Nigeria’s airlines face extinction in 30 days without urgent action, Onyema warns
Onyema insisted that the Nigerian business climate itself is the bigger problem, a position he said had also been corroborated by the International Air Transport Association, IATA.
By Charles Bassey Silas
Domestic airlines in Nigeria may collapse within the next 30 days unless the Federal Government intervenes urgently to address the worsening operating environment, Chairman of Air Peace, Allen Onyema, has warned.
Speaking to aviation journalists in Lagos on Wednesday, Onyema described the current situation in the industry as an “existential crisis” comparable only to the circumstances that led to the collapse of the defunct Nigerian Airways.
“The operating environment has become so hostile that many indigenous carriers are struggling to remain in business despite their strategic role in the economy,” he said.
The warning comes amid a 21-day standoff with labour unions who have threatened to picket airline operations over the controversial five per cent Ticket Sales Charge, TSC.
The unions argue that the airlines’ failure to remit the five per cent TSC to relevant agencies through the Nigeria Civil Aviation Authority, NCAA, is affecting the financial performance of the organisations and, by extension, the welfare of their members.
But Onyema insisted that the Nigerian business climate itself is the bigger problem, a position he said had also been corroborated by the International Air Transport Association, IATA.
He lamented that many Nigerians wrongly assume airlines make enormous profits without understanding the cost structure of operations.
“We are facing a phase that poses existential threats to the continued operations of these airlines. Trust me, in the next 30 days, a lot of airlines in this country will go extinct if nothing is done,” Onyema stated.
“People say airlines made N10 million today, but they don’t ask how much it cost to make that N10 million. Sometimes you spend N30 million to generate N10 million. That is why airlines are struggling.”
The Air Peace boss further warned that using labour unions to pressure airlines over financial disputes would set a dangerous precedent capable of destabilising the industry. He added that any disruption of operations would ultimately hurt passengers, employees and the Nigerian economy.
Describing aviation as “one of the most capital-intensive yet least rewarding industries in Nigeria,” Onyema said operators continue to battle high interest rates, multiple taxation, foreign exchange challenges and rising operating costs despite huge investments required to keep aircraft flying.
He revealed that no fewer than 50 carriers have ceased operations in recent years, noting that most promoters of those airlines have succeeded in other businesses they ventured into.
Onyema appealed to the Federal Government and industry stakeholders to urgently implement measures that would reduce the financial burden on airlines and safeguard the future of Nigeria’s domestic aviation industry.
ACAKS news desk
