Nigeria’s aviation industry may be having deeper challenges than initially imagined in view of the N10.4 billion loss Medview Airline recorded in 2018. According to the recently released audited financial statement for the period ended December 31, 2018, Medview Airline made N10.4 billion loss after tax as against N1.25 billion profit after tax realised in 2017.
Gross revenue for the period fell sharply by 74 percent from N36.96 billion in 2017 to N9.56 billion in 2018. An in-depth analysis of its sources of revenue shows that the airline recorded significant drop in passanger traffic on both the domestic and foreign routes.
Traditionally has three sources of revenue which are hajj and cargo operations, domestic operations and international and regional operations, passanger traffic in 2018 fell by 63 percent in the hajj and cargo operations segment of its operations to N3.03 billion in 2018 from N8.25 billion in in the previous year.
Domestic operations were down by 75.5 percent from N14.85 billion in 2017 to N3.64 billion in 2018. International and regional operations witnessed 79 percent decline in revenue which fell to N2.89 billion in 2018 from N13.86 billion in 2017. On the average, the total revenue fell by 74 percent from N36.96 billion in 2017 to N9.56 billion in 2018.
“Med-View and the Leasing Company had over the years enjoyed a long-time partnership that had yielded close to $80m. But during the course of the London operations, the Aircraft that was leased to Med-View had an AOG (Aircraft On Ground) in December 2017. Accordingly, it resulted in Med-View re-protecting passengers at double/triple the price of the ticket on other carriers like Virgin Atlantic, British Airways and Air Maroc to mention but a few”, Sheik Abdul-Moshen Al-Thunayan, chairman, Medview Airline, said.
“The political tension and the uncertainties that surrounded the country in 2018 was a major factor in defining the year in review. The anti-graft war was also a contributing factor as all these political activities not only cripple the economy of the Country but also the standard of living of the Nigerian populace.
“The reduction of fleet due to C-Check in Med-View affected the possible upward growth of the revenue of the company. Thereby resulting in a record low profit. The lack of support and trust which Banks in Nigeria have towards aviation business did not help matters as none of the Banks approached was ready to take a risk”, Muneer Bankole, CEO Medview Airline said.
At half year 2018, passegner traffic at the nation’s airports rose by 24 per cent to 7.5 million passangers up from 6.05 million passangers in comparable period in 2017. Domestic passangers increased by 27 percent from 4.26 million at half year 2017 to 5.43 million passengers same period last year. International passenger traffic rose by 16 percent from 1.8 million travellers in 2017 to 2.07 million passangers in 2018 half year.
“It was not that passengers did not patronise our airports last year. The continued losses posted by Medview Airline may be due to factors perculiar to it and the general challenges local airlines are facing. The authonrities need to act fast to save local airlines”, an analyst who did not want his name in print said.
The manadatory maintenance of aircraft which usually takes place overseas is a sources of leakages to local airlines particually in an environment characterised by high foreign exchange volatility.
TELIAT SULE
