FOREX SCARCITY BITES HARDER ON AIRLINES AS OPERATORS MULL FLIGHT SUSPENSION. (PHOTO).

Forex scarcity bites harder on airlines as operators mull flight suspension

15th Jun 2023 

The biting scarcity of dollars may force some airlines to shut down operation any time from now.

Though the scarcity has always crippled airline operations, it got worse recently with many airlines finding it extremely difficult to continue operations as they are unable to source for dollars to pay for aircraft maintenance.

No fewer than 10 aircraft belonging to local operators are in different maintenance, repair and overhaul (MRO) facilities abroad as they are unable to source for dollars to pay for the cost of maintenance.

Media reports said that an average C-check costs $1m (about N750m at N750/$) and it could be more depending on the extent of the check to be carried out on an aircraft.

One of the operators who spoke with our correspondent yesterday said at least one or two airlines may suspend operations soon if the forex crisis did not subside.

Checks by our correspondent yesterday revealed that Azman Air had suspended most of its domestic routes as its aircraft were undergoing maintenance and they are yet to arrive owing to the scarcity of dollars.

The source said, “I can tell you many airlines are facing acute dollar shortage. We can’t access dollars to buy spare and fulfil other obligations. Airlines are currently grounding operations because we feel it is better to ground operations than to compromise safety. Safety of passengers is very paramount and this is also the advice of the regulatory authority, the Nigeria Civil Aviation Authority (NCAA).”

Our correspondent learnt that the current development may lead to further increase in air fares.

“Airlines are already paying more to get forex at the black market for spare parts and maintenance. Now that the naira has been devalued and coupled with this unified exchange rate, we only hope we would have more access to dollars but imagine paying over N700 for one dollar, it means the operation cost of airlines would go up again.”

Another operator who spoke with our correspondent stated that several requests to the Central Bank of Nigeria (CBN) for dollars could not be met.

Speaking with our reporter yesterday, Chief Executive Officer of Aero Contractors, Capt. Ado Sanusi stated that while airlines had been managing the scarcity, the industry has become extremely hit by the forex crisis in recent times.

“You know dollars cut across a lot of variables in aviation- the Jet A1, the spare parts, the leasing, and MRO and sometimes even payment of salaries to expat staff. So there is a lot of things that have affected the profitability of airlines in Nigeria because of this dollar.

“But we are happy with this unified dollar exchange as the banks are free to trade as we are reading. We hope that by the time this is fully implemented, it would actually assist us in getting some relief. You know we are dealing with availability and the pricing.