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Airline business in Nigeria is loss-making-Adefope

Chairman, HRG (Nigeria), and travel management consultant, Mr. Femi Adefope has described aviation in Nigeria and by extension, airline business in Nigeria and other places as loss-making, saying that Nigeria is a tough country to do such capital intensive business.

Adefope who spoke at the APG IET DAY in Lagos at the weekend noted that the carriers are using largely imported products even with uniforms, adding that If the uniforms are properly made, they are supposed to be fire retardant uniforms that are not manufactured locally.

He reiterated that the sector is being subsidized even with deregulation of the industry like the subsidy in the petroleum downstream sector.

He expressed the concern that many airlines are operating in Nigeria today because of a lack of proper feasibility study and based on the perceived success of other airlines.

His words, “People are not doing proper feasibility studies before they venture into the airline business. Again, when you go to borrow large sums of money, the interest rate is a lot. I am not querying how people put funds together; there should be more cooperation between airlines. There should be a local clearinghouse but because people don’t trust each other, you can’t enforce anything because you do not have a national identification card system here and that is one of the biggest drawbacks that we have here”.

“People do certain things for the wrong reasons with the government not obliged to subsidise Jet fuel because these things are paid for in foreign currency and that is why foreign airlines are not complaining because that is part of their costs because that is how they pay anyway. If you look at our business set up, a lot of people are going into airline business without proper business plans”, he stated.

Many of the country’s airlines lack corporate governance coupled with lots of greed just as over-taxation has equally been attributed to many factors bedeviling airline operations in the country.

Adefope admitted that the travel industry has to a large extent recovered 70 percent from the pre-COVID-19 era, stressing business travel was the slowest to recover for obvious reasons.

“So far, to a large extent, the industry has recovered. We are about 70 percent of where we were in 2019. Business travel was the slowest to recover for obvious reasons. Technically we are still in the pandemic because the World Health Organisation (WHO) has not declared the pandemic ended because of the implications on employees but tourism has picked up.

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