Nigeria’s aviation sector in crisis as Arik downs operation

Arik Air, Nigeria’s biggest domestic airline, which also plies international routes, technically suspended operations yesterday, after insurance on its airplanes expired, and experts say this is one more signal that the country’s aviation industry is in deep trouble, even on the brink of collapse.
According to the airline’s management, “Arik Air, West and Central Africa’s largest airline has alerted all air travelers of a temporary disruption to its operations, pending approval of aircraft documentation related to insurance renewal.”
Other red flags signalling the dire state of Nigeria’s aviation sector include the grounding of Aero Contractors, Nigeria’s oldest existing airline, by the Nigerian Civil Aviation Authority (NCAA) on September1, for having only one aircaraft, contrary to the the NCAA’s regulations. Another domestic airline , First Nation, was likewise grounded, one day after Aero, and for the same reason.
Industy watchers say many of the country’s domestic airlines have aircraft stranded abroad where they were sent for maintenace because of difficulty in raising funds, as a result of the huge drop in the value of the naira against the dollar- which is the medium of payment.
Meanwhile, the country has virtually no functional repair hangars and operators must necessarily send their aircraft abroad for checks and repairs designated ‘Ato D’.
Experts list the challenges of domestic airlines as including funding, cost and access to foreign exchange , the impact of the economic downturn, unfriendly regulation, cost of aviation fuel, as well as poor and non existent infrastructure.
They further say that if the harsh economic situation continues, more airlines may go under causing many more job losses.
The state of the country’s aviation industry is further highlighted by the recent spate of power outages at the Murtala Muhammed Airport , Nigeria’s biggest and busiest airport and international gateway. The most recent power outage at the airport ocurred last Monday and lasted for several hours, leaving passengers and aviation workers anxious and fearful in pitch darkness.
Furthermore, international airlines are cutting down frequencies into Nigeria as a result of the economic downturn and the high exchange rate.
BusinessDay’s checks show that British Airways which formerlly deployed a Boeing 747 jumbo jet with a capacity of about 420 passengers, readjusted to the Boeing 777, which has a capacity of about 300passengers.
Also, Virgin Atlantic which flew the Airbus A340-600, with a capacity of 400 passengers, is now flying the Airbus A330-200, with 250passenger capacity .
Emirates, the United Arab Emirate (UAE) flagship carrier, has likewise reduced its frequency to Lagos from two daily flights to one.
This means the airline has on offer, less than its usual 598 seats to Dubai daily.
Kola Olayinka, Regional Commercial Manager West Africa, at British Airways, said, “Bristish Airways adjusted from flying Boeing 747 to flying 777 because we needed to face the realities of these times.
“Dollar scarcity is bringing about uncertainties to all businesses. $800m are in our banks that needed to be transferred. We were selling tickets at the rate of N197 to a dollar before it went up to N285 to a dollar.
“At this rate, for every $1million, we lost N80million. Some of the airlines could not survive and there were a lot of readjustments,” Olayinka added.
This is coming months after a United States carrier, United Airlines and Spanish carrier, Iberia pulled out of the country.
The management of Iberia said in a statement, “Iberia’s decision to leave Nigeria was in response to the difficult times and the inability of the airline to record high load factor as it used to do. The economic crunch bedeviling the nation had depleted the finances of those who otherwise would travel out of the country on business, tourism or leisure.”
The foreign carriers cited reasons of dwindling passengers as a result of low purchasing power and difficulty in repatriation of their trapped funds in Nigeria, among others as reasons for their decision.
A travel agent who craved anonymity told BusinessDay that Virgin Atlantic which formerly flew with full passenger loads out of Nigeria, now operates half empty.
The source went on to say the weekly flights have been reduced from five to about three weekly, as a result of low patronage.
Emirates closed reservation on one of its two daily Dubai – Lagos services, saying the afternoon flight EK781/782 would no longer be available for reservation.
Qatar Airways, Royal Jordanian Airline and Etihad Airways, are the three airlines that operate into Lagos from the Mid-East and United Arabs Emirates.
Out of all the airlines going to Dubai from Lagos, only Emirates operates direct flights to Dubai which is its base, while others such as Etihad, Qatar Airways, Kenya Airways, Ethiopia and Rwandair stop over at their countries before going to Dubai.