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COVID-19 could force Nigerian airlines to merge –NCAA boss

Published

3 years ago

December 7, 2020

Airlines in the Nigerian aviation industry might be compelled by circumstances to embrace merger as a result of the impact of the covid-19 pandemic on business, Musa Nuhu, the director-general of the Nigerian Civil Aviation Authority (NCAA) has said.

The NCAA chief gave the revelation while examining the effects of the pandemic outbreak on the sector during a Nigerian Television Authority programme on Saturday.

“The COVID-19 pandemic exaggerated a bad situation; some airlines may not survive but the industry will come back better. It has always gone through crisis but has come out stronger. The Airlines Operators of Nigeria are coming together to see what they can do to help the situation and they met with me. The industry will be different altogether,” the NCAA boss said.

“I am sure a lot of them will see changes in their model. I won’t be surprised there would be merger activities around airlines to reduce cost and survive.”

The International Air Transport Association forecasted in a commentary in May that the Nigerian aviation sector was at risk of losing $900 million in revenue and 124,000 jobs in this year alone.

The NCAA boss said “the airlines carry their maintenance out of the country and it is done in foreign exchange. They need to raise enough money to service the aircraft.”

Cost of air travel in Africa’s biggest economy has been on a steep rise in recent weeks by reason of worsening rate of exchanging dollar for naira which recently hit its 3-year high at the parallel market.

“The airlines have to find a source of raising more naira. Passenger load has decreased during the pandemic. That is why there have been significant increase in airfares, they are trying their best and by the time the bailout kicks in, things will be better,” the NCAA director-general stated.

In the last few weeks, an average one-hour economy class seat for local flight among some airlines ballooned to N75,000 from N33,000, representing over 127 per cent increase.

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