by Tolu Omoyeni
In 2015, the Nigerian aviation industry contributed $685 million to the country’s Gross Domestic Product (GDP). The industry is a big employer of labour and also fosters our economic relations with other countries in the continent and beyond. But this year has not been good for the aviation sector in Nigeria as it is one of those that have severely suffered since the recession in the country began.
Here’s how it all began:
In May this year, domestic airlines started experiencing flight delays and cancellations owing to the scarcity of aviation fuel. Almost all the local carriers were affected and statistics at the time, according to the 2016 First Quarter reports showed that there were 8,478 cases of delayed flights by domestic airlines.
On the part of foreign airlines, forex was a major problem. United Airlines was the first to announce that it was cutting off its flights to and from Nigeria. Next was Iberia. The airline shut down operations in the country because less passengers were taking flights out of the country. The economic downturn was preventing more people from traveling abroad for vacations and business as it used to be. Air France, Etihad and Qatar also warned that they would pull out if forex situations didn’t improve. British Airways reduced the Lagos to London daily flights from two to one and resorted to a smaller aircraft. The value of the naira had significantly crashed at this time, these foreign airlines had funds to the tune of $575 million in CBN’s possession and it was difficult for them to repatriate these monies.
Then, the current situation:
Nigeria used to be the aviation hub of West Africa until Wednesday when it lost that status to Ghana. At the peak of the aviation crisis in May, there had been speculations that the airlines that cut ties with Nigeria had moved to Ghana. For all the obvious reasons, the cost of aviation fuel in Nigeria have shot up. Apart from the fact that it’s scarce, the foreign exchange is taking a toll on its importation. At the moment, Nigeria sells its aviation fuel at the highest price on the continent. Airlines are not able or willing to pay for this and would rather buy from Ghana where, as opposed to us, aviation fuel prices have been slashed by 20 percent. Airlines who take off from Nigeria have been reported to reroute to purchase fuel in Ghana before they continue on to their destinations.
Sadly, not only has Nigeria lost the aviation hub status, we have also been deprived of the revenue that comes from accommodating the crews of foreign airlines in the country. Ghana gets that privilege now.
Bringing back all that aviation industry has lost will be very difficult. We now have to think of effective and functional measures to lure these airlines back to the country, but only after we have found lasting solutions to our very many problems.