Market News

By : Olusegun Koiki

The mismatch between naira earnings and foreign-currency expenses is placing enormous financial pressure on Nigerian carriers, with airlines forced to absorb substantial losses to remain in business.

The indigenous airlines have also called on the Federal Government to reduce aviation charges and taxes, saying the high cost of doing business was contributing to expensive airfares and undermining the affordability of air travel in Nigeria.

These were the views of the Chief Commercial Officer of United Nigeria Airlines (UNA), Adedayo Olawuyi, yesterday at the AeroWest conference held in Lagos.

Olawuyi, who spoke during a panel session on the theme, ‘The Real Cost of Running 

Aviation Business
: Fixing Connectivity, Affordability, FX, Fuel and Border Friction’, said airlines were operating under a difficult financial structure in which their revenues were largely generated in naira while a substantial proportion of their expenses were denominated in foreign currency.

Olawuyi also identified lower aviation charges and tax reductions as critical government interventions needed to make air transportation more affordable.

According to him, the high cost of financing was another major challenge confronting airlines, even as he questioned the sustainability of borrowing at high interest rates to operate businesses with relatively slim profit margins.

“How many of you would take a loan of 30 per cent to invest in a business that gives you less than five per cent profit? That is a 

pressing issue for airlines in Africa, specifically in Nigeria.

“Consider the cost of training a pilot. Pilots today are in high demand and are not cheap to come by. We have airlines in this country with grounded aircraft because there are no pilots available,” he added.

He also lamented the lack of adequate Maintenance, Repair and Overhaul (MRO) facilities in the country and the region, saying Nigerian airlines were compelled to send aircraft abroad for maintenance, thereby increasing their foreign exchange exposure.

On aviation fuel, Olawuyi said the sharp increase in the price of Jet A1 had further compounded airlines’ operating costs, with the additional burden ultimately reflected in ticket prices.

He explained that airlines moved from buying aviation fuel at about N900 per litre in December 2025 to around N3,000 per litre in 2026, describing the development as an illustration of the rising cost of airline operations.

He maintained that airlines could not arbitrarily cut expenditure in major areas such as maintenance, training and safety without putting operations and passengers at risk.

Olawuyi urged the government and other stakeholders to create a more enabling environment for airlines, stressing that the burden of improving connectivity and affordability could not be left to carriers alone.

He warned that excessive charges imposed on airlines could ultimately undermine the industry from which government agencies and other stakeholders derive revenue.

“While we are discussing connectivity as a solution to the problems we see today, it is not just the airlines alone that can solve the problem. Government needs to create an enabling environment for us.

“We all focus on making money from airlines. As my boss says, the airline is the goose that lays the golden egg, and everybody wants a piece of it. But at the end of the day, if the goose dies, everything is lost,” he said.

On route economics, Olawuyi said airlines had to balance the need for connectivity with commercial realities, particularly on routes with low passenger volumes.