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High interest rates, other operational costs killing domestic airlines – NCAA - DAILY POST
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The Nigeria Civil Aviation Authority says domestic airlines face formidable challenges due to the country’s harsh economic environment.
The Director General of NCAA, Capt. Musa Nuhua, disclosed this in a recent statement to journalists in Lagos.
According to him, high interest rates, exorbitant insurance premiums for aircraft and others are challenges airline operators grapple with in Nigeria.
He said 25 per cent interest rates, insurance and other operational costs are killing the country’s aviation sector.
Nuhu noted that the aviation agencies would try all within their power to reduce the burdens on the airlines by ensuring flexibility in their operations.
He explained that to ease the burden on the operating airlines, the apex aviation agency gave them a leeway of quarterly insurance premiums on aircraft but said it ensured the insurance cover was adequate for the risk.
“Nigerian airlines are operating in a challenging environment. An airline must collaborate with the economy it serves, and the Nigerian economy is in tough times. The cost of financing is 25 per cent. That is killing to start with. You take a loan and pay 25 per cent of whatever you make to the bank”, he stated.
