Foremost Aviation analyst, Capt. Alex Nwuba, has said three more airlines may go under before the end of the year as a result of the current challenges facing the industry.
Nwuba, who is the National President, Aircraft Owners and Pilots Association, while featuring on Trust TV, also said the proposed National carrier, Nigeria Air, will not perform any magic in terms of addressing the depleting capacity of the domestic airlines.
Daily Trust reports that the airline industry is currently on the edge of the skyrocketing price of aviation fuel known as Jet A1 and the rise in foreign exchange rates.
Two domestic airlines – Aero Contractors and Dana Air are on temporary exit, thereby creating gaps in the domestic market even as other carriers are struggling to survive.
Speaking on Trust TV, Nwuba said while the airline industry is not immune from the challenges of the global economy, the aviation sector is in a very dire situation.
He said government must put in place short term measures like downward review of taxes and charges like the ticket sale charge (TSC), Passenger Service Charge (PSC), fuel tax, among others to ameliorate the challenges of the airlines.
According to him, while the short term solutions help, they do not in anyway eliminate the problems.
“The problems are much more fundamental and need to be addressed much more fundamentally.”
“Everything helps. The 5 percent helps, PSC reduction helps, removal of over flight charges helps, removal of taxes on aviation fuel helps, government intervention in some matters, availability of foreign exchange helps. So when we put these together, ultimately things become a lot easier,” he added.
“This industry faces a serious problems and that problem is that a few more airlines are likely to go under if nothing is done because you can’t continue to spend and the environment is very challenging.
“Most of the airlines depend on money from ticket sales and bank borrowings… In the short term if nothing is done, before the end of this year we would lose three more airlines.”
On the plan to lease three aircraft for the establishment of national carrier, the expert said a truly Nigerian carrier is what the country needs to make an impact, saying wet leasing aircraft to start an airline is not sustainable.
“There is no solution or magic a national carrier will provide given the basic problems in the industry,” he said.