How Nigeria lost $450.4m in Aviation Sector in 2016 –NCAA

As various sectors compute reports on how they fared, as 2016 winds up, the Nigerian aviation sector has announced that it suffered a minimum loss of $450.4 million from inconsistent government policies in the year.

A spokesman of NCAA said on Thursday said that an interim report to the Minister of State, Aviation, Hadi Sirika, had identified some of the challenges that both the operators and government agencies faced, resulting from recession and which has recorded the unprecedented losses.

The sector started recording huge losses as from 2015, compared with 2013 and 2014, which had marginal profit of 5 per cent each.

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End of the year assessment of the sector, as a routine, has never been this bad with the industry having suffered operational closures of up to 50 per cent due to many factors which include acute aviation fuel scarcity, unstable foreign exchange rate against naira and other hitches.

According the interim report, sighted by Ripples Nigeria, delays and cancelations of flights led to loss of 45 per cent revenue, none profitability had 25 per cent, while late payment of international obligations, including insurance and maintenance costs is 15 per cent and other unclassified factors took care of the remaining.

In January 2016, it was projected that the aviation sector would contribute 15 per cent to Nigeria’s GDP.

But experts said failure of government to keep to its promise of assisting foreign operators to repatriate revenue to their home countries was the beginning of the crisis of the industry, coupled with inconsistency in forex policy.

The development has seen more than 30 per cent of the operators running unsettled overhead cost that could not be sustained and which led to industrial disputes as witnessed in Aero Contractor, Arik and other airlines.

Ben Dubem, an aviation expert put it this way: “Nigeria should have been talking of recording impressive turn over in the sector, given its tourism potential; the news of losses is out it.

“The economies of most countries are sustained by the aviation industry, that is why Germany, US and even south Africa , each records at least 26 per cent contribution from aviation industry to their GDP growth.”

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