Depleting airlines’ fleets trigger spike in local airfares
The number of serviceable aircraft in Nigeria’s indigenous carriers’ fleets has significantly decreased, resulting in a steep increase in airfares on local routes. Domestic flight fares now range from N92,000 to N250,000 for a one-hour flight, depending on the booking time. The Lagos-Abuja route, Nigeria’s busiest, exhibits the highest fares, with passengers encountering exorbitant prices when attempting to book days in advance. Other routes, including Lagos to Asaba, Benin, Ilorin, Port Harcourt, Uyo, Calabar, Yola, Maiduguri, Kano, are similarly affected.
The National Bureau of Statistics (NBS) reports that domestic flight tickets’ average price increased by over N79,011 within a year. According to the NBS’s 2023 Transport Fare Watch report, airfares rose by 21.48% year-on-year from N65,041 in August 2022 to N79,011.38 in August 2023. As a result, many passengers are reevaluating their travel plans, opting for essential travel only or considering alternative transportation modes.
Escalating Challenges
The high demand for air travel persists despite rising fares due to the speed of air travel and security concerns in some regions. However, passengers are increasingly frustrated by the difficulties in securing limited seats on the dwindling number of serviceable aircraft.
Experts warn that airfares will continue to rise unless airlines can expand their fleets. However, several factors, including fluctuating exchange rates, rising operational costs, increasing insurance premiums, and limited access to capital, hinder fleet expansion. The Nigerian Civil Aviation Authority (NCAA) is conducting technical and safety audits on airlines such as DANA Air, NG Eagle Airlines, Rano Air, and AZMAN Air, contributing to the temporary grounding of several aircraft.
Capacity Issues and Fleet Reduction
The absence of some carriers has created capacity issues for other operators, including Air Peace, Aero Contractors, Ibom Air, Overland Airways, Green Africa Airways, Value Jets Airlines, Arik Air, Max Air, Rano Air, and United Nigeria Airlines. Regulatory data indicates that the total number of aircraft in existing carriers’ fleets is around 91, including those in flight, storage, or undergoing major repairs.
A few years ago, the domestic fleet hovered around 120 aircraft. Between 2015 and 2023, the number of aircraft—private/charter—in the NCAA registry rose from 175 to 358. However, not all 358 aircraft are serviceable, as some are stored, repossessed by lessors, or no longer in business. The increasing number of airports, which has grown from 27 to over 40, exacerbates the issue.
Industry Challenges
The Airline Operators of Nigeria (AON) have consistently urged the Federal Government to address the myriad challenges facing the industry. Prof. Obiora Okonkwo, AON spokesman and Chairman of United Nigeria Airlines, highlighted issues such as fund scarcity, naira devaluation, forex inaccessibility, expensive aviation fuel, multiple taxation, lack of maintenance facilities, an unfriendly business environment, and unpopular government policies.
In recent months, only a few airplanes have been deployed to serve domestic routes as Nigerian airlines struggle with fleet reduction due to high maintenance costs. Some airlines have grounded their aircraft due to the inability to afford maintenance, further reducing available planes for passengers. Investigations reveal that Nigerian airlines and private aircraft owners spend at least $2 billion annually on fleet maintenance abroad. In 2022 alone, a major carrier spent over N76 billion on overseas repairs.
High Insurance Premiums
Nigerian carriers face higher insurance premiums due to the country’s perception as a high-risk operating environment. While Nigerian airlines pay 8% to 10% of an aircraft’s value for insurance, operators in Ghana, South Africa, and other African countries pay 2% to 3%. European and American airlines pay 0.5% to 1% for the same aircraft type. Nigerian airlines pay an average of $1 million annually to insure a B737-300 aircraft, compared to $200,000 to $300,000 for the same aircraft in Ghana or the US.
Financial Constraints and Blacklisting
Aero Contractors Managing Director Captain Ado Sanusi noted that financial instability and foreign exchange volatility threaten local airlines’ existence. The blacklisting of Nigerian airlines by lessors has led to Aircraft on Ground (AOG) situations, where planes are temporarily out of service due to repairs or parts replacement. Nigerian carriers also struggle to acquire aircraft on dry lease terms due to lessors’ reluctance to engage long-term with them.
The Call for Government Intervention
Top Brass Aviation Limited CEO Captain Roland Iyayi emphasized the urgent need for government intervention. He revealed that a domestic carrier has 13 aircraft stuck at maintenance facilities worldwide due to a lack of forex. Despite depositing $14 million worth of naira with the Central Bank of Nigeria (CBN), the operator has yet to receive the dollars, resulting in a 30% operational fleet reduction and schedule unreliability.
Iyayi suggested that the government declare a state of emergency in aviation. He warned that if the situation continues, the domestic market’s fleet size might drop by 35% to 50% within the next three months, leading to further increases in airfares.
