Botched airlines’ shutdown, Nigeria Air, others shaped aviation in 2022

The aviation industry in Nigeria was full of activities in 2022 amidst mixed feelings over lingering expectations, failed promises, and mixed targets that dominated the sector in the outgoing year. Over the years, air transportation in Nigeria has continued to wobble despite its strategic place as a major driver of economic development, and its contribution […]

The aviation industry in Nigeria was full of activities in 2022 amidst mixed feelings over lingering expectations, failed promises, and mixed targets that dominated the sector in the outgoing year.

Over the years, air transportation in Nigeria has continued to wobble despite its strategic place as a major driver of economic development, and its contribution to the gross domestic product (GDP) has remained abysmally low.

From the present meagre 0.5 per cent contribution to GDP, the federal government has promised to increase the contribution to 5 per cent with the implementation of the aviation roadmap which unfortunately has become perennially elusive.

Be that as it may, expectations are high and there is increased optimism ahead of next year as the government ups the implementation of the roadmap.

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Stakeholders started the year with high hopes and expectations after a partial recovery in the previous year from the COVID-19 pandemic. To many operators and stakeholders in the industry, the recovery witnessed in 2021 was incredible and they predicted a better 2022.

However, year 2022, according to stakeholders, was a marked improvement as several highly anticipated projects became reality even though the challenges confronting the sector remain.

Failed airline shutdown

As the year was just starting, the entire industry would have been brought to its knees following a threat by indigenous airlines, under the Airline Operators of Nigeria (AON), to shut down operations. This was due to the skyrocketing Jet A1 crisis which went all-time high in the outgoing year, shooting up the airlines’ cost of operations.

In a letter by its president, Alhaji Abdulmunaf Yunusa Sarina, to the minister of Aviation, Senator Hadi Sirika, which was also copied to the director-general of the Nigerian Civil Aviation Authority (NCAA), AON said, “Overtime, aviation fuel (JetA1) price has risen from N190 per litre to N700 currently. No airline in the world can absorb this kind of sudden shock from such an astronomical rise over a short period.

“While aviation fuel worldwide is said to cost about 40% of an airline’s operating cost globally, the present hike has increased Nigeria’s operating cost to about 95%. 

“In the face of this, airlines have engaged the federal government, the National Assembly, NNPC and oil marketers with the view to bringing the cost of JetA1 down which has currently made the unit cost per seat for a one hour flight in Nigeria today to an average of N120,000.”

The decision to shut down was coming after the operators had increased the cost of a one-way ticket to N50,000 in February, making it difficult for many Nigerians to fly.

However, the intervention by the federal government and the National Assembly saved the day as the operators were given some windows of getting fuel to sustain their operations, but the problem has persisted as aviation fuel price has since doubled from N400 per litre which it was sold at the time the airlines threatened to shut down.

MMIA new terminal

In March this year, the Murtala Muhammed International Airport (MMIA), Lagos, the biggest airport in Nigeria witnessed the opening of a new terminal, 40 years after the airport was opened with the existing terminal already dilapidated and unable to cope with the current growth of activities in the airport.

President Muhammadu Buhari on March 22 commissioned the new airport terminal, a state-of-the-art facility, which changed the face of the airport and significantly improved passenger experience.

The new terminal has 66 check-in counters, five baggage collection carousels, 16 immigration desks at Arrival, 28 at Departure, eight security screening points, six passenger boarding bridges with remote boarding and arrival.

Other facilities include two food courts, four premium lounges, 22 guest rooms and spars, 16 airline ticketing offices, visa on arrival and port health facility, praying areas, more than 3,000sqm duty free spaces and over 5,000sqm let-table utility spaces.

But almost a year after, the terminal is still under-utilised as many airlines could not relocate there due to the size of the apron which couldn’t accommodate many wide-bodied aircraft while the government is yet to actualise its promise to expand the apron after demolishing some structures including the former corporate headquarters of the Accident Investigation Bureau (AIB) close to the terminal.

Kaduna Airport Attack

The Kaduna International Airport in March this year came under attack from bandits leading to the suspension of flights by Azman Air, the only airline operating to the airport.

The attack also led to the death of a security staff of the Nigerian Airspace Management Agency (NAMA) who was reportedly shot by bandits.

The staff identified as Shehu Na Allah was attached to the VHF omnidirectional range (VOR) site of the Kaduna Airport. The airport has since the attack, remained with little or no activity as only Azman Air currently operates to Kaduna Airport.

Airlines’ exit and return

In the year under review, the airline industry experienced a major boost with the birth of a new airline, ValueJet, even as existing ones increased fleet and expanded routes.

