Tuesday, August 30, 2011

Nigerian airlines face troubled times

In recent time, the nation’s aviation industry, which consists mainly of the airlines, has been in dire financial straits as the airlines are groping in the dark.

Any moment from now, more airlines may go down due to high operational costs threatening their operations, an analyst said during the week.

At the moment, the airlines are surviving on extra charges levied on passengers’ tickets as a result the skyrocketing price of aviation fuel, popularly known as Jet-A1, and other charges and problems arising from sundry issues in the industry.

Between September 2010 and June 2011, aviation fuel marketers increased the price of the commodity by over 100 percent, as a litre jumped from N80 per litre to over N180.

“Unfortunately, some marketers even deny us fuel. They can’t even supply us what we want and we have to adjust our flights. For instance, we need 500,000 litres a-day but the marketers can’t supply that because it is scarce, we need about 3.5 million litres in a week.

“Therefore, we can’t operate normally, we lose money. Although, we have a fuel dump but that is just for a few litres, it does not serve the purpose of all our flights,” Joseph Arumemi-Johnson Ikhide, Arik Air chairman, said when General Electric officials visited his company recently.

Already, the airlines have adjusted their fares to suit the increase, as one hour flight now attracts between N25, 000 to N30, 000, depending on the route, seat availability and other factors, this is a departure from the N19, 000 it used to be in November 2010.

“In fact, airlines don’t increase fares incessantly like the marketers do because they are dealing with passengers directly, they need to consider the pockets of the travellers otherwise, there will be no airline industry again,” said Muhammed Tukur, assistant secretary general, Airline Operators of Nigeria (AON), at a briefing when the marketers increased for the third time in four months last year.

To compound the problems of the airlines and passengers alike, the Federal Airports Authority of Nigeria (FAAN) suddenly increased Passenger Service Charge (PSC) from N350.00 to N1, 000 per ticket, at all the 21 airports, a situation stakeholders described as arbitrary because there was no notice of increase and the charges were even higher at older airports than the newly and privately built Murtala Muhammed Airport Terminal 2 (MMA2).

It cause a lot of confusion and embarrassment at the airports as many airlines refused to build the N1,000 charges into their tickets.

FAAN staff had to stop passengers at the boarding area to demand for N1, 000 PSC until the tickets were specially printed aside the normal passenger tickets. This act had led to brouhaha at the MMA2, after the operator, Bi-Courtney Aviation Services increased theirs from N1, 000 to N2, 500, claiming heavy cost of operations at the private terminal.

Of course, the airlines have to add this to their ticket charges as the fares kept increasing.

“We consulted all the airlines informed them of our new chares in order for them to adjust their systems, only Aero refused to add it to its tickets cost, their passengers were always accosted with the demand for N2, 000 at the ate. The passengers were not happy but there is nothing we could do because their airport is privately maintained”, an official of Bi-Courtney said.

Unfortunately, Stella Oduah, Aviation Minister halted it after two weeks of complaints and controversies.

Currently airlines have to carry out maintenance on their aircraft abroad in foreign currencies due to lack of functional maintenance hangar in Nigeria. For a long time, government had planned to build a national hangar to no avail as individuals like Aero and Bristow have thrive to have theirs but with limited maintenance status.

A to D checks (maintenance) are carried out on both Helicopters and aircraft. While on A and B checks can only be done in Nigeria, others (C and D) which are very expensive are done outside the country.

The C and D stages are the overhaul stages where the every part of the aircraft is removed for comprehensive checks one after the other, it is like getting a brand new aircraft all over again.

Experts are piqued that Nigeria, which boasts of the largest and most modern commercial aircraft fleet in West and Central Africa, has no Maintenance Repair and Overhaul ( MRO) facility. Usually, even the least of repairs are done abroad or by bringing in foreign experts. Harold Demuren, Director General of the NCAA thumbed down this situation and advocated that airlines facilitate joint minor repairs locally, rather than losing hard-earned dollars cheaply.

“Maintenance is a major aspect of flight operations that gulp a lot of money. You know that the high grades maintenance are not done in Nigeria, they are mandatory checks that have to be done in foreign currencies abroad and that is really impacting on the airlines”, an analyst says.

Arik Air, which has been toying with the idea of establishing one for some years, remains at the planning stage. Demuren pointed out recentlt at an Arik Air workshop that high cost of aircraft maintenance must be looked into for airlines to survive.

“For now, government needs to provide Arik Air with land to enable it build a hangar where aircraft maintenance could be done locally to reduce capital flight out of the country,” he said.

An aviation expert suggested that domestic airlines partner with foreign investors and MRO industry partners to build a world-class hangar that will be patronised by both domestic and foreign operators.

Apart from these albatross, they pay sundry charges like landing and parking charges to FAAN; pay ticket sales charges to NCAA and en-route and navigational charges to the Nigerian Airspace Management Agency (NAMA).

Source:  http://www.businessdayonline.com

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