How forex disparity is affecting our operations — Ibom Air COO
The Chief Operating Officer (COO) of Ibom Air, Mr. George Uriesi has explained how the disparity in forex is affecting the operations of the airline.
Airlines in Nigeria have been having issues as touching repatriation of trapped funds in and are currently facing the crushing effect of the dollar floatation by the federal government and cannot raise fares as that may further decrease the number of passengers who may be willing to fly despite the economic situation.
Reacting to an equiry on payment of aircraft insurance in dollars at the 3rd AviaCargo Chinet Conference in 2023, the COO admitted he does not know how other airlines manage the situation but he noted that the situation is a cause for concern.
George stated that the airline, Ibom Air is still committed to start its West Coast operations commencing with Ghana despite the unpredictable terrain.
According to him, insurance, one of the dollar based payment components of any airline business is a sine qua non and with the rising cost of the dollar so increases the losses.
He, in fact, stated that the airline’s losses are those accumulated in dollars due to the rising cost.
He said, “Insurance is a growing problem and because we cannot fly an uninsured aircraft we have no choice but to hang in there and source for the dollars to do the insurance.
“The losses we accumulated were mainly dollar based components, when you are procuring dollar above the then CBN rate, you apply when it was 400 to a dollar and you get it at 680. The difference is a lot.
“Now, it is being floated and it is running faster. Yesterday we bought dollar for 915 but on the platform it was put at 890. Today, it is 900 on the platform I’m sure when we are getting it we would procure at 950.
“The new style now is they tell you ‘ give us cash and when we buy dollar we will give you.’ But it delays, you ask for your cash back and they tell you that you wouldn’t get the dollar.
“Then when they now have the $400,000 they will now tell you the price they got it for exceeds what was paid and you need to add more. That is where we are now, I don’t know how other airlines are managing,” He said.
On the sidelines of the program he stated further, “I don’t know, I hope it gets okay even if it stops at N1,000, let it stop there then you know what you are dealing with everyday. Now you wake up every morning and they have added N50.
“I don’t know but there is a point we get to, we may not be able to do it again but I hope we don’t get there.”
On raising fares to reflect current realities he said, “You cannot increase fares ad-infinitum, at some point you get to where ‘na only you and your airplane go dey fly‘ so you have to first struggle where you are. We have not raised fares because at this point in time if you attempt to do it, you’d be flying empty.”
On its Ghana operations, Mr. Uriesi, noted that the airline is still preparing for it.
“However, you would want to start a new route in a stable and predictable environment, but Nigerian airlines, somehow we manage it all the time, we just keep going,” He stressed.
