Nigerian airports, airlines struggle to sustain operations as FAAN reports N44.4 bln loss
Only three of Nigeria’s airports have the financial capacity to sustain their operations, the rest are run at a loss, a report has shown just as the country’s Airports Authority reported N44.39 billion losses in 3-year.
The losses according to a report were incurred in the operations of 17 airports across the country as lack of sufficient traffic, huge overhead and maintenance cost dominated expenditures.
However, three of the country’s airport, Murtala Muhammed International Airport (MMIA), Lagos, Nnamdi Azikiwe International Airport (NAIA), Abuja, and Port Harcourt International Airport (PHIA), Omagwa, Rivers State have been adjudged to generate sufficient revenues to sustain their operations between 2017 and 2019.
The International Air Transport Association (IATA) had stated in a recent report that for an airport to be viable and self-sustaining, it must have, at least, five million passengers a year.
But most Nigerian airports, sited in some states are underutilized as a result of low passenger carriage and huge overhead outlay. In spite of this, many states without airports are still making moves to site one in their domain, largely as a result of political pressure from state governments.
The only two airports that can boost of at least five million passages annually are the ones in Lagos and Abuja, the rest are struggling with low passengers and patronage.
Across the globe, there is a major lull in airport activities due to the restrictions placed to contain the spread of coronavirus pandemic and this has also resulted in huge losses by operators of airports and airlines across the world.
The outbreak of covid-19 has brought the global aviation industry to its knees, while African carriers are particularly vulnerable as they seek assistance from governments already facing constrained finances.
Many Nigerian airlines, including Medview Airlines, which proposed to sell two of its aircraft to offset outstanding debt and stabilise operations and Arik, Air Peace and Aero contractor that have canceled in-flight food service and hike fares to absorb losses and reduce pressure on their finances.
Other operators in the continent such as Ethiopian Airlines Group, South African Airways and Kenya Airways are among national airlines staring at mounting losses and the disruptions of growth plans put in place before the Covid-19 outbreak.
A report have shown that many African carriers may lose $4 billion in 2020 revenue as demand for travel around the continent grinds to a halt, the International Air Transport Association said last week.