of domestic airlines are the skyrocketing price of Jet A1 (aviation fuel) and the lack of available foreign currency.
Okonkwo pleaded with the Federal Government to take action by providing palliative for operators in an effort to end the problem.
This was recently said by Okonkwo in an interview in Lagos.
According to him, the local aviation businesses were in called for government intervention.
He stressed that given the existing circumstances, it was impossible for domestic airlines to turn a profit by levying fees that hardly ever allowed them to survive in the face of difficult access to foreign currency and the soaring price of Jet-A1.
Okonkwo named the high cost of aircraft maintenance and the difficulty operators have with foreign exchange as some of their problems, adding that it would not be inappropriate for the government to step in and provide support to keep the carriers afloat.
There is a need for government action in Nigerian airlines, he declared.
That is not an excessive amount to ask. They should include airlines as they have already intervened in some businesses and provided foreign currency to some.
The value of every part of an airplane is eroding. Fuel cost N200 when we first started in 2021, but it suddenly increased to N300 per litre, and now it costs roughly N800 per litre. You must wait in line to obtain foreign currency. There are Aircraft On Ground (AOG) waiting to be transported overseas for significant maintenance while you are in line.
According to Okonkwo, larger, heavier aircraft like the B737, Airbus aircraft, or MD-83 would consume more than 3,000 liters of gasoline for the same one-hour trip as lighter, smaller aircraft like the CRJ, Embraer, and ATR.
Giving specifics, he continued, Aviation fuel is between N790 and N800 per litre, and for 1,300 liters for CRJ and Embraer, you spend between N970,000 and N1.04 million for one hour trip. However, at N45,000 per passenger for a 90-passenger aircraft, the airlines make between N4.05 million and N3.14 million, while on a 70-seater aircraft. On their flights, which are typically one hour long, the airlines often carry less passengers than that.
What remains are so minimal to support their operations after deducting the cost of fuel and fees to various aviation bodies including the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management (NAMA), and the Nigerian Civil Aviation Authority (NCAA),
In addition, the airline claimed to have transported around 800,000 people throughout its routes in the previous two years.
When it transports its 1000th passenger, the airline, which presently has four CRJ aircraft in service, promised to make a public announcement.
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