‘High Cost of Operation Affects Profit Margin of Domestic Airlines’

‘High Cost of Operation Affects Profit Margin of Domestic Airlines’

Chinedu Eze

Former Senior Special Adviser to the President on Aviation and the Managing Director of Afri-Air International Limited, Captain Shehu Iyal has highlighted the challenges that domestic airlines face in Nigeria due to high cost of operation.

According to him, the challenges include high cost of aviation fuel, known as Jet A1, high aircraft insurance premium and multiple charges and taxes, insisting that such challenges will make it extremely difficult for airlines to make profit.

“Airlines are at the mercy of so many variables. They are at the mercy of the availability of Jet A1, if it is there, at what price? They are at the mercy of even getting a boarding gate at some airports. There is no airline in Nigeria today that can boast of making a profit in any circumstance,” Iyal said.

He quoted the Managing Director of FAAN, Captain RabiuYadudu, who said: “There is an airport in America where they even gave an airline some money to enable the airline to fly there in order to develop the airport. We are in a very bad situation, I don’t operate an airline but I have friends that operate an airline. In fact I wonder how they do it. So lets not over tax or overwhelm the airlines to get into trouble, because they are already in trouble.”

Iyal who is fixed-base operator at the General Aviation Terminal (GAT) at the Lagos airport, also said that the aviation industry in Nigeria needed more support and noted that the industry played critical role as economic driver of any nation.

“There is a need for the government to realise that aviation is more than business because it buoys the economy of every nation. So, there is no reason why airports and airlines should have the kind of problems we are having today because aviation is a component of national security. So for whatever reason, we must find a way of helping them to survive. After that we talk about sustainability,” Iyal further said.

He however remarked that despite the challenges the airlines face in Nigeria, the domestic market is still growing and has more room for growth.

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