Airline business in Nigeria is loss-making-Adefope
Chairman, HRG (Nigeria), and travel management
consultant, Mr. Femi Adefope has described aviation in Nigeria and by
extension, airline business in Nigeria and other places as loss-making, saying
that Nigeria is a tough country to do such capital intensive business.
Adefope who spoke at the APG IET DAY in Lagos at the
weekend noted that the carriers are using largely imported products
even with uniforms, adding that If the uniforms are properly made, they are
supposed to be fire retardant uniforms that are not manufactured locally.
He reiterated that the sector is being subsidized even
with deregulation of the industry like the subsidy in the petroleum downstream
sector.
He expressed the concern that many airlines are
operating in Nigeria today because of a lack of proper feasibility study and
based on the perceived success of other airlines.
His words, “People are not doing proper feasibility
studies before they venture into the airline business. Again, when you go to
borrow large sums of money, the interest rate is a lot. I am not querying how
people put funds together; there should be more cooperation between airlines.
There should be a local clearinghouse but because people don’t trust each
other, you can’t enforce anything because you do not have a national
identification card system here and that is one of the biggest drawbacks that
we have here”.
“People do certain things for the wrong reasons with
the government not obliged to subsidise Jet fuel because these things are paid
for in foreign currency and that is why foreign airlines are not complaining
because that is part of their costs because that is how they pay anyway. If you
look at our business set up, a lot of people are going into airline business
without proper business plans”, he stated.
Many of the country’s airlines lack
corporate governance coupled with lots of greed just as over-taxation has
equally been attributed to many factors bedeviling airline operations in the
country.
Adefope admitted that the travel industry has to a
large extent recovered 70 percent from the pre-COVID-19 era, stressing business
travel was the slowest to recover for obvious reasons.
“So far, to a large extent, the industry has
recovered. We are about 70 percent of where we were in 2019. Business travel
was the slowest to recover for obvious reasons. Technically we are still in the
pandemic because the World Health Organisation (WHO) has not declared the
pandemic ended because of the implications on employees but tourism has picked
up.
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