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NCAA reveals serious financial woes of local Airlines

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The Nigerian Civil Aviation Authority (NCAA) revealed that the regional commercial airlines are in serious financial problems and urgent action is needed to prevent an industry collapse.

Capt. Musa Nuhu, Director-General (DG) of the top regulatory agency, told reporters in Lagos that the twin problems of the fuel and foreign exchange liquidity crises had brought operators to a situation of “grave worry” and “sad” reality.

While reassuring that safety is still a top concern and cannot be compromised, Nuhu stated that steps are being made to prevent the sector’s collapse.

It was previously stated that due to a loss of fleet capacity, which had left operators with only 38 aircraft as of the weekend, the entire local sector might experience a blackout.

“Nobody has to tell you that these are very difficult times. We have done three (airlines) and are still on two or three, because we are taking them in batches. We also sit down to have discussions with the relevant management.

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“Right now, we have financial and economic crises. We don’t want it to cross over to become a safety crisis. That is why we are doing this to manage the crisis and find solutions to the crisis they (operators) are facing. That is why we are working round the clock to find solutions to the problem,” he said.

Results revealed that 60 out of the 98 listed aircraft were grounded while the eight active airlines operated at a combined fleet capacity of 38.77% while waiting for foreign exchange profits to cover maintenance costs.

The NCAA has begun financial and economic health checks of other airlines, Nuhu suggested, in addition to Dana Air and Aero Contractors, which had shut down due to financial problems.

The NCAA DG noted that Hadi Sirika, the minister of aviation, had been collaborating with the Airline Operators of Nigeria (AON) to find solutions to the currency crisis and alleviate the rising cost of aviation fuel, which is currently selling for an average of N1000/litre outside of the airports in Lagos and Abuja.

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Regarding the airlines’ request for a 5% Passenger Service Charge (PSC) waiver, Nuhu stated that while the NCAA was ready to assist the airline in getting out of trouble, the statutory charge was a matter for the National Assembly to address.

He continued by saying that it was impossible to discuss the current state of the aviation business in isolation from the economic context in which it functions.

The impact of having only 38 aircraft operational out of a total of 98, or 38.77% of fleet operating capacity, is most evident in the increase in passenger volume, the reduction in travel options, and the increase in prices.

“What is happening to aviation is happening to all sectors but air transport has become very critical now due to other challenges of travelling by road. But we cannot quantify the lives of human beings. So, with all these challenges, safety remains a priority and it supersedes all other considerations.

“NCAA is neither a police agency nor here to close businesses. On anything that affects safety, there will be no compromise. I will rather shut down an airline than allow them to operate unsafely.

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“The truth that it is a very difficult situation, but all parties, even up to the presidency, are working. All hands are on the deck to ensure that the aviation industry does not collapse. We have no choice than to keep aviation working,” he said.

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