There should be special Forex window for airlines, says Oknokwo
When flight operations resumed last July after weeks of COVID-19 lockdown, the major industry worry was low passenger patronage. Demand did go on a roller-coaster and when it stabilised, another problem emerged – insufficient fleet capacity to ferry waiting passengers.

The tell-tale signs of low capacity could be felt at airports nationwide, either as flight delays or cancellations. Or both on the same day! Except for the first set of morning flights, almost all flights are delayed and much to the pain of air travellers.

A frequent traveller, Abdul-Hakeem Olapade, shared his experience. “It was an Abuja flight from Port Harcourt recently. I had the option of going by road but given the security concerns and urgency of the trip. That flight was delayed for three hours, not knowing that the flight would get cancelled. Just like that. Who does that? I slept at the airport that night.”

Titilayo Akindele bought a late afternoon Lagos-Asaba ticket. “The flight was delayed for about two hours but we took off and headed to Abuja. From there, it landed in Benin. The crew said they were sorry. They would not be able to continue and dumped us all at the Benin Airport. It is that bad.”

A top official at one of the airlines reckoned that the “ugly narratives” are regrettable and uncharacteristic of modern aviation. He, however, reasoned that they are all indications of the torrid times currently faced by airline operators.

Specifically, local airlines are in dire straits on account of depleted fleet capacity. While unserviceable aircraft are either on ground or stuck at maintenance facilities overseas, scarcity and the high cost of naira-to-dollar exchange rate readily disrupt airlines’ access to spare parts and other obligations on schedule.

Industry experts are just as disturbed as customers. They offered that the Federal Government, regulators and operators should have a workable solution to bottlenecks in the industry. Among others, they sought priority for a special Forex window for aviation and urged airlines to embrace pragmatic route planning to ease passenger discomfort.

Stuck or grounded
Local aviation and flight delay are not strangers. Before COVID-19, at least an average of two in every five flights had minimal delays that are often couched as “operational reasons”.

The frequency of delayed flights in the air travel sector reached a new height in the first half of 2018 with a total of 19,323 flights delayed in Nigeria.

Though there is no official record yet to glean from, evidence abounds that flight delays are now more regular despite the reduction in patronage and flight movements in the age of pandemic.

The major constraint is the significant drop in the number of airplanes in operation. Though a new airline recently added to the mix, some of the major airlines have several airplanes on the maintenance queue.

Carriers like Aero Contractors, Arik Air, Azman, Dana Air, Air Peace, and Max Air all have aircraft in Maintenance, Repair and Overhaul (MRO) facilities within the continent, America, Middle East and Europe.

Med-View Airline has two of its aircraft in Europe on maintenance course even before COVID-19. They are yet to return to date.

Kenneth Ani, an engineer in the industry said the COVID-19 effects were beginning to tell on airlines. “It is sad that we are all feeling the pinch this way and I pity some of the operators. What has happened is that all aircraft overseas are also affected by the lockdown.

“It means no facility or engineers will spend man-hours on your packed aircraft. So, the longer they prolong lockdown in those countries; the more we are affected here despite not being on lockdown. It is a ripple effect. That is why I said we should feel sorry for the airlines at this time,” Ani said.

OnyemaAir Peace airline has the largest share of the local operation, and perhaps the worst hit by the depletion. The Guardian learnt the airline is expected to return three additional planes on March 17, in June and July, to normalise operations.

Chairman of the airline, Allen Onyema, said the telling-effect was more, partly due to earlier issues in the local business environment, and then the devastating pandemic.

Onyema said: “Before the pandemic, the industry had its challenges that were not caused by us (operators), but by our environment. We don’t manufacture even a pin in the entire components of an aircraft. Even the rug laid on the floor of a plane is not made in Nigeria. It is a highly regulated industry, which means everything about us is imported.

“Now enters the COVID-19 pandemic. Planes were parked for about seven months. Within those months, insurance must be paid, and maintenance must be made. Let me paint a scenario. Before the pandemic, Air Peace had six of its aircraft out of the country on C-checks. Because of the pandemic and attendant lockdown, the MROs were closed without maintenance going on.

“These planes are yet to return to our operations. It was a force majeure. So, you don’t blame them (MROs). Meanwhile, C-checks here are done by the calendar. In 18-month after, you are going for another C-check whether you used the aircraft or not.

“In the last couple of months, other planes have become due for maintenance overseas. Yet, several of these countries went on lockdown. That is a problem for the Nigerian operator. Abroad, they are close to the MRO. They would just go there and have it done and even in phases. In Nigeria, we have to do everything at the same time. Yet, we don’t have the planes back on schedule because of coronavirus,” Onyema said.

Forex scarcity
Besides the unfortunate pandemic, the constraint of getting forex to meet timely payment obligations is also a huge factor militating against smooth operations of domestic airlines.

Chairman of the United Nigeria airline, Obiora Okonkwo, observed recently that aviation is almost 100 per cent dependent on dollars, which are now hardly readily available for operators.

“I think there must be a special window for the airlines. Because, today, if the bidding process goes through the bank every two weeks, you have to wait for two weeks though you already have spare parts to pick immediately. You need $100,000, but you get $10,000.

“So, there must be a special funding process to support the airline business because almost 99.5 per cent of the volume needs to be paid (in dollars), and your ticket sales are in Naira. You are not even allowed by the policy to receive payment in foreign currencies. I think that a lot has been done (for the industry) but more can be done to make it better,” he added.

EmefieleThe Chief Executive Officer (CEO) of Arik Air, Capt. Roy Ilegbodu, said it was almost impossible for the airlines to cope with a 40 per cent spike in exchange rate amid COVID-19 realities.

Ilegbodu said: “We still face significant challenges going forward, though we are still grappling with them. We have challenges of foreign exchange. That is one big issue. You would realise that our industry is tied to the supply from outside Nigeria. To support an aircraft with spare parts, you need all sorts coming in. So, significant sums of money are spent on maintenance. The airplanes on a daily basis must be maintained. You can’t compromise maintenance of aircraft.

“Take tyres on an airplane, for instance, some people don’t realise how regularly we change those tyres. You can’t use an aircraft tyre the way you use your car tyres. You have to change them regularly whether they look old or not. So, quite a lot goes into operations than we have control over. And a little delay affects the entire operation,”x

Imperative of support and cooperation
Chief Executive Officer (CEO) of Belujane Konsult, Chris Aligbe, said challenges facing the airlines persevered because they did not speak in unison.

Aligbe acknowledged the fact that forex had been a major challenge threatening the existence of operators in the system in recent times. He advised the carriers to, through the Airline Operators of Nigeria (AON) and Ministry of Aviation, schedule a meeting with the Ministry of Finance and the Central Bank of Nigeria (CBN), where the current challenges could be discussed and addressed.

He said: “There is a gap in the association (AON) at the moment. Nobody seems to be speaking for the airline sub-sector, which is very bad for the airlines. They cannot complain about this individually; they should go together. Yes, the impact of forex on the airline is always deeply felt. But it appears the people who are controlling the finance of the government like the CBN and Ministry of Finance, don’t seem to know what aviation is suffering. They don’t seem to understand the sector.

“The airline sub-sector needs a central voice that can talk for them. The airlines should become a member of Chambers of Commerce. The Chambers of Commerce can approach the government to present airlines’ challenges on the front burner.”