Airlines Cry Out: Forex Scarcity And High Fuel Prices Threaten Operations

Airlines Cry Out: Forex Scarcity And High Fuel Prices Threaten Operations

Airline Operators of Nigeria (AON) are sounding the alarm over a confluence of challenges jeopardizing their operations, including the scarcity of foreign exchange (Forex) and the skyrocketing price of aviation fuel, now hitting N1,300 per litre…..READ ALSO Fuel Prices Soar In Cameroon After Nigeria Scraps Fuel Subsidy

These issues, compounded by difficulties in acquiring aircraft due to country risk factors, are posing existential threats to the industry.

The AON, in a statement, urged urgent intervention from the Federal Government, highlighting the grounding of aircraft due for maintenance and the inability to ferry them overseas due to Forex scarcity.

Professor Obiora Okonkwo, spokesperson for AON, expressed grave concerns, warning that if left unchecked, the country could face a shortage of operating aircraft for domestic services. He emphasized the critical need for airlines to receive special allocations of dollars for survival, as foreign currency is essential for purchasing aircraft and maintaining fleets.

Okonkwo outlined the multifaceted challenges faced by airlines, noting that they are incurring losses due to factors beyond their control. Rising costs across the aviation ecosystem, including increased charges from handling companies and airports, coupled with reduced passenger traffic, are exacerbating financial strains on airlines.

The statement underscored the role of air travel as a catalyst for economic development and called for government engagement with airlines at various levels to address the crisis. It lamented the lack of special Forex allocations for airlines, forcing them to compete with traders in the open market.

The dire situation has prompted some airlines to teeter on the brink of collapse, with diminishing equipment and revenues being channeled towards lease payments. Despite meeting standard criteria, Nigerian airlines face skepticism from aircraft owners due to country risk factors, hindering fleet expansion efforts.

The AON revealed that while some airlines have deposited funds with the Central Bank of Nigeria (CBN), they are unable to access the necessary dollars for critical operations. Urgent action is needed to alleviate the industry’s plight and prevent further deterioration of Nigeria’s aviation sector.