By Chinelo Obogo
The Nigerian Civil Aviation Authority (NCAA) has said that forex scarcity, devaluation of the naira and high cost of aviation fuel have helped push the aviation sector into severe financial crisis.
Speaking to the media at the agency’s office in Lagos, NCAA chief executive Captain Musa Nuhu said domestic airlines were struggling with how to source foreign currency for their operations, how to source fuel and the devaluation of the naira which caused a decrease in passenger traffic and an increase in airfares.
He said, however, that relevant ministries are working hard to ensure that the problems facing the aviation industry are alleviated.
“This is a critical time due to the rising cost of aviation fuel and that is of serious concern to us. The Minister of Aviation and the Minister of Finance are making efforts to ensure that some form of relief can be obtained for the airlines for the sustainability of their operations. It really is a pathetic picture. We are not refining the Jet A1 in Nigeria and the conflict in Ukraine has caused a sudden increase in the price. At the same time, the naira is devaluing which is a double risk for the airlines they get all their revenue in naira and at the same time the dollar is not even easily available so this creates a huge problem for the airline. industry and we are currently facing a financial and economic crisis. But all relevant government organizations and stakeholders are working very hard to solve the problem. Overall, we ensure that that safety be the priority,” he said.
Reacting to the high cost of airfares, Nuhu said if airlines exceed a particular range, the agency should conduct an investigation to find out whether the price is reasonable or whether the airlines are involved in a practice that would compromise safety.
He said: “What the airlines do is they don’t give us a fixed price, they give us a range within which they can operate freely. But once it goes over the upper limit, they have to let us know, and we’ll have to do a reasonableness check of the airfare increase to find out. If we see that they have increased it, we will calculate the variables and find out if this is justified. Additionally, when they drop below the lower ladder, we review it and consider whether it is safe enough or whether they are involved in anti-competitive acts to drive opponents away.
Nuhu also denied reports that Max Air had been grounded and revealed that investigations into Dana Air, which was shut down for failing its financial audit, are still ongoing.
“With regard to Dana Air, we did the same financial audit and found a series of breaches that we were very concerned about. In the interest of public safety, we have decided to halt operations until the issues are resolved. The investigation is still ongoing as we want to give the airline the opportunity to resolve its issues. When all issues are resolved and we are satisfied, they will resume operations but for now they will remain grounded until we review their case. However, I am not aware of Max Air being grounded. If Max Air was grounded, I would be the first person to know, so nothing like that happened,” he said.