Crash-landing looms for Nigeria’s aviation industry
Badly hurt by the recession and a dollar shortage that has led to a lack of fuel, Nigeria’s aviation industry must now contend with the planned closure of Abuja’s only airport for repairs to its runway that will take six weeks
Nigeria’s federal government says the only airport in the country’s capital, Abuja, will be shut for six weeks to allow for the reconstruction of its potholed runway.
Minister of aviation Hadi Sirika says the facility will be closed to allow the midsection of the runway to be completely rebuilt. Flights will be diverted to Kaduna state, 210km by road from Abuja.
The decision has sparked criticism from citizens who object to the closure in an age where modern engineering makes it possible for maintenance work to be done on runways while the airport is still in use.
It has also highlighted the struggle that local and international airlines face in the midst of a tough local recession and a volatile currency situation. Investor confidence has all but drained away.
Nigerian authorities say the entire structure of the runway has failed. It was designed to operate for 20 years, but it has been in use for 34 years, making it a
The Abuja airport, Nigeria’s second busiest after the Murtala Muhammed International Airport in Lagos, handles 5m passengers a year. For Nigeria’s army of government officials and civil servants who live and work in the capital, it is indispensable.
Analysts estimate that as much as 20%-25% of business activity could be disrupted, at great cost to Nigeria’s economy. Furthermore, the Lagos-Abuja route has been lucrative for local airlines, which have struggled to survive in an environment of rising costs and a decline in business due to the
Local operators are struggling to pay their debts and this has caused disruptions to operations.
Last year, the country’s oldest airline, Aero Contractors, halted operations for four months to carry out internal restructuring. Another airline, First Nation, briefly halted operations in September (apparently due to a lack of planes). Arik Air, Nigeria’s largest carrier, operates local and international routes but has also faced challenges. It temporarily halted operations in September due to delays on an agreement to renew aircraft insurance.
The airlines have also been affected by a shortage of dollars, which they use to pay for imported jet fuel. Major fuel companies such as Total, Sahara and ConocoPhillips are said to have nearly doubled their prices
These developments have bolstered the argument for comprehensive reform of the industry. However, local airlines find themselves in crisis barely six years after a government intervention fund worth N120bn (R5bn) was released to the industry.
Government has spoken of its plan to launch a new national carrier and create concessions at its 21 airports, but there is little sign that it has designed a comprehensive policy.
International airlines are also affected. Nigeria’s foreign-exchange problems have made it difficult for them to remit funds. By June last year, the International Air Transport Association said foreign airlines had US$575m stuck in Nigeria.
Several airlines, including Iberia and United Airlines, pulled out, while others such as Emirates Airlines and Kenya Airways suspended operations from Abuja due to the depressed business environment.
A shortage of jet fuel has also led to fears that planes may be grounded. Airlines have been flying with extra fuel or refuelling at newly added stopovers outside the country.
The situation eased slightly following the Nigerian Central Bank’s concessionary sale of dollars to the airlines after it allowed the naira to weaken last year, but a large amount of the airlines’ funds remains stuck in the country.
As the shutdown of the Abuja airport looms, operators are wondering nervously if 2017 will be even worse for them than the dreadful year that has just ended.