Nigerian Currency

Naira devaluation hits domestic airlines

 

The recent devaluation of the nation’s currency against the United States dollar has taken heavy effects on the domestic airline industry as costs have increased drastically due to aircraft leasing, maintenance, landing, parking and catering fees among several others that are paid in dollars.

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Nigeria Currency

The situation has made airlines, pressure groups and unions to make calls on the Federal Government to save the situation before the airlines begin to go under.

The President, Aviation Round Table, Captain Dele Ore, in a briefing on Wednesday said that the current global financial crisis had made the situation worse, urging the Federal Government to save the nation’s carriers from collapsing.

Ore explained that naira devaluation took a hard toll on the local airlines because their incomes are being generated in naira whereas majority of their expenses were in dollars.

He said, “Due to the recent depreciation of the naira against the dollar, expenses of the airlines have increased given that services such as leasing of aircraft, landing fees, catering to mention but a few are made in dollars.”

“Airlines are capital intensive and we don’t know of any airline operating in this country that is not heavily indebted to banks.”

According to him, the problems were coming at a time local airlines were battling with skyrocketing prices of JET A1 also known as aviation fuel in the country.

Local airlines under the aegis Airlines Operators of Nigeria had on Tuesday met with National Assembly over the soaring price of aviation fuel in the country at a time crude oil price was falling in the international market.

Ore asked the Federal Government to find solution to the matter just as he also called on the government to empower the airlines by creating Aviation Support Fund.

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