Averting possible crisis in Nigeria's aviation industry

The aviation industry in Nigeria has faced a tumultuous year, with challenges coming from every angle. Fubara Anga, a Partner at Aelex Group, highlighted the difficulties airlines are currently facing, including a sharp drop in revenue, limited access to foreign exchange, and increased operational costs. International airlines are reportedly facing obstacles in repatriating over $300 million due to foreign exchange restrictions, further straining their financial health. With fewer aircraft in service and various cost increases, the industry is grappling with a significant decline in performance. The Federal Airport Authority's decision to raise passenger service charges by over 100% and groundhandlers increasing their charges by 300% have added to the financial burden on airlines. These factors have created a challenging environment for airlines, threatening the stability of the entire aviation sector. Anga emphasized that policy decisions have exacerbated the industry's struggles, calling for urgent and radical interventions to avert an existential crisis. Amid these challenges, the Nigerian Civil Aviation Authority is conducting economic and financial audits on the remaining eight domestic airlines in the country to assess their financial health. Anga expressed concerns about the airlines' ability to pass the stress test, citing long-standing financial irregularities and obligations that have been ignored by carriers. The audit aims to provide an objective assessment of the airlines' financial viability and operational readiness. It will evaluate essential aspects such as insurance premiums paid in foreign currency, spare parts availability, and staff salaries. Anga underscored the critical importance of these audits to shed light on the industry's current state and provide actionable insights for regulatory authorities. However, he also called for a comprehensive audit across all industry operators, including groundhandlers and maintenance personnel, to address inefficiencies and policy-induced challenges. Anga stressed the need for a holistic approach to auditing to identify and rectify systemic issues that have plagued the aviation sector. He raised questions regarding the regulatory capacity within the Department of Air Transport Regulation and called for thorough assessments at all levels to ensure effective oversight and governance within the industry.