Major Airways Set to Leave Nigeria Soon, Here Are What You Need to Know
Written by admin on December 9, 2023
Major Airways – The Central Bank of Nigeria has been cautioned by the International Air Transport Association (IATA) regarding the potential departure of certain foreign airlines from the Nigerian markets. This warning stems from the existing challenge of $792 million in ticket revenue currently inaccessible within the country.
Kamil Alawadhi, the IATA Regional Vice President for Africa & Middle East, conveyed this message during a media presentation held with African journalists at the IATA Global Media Day in Geneva, Switzerland. Read more Legit
High cost of operations in Nigeria Regarding the aviation landscape in Nigeria, the head of IATA expressed concern, citing challenges such as a 25% interest rate on loans, elevated airport taxes, and insurance premiums six times higher than the global average.
Amid foreign airlines seeking the repatriation of their trapped funds, a minimum of four local airlines possess funds surpassing $54 million currently held within the CBN. Alawadhi emphasized that these factors collectively make it challenging for Nigerian airlines to achieve profitability. He further noted that any airline operating outside of Nigeria incurs lower operating costs and offers more competitive prices compared to domestic Nigerian airlines.
He said: “Nigeria has two most expensive airports; their fuel is higher than elsewhere in the world, and insurance is six times more expensive than anywhere else in the world. The interest on loans is 25%. It is ridiculous. It is the highest interest I have ever seen. “When you set up these airlines, you are already disadvantaged. Any airline in Nigeria operating outside of Nigeria has a cheaper operating cost and better prices than Nigerian airlines. You can see why it is difficult for African airlines to make a profit.”
He further stated that IATA is actively investigating the reasons behind the elevated operating costs and is taking a step-by-step approach to address each issue. The organization is focused on finding ways to reduce these costs with the ultimate goal of enhancing the profitability of airlines.