Nigerian Civil Aviation Authority (NCAA) acting director-general Chris Najomo has cast doubt on the financial sustainability of the country's airlines, suggesting that a recent financial audit by the regulator indicates that "all airlines in Nigeria may go under," reports the country's Business Day newspaper.
Speaking at the South-West Regional Air Transportation Summit in Lagos on October 9, Najoma reportedly acknowledged that domestic airlines are facing significant challenges and that many are battling to remain operational. He emphasised the NCAA's commitment to supporting struggling carriers but not at the expense of safety standards.
Speaking at the same event, Abdulfatai Buhari, chairman of the Senate Committee on Aviation, announced the body was drafting a bill requiring Nigerian airlines to operate with at least four to five aircraft before commencing operations. This, he added, aims to tackle capacity issues, which are contributing to frequent delays and flight cancellations. In July 2023, the NCAA announced that Nigerian airlines would need to have at least six aircraft for scheduled services, starting January 2025, up from a previous minimum of three. The NCAA policy stipulates that out of the required six aircraft, at least four must be airworthy. If an airline has fewer than four airworthy aircraft, it is expected to ground its operations.
ch-aviation has asked several Nigerian airlines to comment on Najoma's statement.
"The NCAA should be more proactive in offering solutions and supporting the airlines, such as engaging in regulatory reforms that help airlines operate more sustainably rather than simply threatening to shut them down based on financial audits. The focus should be on creating a regulatory framework that fosters growth, competitiveness, and safety while allowing airlines to survive and thrive in a tough economic environment," commented Aero Contractors (N2, Lagos) CEO and Managing Director Ado Sanusi.
"If the NCAA concludes that most airlines have poor financial health, it points to a larger, systemic problem rather than individual mismanagement. Rather than placing the entire burden on the airlines, the NCAA and the Ministry of Aviation should investigate and address the underlying causes of financial instability."
He said these factors included:
- Multiple taxation: Excessive taxes and fees hinder airline profitability. Reducing these costs could improve operational efficiency and financial viability;
- A challenging operating environment: Economic issues like currency devaluation, high fuel prices, and infrastructure deficits complicate operations. Stakeholders should collaborate to enhance infrastructure and reduce fuel costs;
- Inadequate access to financing: Many airlines struggle to secure affordable financing for fleet maintenance and expansion, limiting growth and competitiveness. Policymakers need to improve access to credit; Macroeconomic factors: Inflation and foreign exchange volatility increase airline costs, particularly for fuel and maintenance. Government reforms are necessary to stabilise these expenses.
