Aviation sector crisis deepens as forex scarcity threatens airline operations

Access to forex has been a major challenge within the business sphere as organizations have been searching for a way out of the quagmire.

While giving more details about the issue, Prof. Mike Obadan, a member of the Monetary Policy Committee confirmed that access to forex was a challenge in the country.

Due to the lingering forex scarcity in the financial system, some banks had started to ration forex as approval requests for Personal Travel Allowance and Business Travel Allowance to legitimate users have been greatly reduced.

The airlines have also, been severely hit as access to foreign exchange has stopped most airlines from carrying out maintenance checks on their aircraft.

Most of the airlines that have succeeded in taking their aircraft overseas for the C-check maintenance may have to wait for a long while until they are able to source forex to offset the maintenance fees before the planes can come back to the country and resume operations.

The implication of this is that an aircraft that has any fault which can only be resolved outside the country would be parked for a long while due to a lack of forex.

This will directly affect the passengers as they will now have to pay more for seats which will automatically be in high demand due to the lack of aircraft.

Apart from the forex scarcity, aviation fuel has been mentioned as one of the key reasons for the price hike in the aviation industry.

Speaking on the issue, a former CEO of Aero Contractors, Capt. Ado Sanusi, in a telephone interview with the PUNCH highlighted three main reasons why the price hike may eventually stay for a long while.

He mentioned the forex scarcity, the high price of aviation fuel, which is also dependent on the dollar rate, and the operators in the aviation sector.

Sanusi had advised the need for the industry practitioners to come together and take a decision on the price hike noting that overpricing the ticket was not a good idea.