But prior to the arrival of ValueJet, two major domestic airlines, Aero and Dana Air suspended operations. The Nigeria Civil Aviation Authority (NCAA) suspended the AOC of Dana Air after an audit of the airline.

Also, Aero Contractors on its part willingly suspended flight operations over a cash crunch. The temporary exit of the two airlines limited seat capacity in the industry while the gaps were explored by other airlines through imposing high cost of tickets as the demand was high. But the two airlines are back in the air as they have since resumed operations.

Similarly, one of the domestic airlines, Azman Air, had its license temporarily withheld over alleged indebtedness to the tune of N1.2bn. This was after the NCAA had read a riot Act to the airlines over non-remittance of outstanding N19bn accrued from the ticket sale charge and cargo sale charge (TSC/CSC).

The runway 18L miracle

Despite the challenges the industry has faced in the outgoing year that would dovetail into the New Year, the completion of installation of airfield lighting (AFL) at the domestic runway of the MMIA was a great reprieve for the operators.

For the past 14 years, the operators had agitated for the installation as they have been using the runway without the AFL which allows aircraft to take off and land at night, while arriving flights had been landing at the international runway anytime from sunset.

Operators usually consume more fuel when aircraft taxied to the domestic terminal after landing at the international wing at night.

The Federal Airports Authority of Nigeria (FAAN) had shut down the runway on July 7, 2022 for 90 days to install the equipment comprising approach lights, runway lights (Threshold and Centre, edge light) and others so that it can return to full 24/7 operations.

However, after three months and three days, the runway was reopened and the airlines have started enjoying it.

Ground handling support

In the year under review, the ground handling support sector also witnessed a boost as the main operators – the Nigeria Aviation Handling Company (NAHCO) Pls and Skyway Aviation Handling Company (SAHCO) PLC took delivery of several ground support facilities.

Just in December, SAHCO acquired Universal loaders, tractors, container dollies, canopied passenger steps, conveyor belt loaders and air starter units.

The new Universal loaders which were manufactured by French Ground Support Equipment (GSE) maker, AirMarrel in France, are 7,000 ton lower and main deck loaders.

Airlines’ trapped funds

As the year 2022 winds down, there is an ongoing strained relationship between the federal government and foreign airlines operating in Nigeria over their inability to repatriate their ticket funds.

In line with the bilateral air service agreements (BASAs) signed with the foreign airlines, they are expected to sell their tickets in naira while they would be provided the dollar equivalence by the country’s central bank to repatriate. But funds’ repatriation in recent times has been a hard nut to crack as many foreign airlines are unable to repatriate their funds which continue to grow as airlines’ tickets are sold on an hourly basis.

On the basis of this, Emirates, one of the foreign airlines, stopped flights to Nigeria while other airlines are said to be considering the same option as the funds have grown to about $600m. Though the government has promised to clear the trapped funds, the International Air Transport Association (IATA) representing the airlines has continued to put pressure on the government.

Nigeria Air

The establishment of the national carrier, Nigeria Air, has missed several targets and timelines, but the government has remained determined to float the airline this year by selecting Ethiopian Airlines as the technical partner. President Muhammadu Buhari also promised that the airline would take to the sky this December but the take-off has been stalled by the suit filed by the Airline Operators of Nigeria (AON) challenging the decision to name ET as the only bidder.

The case has been adjourned to January 2023 but until then the take-off of the national carrier remains uncertain.

Like Nigeria Air, the Airport Concession is also a subject of litigation as one of the bidders has taken the federal government to court challenging the process.

So far there has been uncertainty over the implementation of the Aviation Roadmap which has other projects like the MRO, Aviation Leasing Company, Aerotropolis, among others. It was not clear whether the present government would be able to achieve the projects before its tenure runs out.

New Civil Aviation Act

But in terms of policy implementation, the passage of the new aviation act into law has been described as a major leap in the efforts to upgrade Nigerian aviation. For instance, the NCAA now has a new Civil Aviation Act which repealed the 2006 CAA and addressed various developments in global aviation since 2006.

Similarly, the Accident Investigation Bureau (AIB) has transformed into the Nigeria Safety Investigation Bureau (NSIB) with its activities now covering the rail, marine and road transportation sub-sectors. Analysts say the new acts of all the agencies would reinvigorate them and improve their performance.

Experts speak 

Mr. Olumide Ohunayo of the Aviation Roundtable lauded the performance of the domestic airlines in the year under review, and the airfield lighting installation but said the failure to achieve the roadmap is a minus for the industry.

“With the roadmap that has not been achieved, I doubt if we will get any genuine investors when the government is almost on its way out,” he said.

Capt. Ibrahim Yunusa, an aviation analyst said, “I believe we are on the right track considering the new Civil Aviation Act 2022 in place. The policy will surely take care of almost all the aviation issues.”