There is an indication that more Nigerian
airlines may close shop as the current economic downturn has hampered
airlines operations.
Industry experts have expressed concern
that the forex scarcity is taking a huge toll on the aviation sector
because virtually everything done in the airline business requires
foreign exchange, except the purchase of aviation fuel.
THISDAY investigation has revealed that
already Nigerian airlines have lost over 45 percent of their passenger
traffic while the value of their ticket has also nosedived.
An operator, who spoke to THISDAY on
Wednesday, explained why the air transport sector is fairing badly under
the present economic morass. He expressed doubt about the possibility
of the airlines to survive, if the recession continues in the next six
months.
“I doubt whether Nigerian airlines will
survive the next six months if naira does not gain value and continues
to lose against the dollar. Practically, let us look at the popular
aircraft many Nigerian airlines use: Boeing B737. Average number of
seats on that aircraft is 120 and if the fare for Lagos to Abuja flight
is N25, 000 the airline will generate N3million for every flight.
“At the exchange rate of N400 for $1
dollar that N3million will be $7, 500. But 18 months ago, naira was
exchanging N165 for $1 and the value of the same N3million $18, 750.
Then during that period aviation fuel was costing N110 per litre and
today it costs N220 per litre and the fuel volume for that one hour
flight from Lagos to Abuja is 3000, including endurance fuel.
“About 18 months ago 3000 litres of fuel
would cost N330, 000, but at the present price, it costs N660, 000. You
have to note that airfares have not changed. It is just around that N25,
000. So the fuel price increased by 100 per cent while the value of the
dollar has increased by over 200 percent,” the operator told THISDAY.
He also noted that as the value of naira
has plunged, airlines still pay their expatriate workforce in dollars
and these include pilots, engineers and others that are providing
technical services and some Nigerian pilots that insist they be paid in
dollars.
“So you can see that we spend more money
in naira for far less number of dollars and this means that it is only
for $7, 500 that a flight leaves Lagos to Abuja and vice versa,” he
said.
The operator also disclosed that when an
airline leases aircraft, the average calculation is that the airline
will pay the lessor about $12, 500 per hour of the aircraft operation
and, according to him, the amount could come down to $12,500 when the
airline is making a bulk lease of the aircraft of over 200 hours.
So what this means is that while the
Nigerian airline earns $7500 per one hour flight, it pays the lessor
$12, 500 for one hour and incurs a loss of $5000 in each flight.
“This shows clearly that these airlines
will not survive if the recession period is prolonged. So pilots,
engineers, aircraft maintenance, insurance, spare parts and training are
paid in dollars. This is a sector that is dollarized. So how can
anybody survive this? This is simply a matter of postponing the evil
day,’ the operator said.
In addition to the above, the airline
pays for landing and parking, enroute and navigation charges to the
Nigeria Airspace Management Agency (NAMA) and other miscellaneous
expenses.
In a recent interview with the Minister
of State for Aviation, Senator Hadi Sirika, he promised that government
would facilitate the establishment of aircraft maintenance facility in
Nigeria and also a leasing company so that Nigerian airlines could lease
aircraft at cheaper cost and also maintain their aircraft locally. The
cost of maintenance for C-Check begins from $600, 000 to over $1
million.
SOURCE: Thisdaylive.com
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