The Airline as the Industry’s “Heavy Lifter”
Uriesi underscored that airlines remain the financial backbone of the global air transport ecosystem. Aircraft manufacturers, lessors, financiers, insurers, fuel suppliers, ground handlers and caterers all depend on airlines’ ability to spend, borrow, insure and operate.
Yet in Nigeria, he noted, this ecosystem is fundamentally unbalanced: “Everyone else is guaranteed income—except the airline that pays everyone.”
The Naira–Dollar Dilemma
According to Uriesi, the central paradox constraining Nigerian airlines is the mismatch between earning in naira and paying nearly every major cost in dollars. Aircraft that cost $50 million to $80 million are financed at steep rates for Nigerian operators. While European carriers may secure 15-year facilities at three or four per cent, Nigerian airlines typically face rates near 30 per cent on seven-year tenures.
The disparity grows deeper in insurance. A European airline operating the same aircraft and facing the same global safety standards, he said, pays roughly half of what a Nigerian airline pays. “We carry the same risk profile, yet Nigeria is priced as though it is inherently high-risk,” he lamented. The result: operating similar aircraft at far higher costs and with heavily constrained margins.
Infrastructure Constraints and Fuel Inefficiency
Uriesi also highlighted infrastructure challenges, pointing to recent operational bottlenecks in Abuja where air traffic controllers reverted to procedural separation instead of radar guidance. This shift has prolonged flight times, increased cockpit workload and heightened safety concerns.
Longer airborne holding and extended wait times on the ground translate directly into higher fuel burn—one of the industry’s largest cost lines. He appealed to the Nigerian Airspace Management Agency (NAMA) to limit such procedural operations during peak periods, insisting that “the impact on fuel and safety is too significant to ignore.”
Heavy Charges, Taxes and Regional Cost Burdens
In addition to operational constraints, Uriesi described a dense web of charges that make regional flying disproportionately expensive. On the Lagos–Accra route, he explained, airlines face $185 in taxes even before setting a base fare. With the Nigeria Civil Aviation Authority introducing an additional $11.50 per international passenger per leg, airlines must price tickets high simply to break even.
The cumulative effect, he warned, is that air travel within Africa becomes inaccessible to the average traveller, stunting market growth and weakening competitiveness.
Maintenance Abroad: An Unsustainable Tradition
Most Nigerian airlines still conduct major aircraft maintenance overseas, a practice Uriesi said is no longer viable. Although maintenance shops often issue preliminary estimates of around $1.5 million, final bills frequently end up between $3 million and $4 million. Combined with insurance premiums—also dollar-denominated—the financial pressure becomes crushing.
Import Tariffs: A Persistent Burden
Import tariffs on aircraft and parts, though previously slated for removal, continue to feature in airline cost structures. The shift from 1.5 per cent to four per cent in the new tax regime would have imposed millions of dollars in additional levies, but recent ministerial intervention has provided temporary relief. However, the reinstatement of 7.5 per cent VAT adds a new layer of pressure.
Charting a Path Forward
Uriesi offered a set of pragmatic solutions for Nigerian carriers:
- Secure cheaper financing: Lower interest rates and longer repayment periods are critical to survival.
- Develop domestic maintenance capacity: Building local MRO (Maintenance, Repair and Overhaul) capability would slash costs and improve planning.
- Improve aircraft utilisation: Nigerian carriers average 5.5 to 6 hours of aircraft use daily, far below the global benchmark of up to 10 hours. This gap can lead to over 1,000 fewer flights per aircraft per year, representing major revenue losses.
- Fleet expansion for scale: Operating three to six aircraft is insufficient for sustainable profitability. Airlines need fleets of 10 to 20 aircraft to compete effectively.
- Advocate for reduced charges and regional fees: Excessive levies—both domestic and regional—make intra-African travel prohibitively costly.
A Call for Industry-Wide Collaboration
In closing, Uriesi urged government agencies, regulators and operators to collaborate on removing systemic bottlenecks. Without structural reforms, he warned, the Nigerian aviation industry will continue its cycle of costly operations, shrinking margins and financial fragility. But with coordinated action, he added, the sector can position itself for growth, competitiveness and long-term viability.