Why operating an airline business in Nigeria is unprofitable
Airline business may look appealing to invest in, but it is a bad idea in Nigeria.
Even though Nigerian airlines have been operating for years, they still have not been able to hack the secret of a successful airline business.
Some of these reasons are that overseas aircraft maintenance is expensive and a lot of expenses on the part of the airline despite the exchange rate.
Here are 5 reasons why airline business is not thriving in Nigeria.
1. Exchange rate
While Nigerian airlines earn their revenues in the local currency, the cost of maintenance is done in dollars which leads to huge losses on the part of the airlines. It is inevitable that this will lead to the shut down of airlines as most financial transactions like aircraft maintenance are done in dollars.
2. High cost of aviation fuel
The high cost of aviation fuel which is known as Jet A1 is not always available and when it is available it is too expensive. In some cases, trucks have to supply airplanes at the airport after transporting them from long distances which leads to inconveniences and delayed flights.
This problem is one that despite Nigeria’s wide air presence, still has not been solved.
3. Governments indifference
The government has been indifferent to the plight of airline businesses. While airline businesses are striving to make progress most government bodies have decided to ignore their efforts to help improve airline businesses in Nigeria.
4. Aircraft maintenance
Although in Nigeria Class A and B checks are run on aircrafts, Class C checks are not done within the country and aircrafts have to be checked abroad. This leads to more expenses on the part of the airlines and also there are a lot of cases of where a Class C check is being done and they find faults that were supposed to have been found during Class A and B checks.
5. Funds diversion
The aim of most of the operators in the industry is to make quick money and it leads to sole ownership with poor management structure; bad financial management and a behavioral pattern to divert the little profit into other ventures.
This has led to the collapse of many indigenous carriers such as Okada Air, Oriental airlines, Chanchangi, Air Nigeria, Sosoliso, Okada Air and among others.
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