The Nigerian aviation industry faces a complex interplay of challenges and opportunities, with domestic airline operators caught in the crosshairs. Professor Obiora Okonkwo, founder of United Nigeria Airlines and spokesperson for the Airline Operators of Nigeria (AON), has highlighted the significant burden imposed by multiple government charges, describing the situation as a nightmare. While acknowledging the positive impact of President Tinubu’s forex policy and the newly signed Cape Town Convention, Okonkwo stressed the urgent need for government intervention to address the stifling array of fees levied on domestic carriers. These charges, he argues, significantly erode profit margins and hinder the industry’s growth potential, placing Nigerian airlines at a competitive disadvantage against international counterparts who enjoy access to more favorable financing.
The multiplicity of charges from various government agencies, including the Nigerian Civil Aviation Authority (NCAA), the Nigerian Airspace Management Agency (NAMA), and the Federal Airports Authority of Nigeria (FAAN), constitutes a major obstacle for domestic airlines. These fees, coupled with the high cost of operations, create a challenging financial environment that limits expansion and investment in crucial areas such as staff welfare and fleet modernization. Okonkwo advocates for a streamlined and more equitable fee structure that reflects the realities of the Nigerian aviation market and fosters a more sustainable business environment for local operators. He believes that a reduction in these charges would not only improve the financial health of airlines but also contribute to the overall growth and development of the aviation sector in Nigeria.
Adding to the operational challenges are the unpredictable behaviors of passengers. Okonkwo lamented the increasing incidence of unruly passenger conduct, often triggered by flight delays and cancellations, issues that are not unique to Nigeria but are a global phenomenon. While acknowledging the frustration passengers experience, he emphasized the need for greater understanding and cooperation. Okonkwo suggested a public awareness campaign, in collaboration with the media, to educate travelers about their rights and responsibilities, fostering a more respectful and collaborative relationship between airlines and passengers. This initiative, he believes, would help mitigate disruptive incidents and improve the overall travel experience for everyone.
Okonkwo’s appeal to the government centers on two key areas: access to affordable credit and a reduction in the myriad of government charges. He argues that providing domestic airlines with access to single-digit interest rate loans is crucial for their competitiveness in the global aviation market. Currently, Nigerian operators face significantly higher borrowing costs compared to their international rivals, hindering their ability to invest in new aircraft, expand routes, and improve services. This disparity in financing options places Nigerian airlines at a distinct disadvantage, making it difficult to compete effectively with airlines that enjoy access to more favorable credit terms.
The forex policy implemented by the Tinubu administration has brought a welcome reprieve to the industry, according to Okonkwo. The previous difficulty in accessing foreign currency to meet international obligations had resulted in lost contracts, strained relationships with vendors, and damage to the reputation of Nigerian airlines. The new policy has eased these pressures, facilitating smoother transactions and restoring confidence in the international aviation community. This positive development is seen as a crucial step towards strengthening the Nigerian aviation sector and enabling domestic airlines to compete more effectively on the global stage.
The positive impact of the new forex policy is further reinforced by the signing of the Cape Town Convention, an international treaty that streamlines the process of aircraft leasing and financing. This agreement has helped to reduce operational costs and enhance the creditworthiness of Nigerian airlines, further boosting their competitiveness. Coupled with the improved access to foreign currency, these developments represent significant progress towards creating a more sustainable and vibrant aviation industry in Nigeria. The renewed confidence in the sector is reflected in United Nigeria Airlines’ expansion plans, which include the recent opening of new domestic routes and preparations for regional and international operations.
