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Aviation: Three more airlines may shut down in four months over industry challenges

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…Open foreign exchange earnings account with CBN to address challenges — Ojikutu tells Operators

By Ogaga Ariemu

Nigeria’s aviation industry is set to witness more woes. This is as the National President, Aircraft Owners and Pilots Association, Aviation analyst, Capt. Alex Nwuba, revealed that three more airlines may go out of business before the end of the year following the current challenges facing the sector.

He also said the proposed Nigerian carrier, Nigeria Air, will not perform any magic in terms of addressing the depleting capacity of the domestic airlines.

Nwoba made this disclosure while featuring on Trust TV yesterday.

Recall that the Aero Contractors and Dana Air have been forced to shut down following economic constraints.

Nwuba called on the government to approve short term measures like downward review of taxes and charges like the ticket sale charge (TSC), Passenger Service Charge (PSC), fuel tax, among others to ameliorate the challenges of the airlines.

According to him, while the short term solutions help, they do not in any way eliminate the problems.

“The problems are much more fundamental and need to be addressed much more fundamentally.”

“Everything helps. The 5 percent helps, PSC reduction helps,  removal of over-flight charges helps, removal of taxes on aviation fuel helps, government intervention in some matters, availability of foreign exchange helps. So, when we put these together, ultimately things become a lot easier.

“This industry faces serious problems and that problem is that a few more airlines are likely to go under if nothing is done because you can’t continue to spend and the environment is very challenging.

“Most of the airlines depend on money from ticket sales and bank borrowings… In the short term, if nothing is done, before the end of this year we would lose three more airlines.”

Also speaking on the development to Nigerian NewsDirect on Tuesday, an Aviation expert and Group Captain (Rtd), John Ojikutu, said operators should create a domiciliary account with Central Bank Of Nigeria(CBN) where foreign exchange earnings will be kept to address challenges.

“Operators should have envisaged irregular forex demands in their Business Plans and that CBN may not cope always with demands for forex if they are not making contributions in forex earnings into the Federation Account or have domiciliary forex account where such earnings are deposited possibly with interests in local or foreign currency.

“Without such a set up, aviation forex demands will put too much pressure on other social/economic development demands,” he said.

Nigerian NewsDirect reports that the airline industry is currently on the edge of the skyrocketing price of aviation fuel known as Jet A1 and the rise in foreign exchange rates. This has resulted in the hike in the cost of air fares across operators.

Nigerian NewsDirect gathered that an hour air fare from Abuja to Lagos that usually cost N16,000-N23,000 now goes for N130,000 to N150,000.

Aviation

Association urges FG to settle defunct Nigeria Airways pilots

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The Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) has re-echoed the call on the federal government to settle the outstanding severance benefits of erstwhile workers of the defunct Nigeria Airways.

The First Vice President of the association, Mr Emmanuel Jaja, said this in commemoration of the 2024 International Workers’ Day on Wednesday in Lagos.

He said that the workers put in the greater part of their life in the service of the airline, which was liquidated during the regime of former president OlusegunObasanjo.

Jaja regretted that over 100 former workers of the former national carrier had died since the last verification and part payment exercise carried out in 2019.

“Again, we wish to lament the death of five former Staff of the Nigerian Airways Staff who lost their lives in the last one week, including the pilot whose plane was hijacked in 1993, Captain MakpoOmodiagbe, without them receiving their full benefits from the federal government after the liquidation of the airline.

“The government must endeavour to pay the remaining living staff so that they can enjoy the labour of their lives before they are called home by their creator,” he said.

Jaja also decried the recent increase in electricity tariff in the country amidst the epileptic power supply, calling for a return to the status quo.

The ATSSSAN leader lamented the hardship in the country following the fuel supply challenges, stating that the labour body was studying the situation.

He also spoke on the issue of companies in the aviation industry that had refused to allow their staff to join trade unions.

Jaja said labour would soon make the industry uncomfortable for such companies and airlines.

“Government must also urgently address the issue of minimum wage for workers in order not to incur the wrath of the Nigerian workers,” he said.

Jaja said that ATSSSAN, in collaboration with the National Union of Air Transport Employees and other unions, would henceforth, not tolerate airlines and companies refusing to allow their workforce to be unionised.

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Aviation

Aviation sector to benefit from RIDF

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Aviation is set to be part of key economic drivers that will benefit from President Bola Tinubu’s proposed Renewed Hope Infrastructure Development Fund (RIDF).

In a statement by Ajuri Ngelale, the fund targets strategic sectors like agriculture, transportation, ports,  energy, healthcare, and education along with aviation.

The initiative plans to inject funds into vital national projects to foster growth, bolster local value addition, generate jobs, and spur innovation.

Efficient use of low-interest loans and financing options will secure advantageous arrangements for project financing and operation.

The focus on aviation enhancement involves modernising major airports nationwide with targeted investments and infrastructure upgrades.

The statement reads, “On aviation enhancement, the focus is on the revitalization and modernization of major airports nationwide. Through targeted investments and infrastructure upgrades, major airports will undergo comprehensive refurbishment, including improvement in terminal facilities, runway expansions, and the implementation of cutting-edge technologies to enhance safety and operational efficiency.”

For agricultural infrastructure, the focus includes developing robust networks like storage facilities and irrigation systems.

In port revitalisation, the goal is to modernise facilities and attract investments to enhance Nigeria’s regional trade hub status.

“By modernizing port facilities and implementing advanced monitoring systems, the goal is to optimize efficiency, attract investments, and bolster Nigeria’s position as a regional trade hub,” the statement read.

Key road projects like Lagos-Calabar Coastal Road aim to enhance connectivity and stimulate economic growth.

Rail projects like Lagos-Kano and Eastern lines will modernise transportation networks for speed and reliability.

President Tinubu’s approval of the RHIDF absorbs the PIDF, expediting project delivery for Nigerians’ benefit.

Projects funded under the RHIDF will have a national spread, reflecting the commitment to equitable development.

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ICAO Aviation security audit team debriefs Nigeria, indicates strong outing

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The Team Lead of ICAO Security Audit Programme, Callum Vine, announced Nigeria’s strong performance during a debrief after its Audit.

Nigeria recently concluded the International Civil Aviation Organization (ICAO) Security Audit Programme the continuous Monitoring Approach (USAP-CMA) according to a statement emanating from Director, Public Affairs and Consumer Protection, FAAN, Obiageli Orah.

The USAP-CMA aims to improve aviation security compliance by analysing Member States’ performance and implementation of security standards. It focuses on Annex 17: Security Standards and Annex 9: facilitation compliance, along with associated procedures and security practices.

The event held at NCAA Headquarters saw Vine praise Nigeria’s robust policies and agencies, acknowledging their speed in addressing identified deficiencies without complaints.

He mentioned that the full audit report would be available within 60 days, followed by a 30-day period for comments.

FAAN’s Managing Director, Mrs. Olubunmi Kuku, affirmed using the audit results as a roadmap for continuous improvement.

She urged stakeholders to collaborate closely, share best practices, and uphold the highest security standards in the industry.

The debrief was attended by Dr. Emmanuel Meribole, representing the Minister, and Captain Chris Najomo, Acting Director General of NCAA.

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