Dana Air refund process to “take a while” as airline faces liquidity crisis – NCAA

Passengers awaiting refunds from the grounded Dana Air may face a prolonged wait, as the Nigeria Civil Aviation Authority (NCAA) reveals the airline is currently battling a severe liquidity crisis.

Michael Achimugu, the NCAA’s Director of Public Affairs and Consumer Protection, addressed the growing frustration of travelers on Monday via his X handle. His statement provided an update on the status of the embattled carrier and the fate of trapped passenger funds.

“I have never been ambiguous about the Dana issue. That airline is suspended. They are not liquid to pay refunds at the moment. There are hundreds, if not thousands of passengers affected by this case. While I can empathize with you, the solution to this case is going to take a while. You have not been abandoned, I assure you. This is just one of those cases that take time. Apologies, sir,” he said 

The suspension has left many passengers in uncertainty. These travelers have been seeking refunds since the federal government and the NCAA indefinitely suspended Dana Air’s Air Operator’s Certificate (AOC) in April 2024.

The regulatory crackdown followed a runway excursion incident at the Murtala Muhammed International Airport in Lagos, which triggered a comprehensive audit of the airline’s safety standards and financial health.

The admission of “illiquidity” confirms long-standing rumors regarding the carrier’s financial instability. Since the April 2024 grounding, Dana Air has reportedly struggled with operational stagnation, with its fleet grounded, the airline has no steady revenue stream to offset its mounting liabilities.

Staffing reductions, reports suggest significant layoffs as the company attempts to downsize in the face of an uncertain future.

Regulatory scrutiny, this is not the airline’s first brush with regulators; it has faced multiple suspensions since its inception in 2008, including a major grounding following a fatal crash in 2012 and subsequent audits in 2022 and 2023.

Despite the grim financial outlook, the NCAA official sought to reassure the public that the regulator is monitoring the situation. Achimugu emphasized that the complexity of the liquidation and audit process means there is no “quick fix” for those seeking their money back.

For now, affected passengers are advised to keep records of their bookings and formal refund requests as the NCAA continues its oversight of the suspended carrier. No specific timeline has been provided for when the “liquidity crisis” might be resolved or when the refund process will officially resume.