The Founder and Chief Executive Officer of Air Peace, Allen Onyema, has expressed deep concern over the parlous and precarious state of Nigeria’s aviation industry.
He pointed out that skyrocketing prices of aviation fuel and crippling prohibitive interest rates are threatening to push domestic airline operators out of business.
He disclosed that challenges facing Nigerian carriers are not peculiar to the West African nation’s aviation industry, noting that it is a global aviation crisis that has now been exacerbated by the fallout of the conflict in the Middle East which is occasioned by the war between Israel and Iran
Onyema who spoke during an exclusive interview on ARISE News on Tuesday, stated that airlines around the world have been forced to cut operations amid soaring costs of staying afloat.
“Since the advent of the Israel-Iran war, the aviation world has been adversely affected,” Onyema said.
“You can see that airlines have been closing down, shutting down. Some legacy airlines, some of the biggest airlines have been cutting flights, up to 30,000 flights.”
He explained that even though every airline across the world has been affected by the current aviation crisis, Onyema said the situation has been far more brutal and crippling for Nigerian airlines owing to the astronomical rise in aviation fuel costs.
“The cost of the aviation world was 30% to 40% from what it used to be. Just because of 30%, the result is a huge problem, It’s a trouble to survive. However, in my country, the aviation world has gone beyond 250%. At the time, it was about 300%. So you do the mathematics, and this is what the Nigerian airline is supposed to cap it,” he explained.
He said operators are being forced to borrow simply to sustain flight operations.
“No Nigerian airline is smiling now. You take off to go to Abuja, you used to buy fuel for about 3 million on a flight of 4 million. Now it’s about 12 million, 13 million for the same flight.”
Onyema also noted that local operators are handicapped by high interest rates, as they don’t have access to credits and financing framework at reasonable and considerate interest rates compared to their counterparts in developed nations.
“And mind you, these airlines from the Western world, their funding has, at most, 4% interest rate. Here in Nigeria, we get our funding at about 29 to 33%, The Nigerian airline is actually dead on arrival,” he said.
Onyema added that despite the mounting pressures, Nigerian airlines continue to operate in service to the country, even as economic realities make profitability increasingly difficult.
Onyema also disclosed that Nigerian airlines are seeking a meeting with President Bola Tinubu to discuss the challenges facing the aviation sector, particularly multiple taxes, charges, and rising operating costs that continue to threaten the survival of domestic carriers.
“We are seeking an appointment with the president. And we think the president should see us and hear from us. We are patriotic citizens of this country. We appreciate what this government has done for us. But they need to listen more to us and get to know the pains, the pain points that are hitting these airlines,” Onyema said.
Onyema specifically criticised the five per cent Ticket Sales Charge (TSC) imposed on airlines, arguing that operators bear the burden of the levy despite claims by the Nigerian Civil Aviation Authority (NCAA) that it is paid by passengers.
“The truth we have to tell the president is that the 5 per cent passenger TSC, charges the airlines. And they will tell you that, it’s the passengers that pay it. We refuse to accept,” he said.
“If I charge 100,000, the NCAA will take 5 per cent. If I charge 200,000, the NCAA will take 5 per cent of 200,000. I didn’t set up business with you. Because aviation itself does not give you a 5 per cent gain. But they tell you, it’s the passengers that pay it.”
The Air Peace CEO implored the federal government to constitute an aviation taxes and charges committee that will review and assess levies imposed on airlines, arguing that some of the charges have contributed to the collapse of several carriers over the years.
“Over 70 airlines have come and gone in this country. Nigeria has the highest mortality rate of airlines worldwide. That’s not complimentary. We keep on complaining. Nobody is listening to us,” He said
“We want Mr President to set up aviation taxes and a charges review committee. It is very important, so that it doesn’t look as if we are trying to fool the government”
Onyema warned that the collapse of airlines could have ripple economic fallout, including job losses and financial exposure for lending institutions.
“If any airline goes down, banks will take a hit. And it creates massive job unemployment. A lot of people will be thrown into the unemployment market,” he said.
