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Depending on the severity of the dollar shortage, some airlines may soon be forced to cease operations.

According to our report, despite the fact that the shortage has always hampered airline operations, it has worsened in recent months, with many airlines finding it extremely difficult to continue operations as they are unable to obtain dollars to pay for aircraft maintenance.

No less than ten aircraft belonging to local operators are in various maintenance, repair, and overhaul (MRO) facilities abroad due to their inability to obtain sufficient dollars to cover the cost of maintenance.

Depending on the extent of the inspection to be performed on an aircraft, a C-check may cost more than $1 million (about N750 million at N750/$).

One of the operators who spoke with our correspondent yesterday predicted that if the currency crisis does not abate soon, at least one or two airlines may suspend operations.

Yesterday, our correspondent discovered that Azman Air had suspended the majority of its domestic routes because its aircraft were undergoing maintenance and had yet to arrive due to the dollar shortage.

According to the source, numerous airlines are experiencing severe dollar shortages. We are unable to access dollars to purchase spares and meet other obligations. Currently, airlines are grounding operations because we believe that grounding operations is preferable to compromising safety. The regulatory authority, the Nigeria Civil Aviation Authority (NCAA), advises that passenger safety is of the utmost importance.

According to our correspondent, the current situation may result in further airfare increases.

“Airlines are already paying more on the black market to obtain foreign currency for spare parts and maintenance. Now that the naira has been devalued and coupled with this unified exchange rate, we can only hope that we will have greater access to dollars, but imagine having to pay more than N700 for one dollar; this would result in an increase in airline operating costs.”

According to another operator who spoke with our correspondent, the Central Bank of Nigeria (CBN) was unable to fulfill a number of requests for dollars.

Capt. Ado Sanusi, CEO of Aero Contractors, stated yesterday that while airlines have been managing the shortage, the industry has been severely impacted by the currency crisis in recent months.

“You are aware that dollars affect a variety of variables in aviation, including the Jet A1, spare parts, leasing, MRO, and sometimes even the payment of salaries to expat staff. Consequently, this dollar has had a significant impact on the profitability of airlines in Nigeria.

“However, we are pleased with this unified dollar exchange because, as we read, banks are free to trade. We hope that by the time this is fully implemented, it will provide us with actual relief. You are aware that we are discussing availability and pricing.

75 thoughts on “Airlines May Cease Operations Due to Shortage of Dollar

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