The gap between ₦ Naira earnings and foreign-currency expenses is causing significant financial strain on Nigerian carriers, forcing airlines to absorb substantial losses to stay afloat.
Local airlines have also called on the Federal Government to reduce aviation charges and taxes, arguing that the high cost of doing business is driving up airfares and making air travel less affordable in Nigeria.
These were the views expressed by the Chief Commercial Officer of United Nigeria Airlines (UNA), Adedayo Olawuyi, yesterday at the AeroWest conference in Lagos.
Olawuyi, who participated in a panel discussion titled, ‘The Real Cost of Running Aviation Business: Fixing Connectivity, Affordability, FX, Fuel and Border Friction,’ stated that airlines are operating under a challenging financial structure, where most revenues are earned in naira while a significant portion of expenses are in foreign currency.
He also identified lower aviation charges and tax reductions as essential government actions to make air travel more affordable.
According to him, the high cost of financing remains a major hurdle for airlines, and he questioned whether borrowing at high interest rates is sustainable, given their 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 voiced concern over the lack of adequate Maintenance, Repair and Overhaul (MRO) facilities in Nigeria and the region, saying airlines are forced to send aircraft abroad for servicing, which increases their foreign exchange demands.
Regarding aviation fuel, Olawuyi noted that the sharp rise in Jet A1 prices has further increased airlines’ operating costs, and this extra cost is ultimately passed on to passengers through higher ticket prices.
He explained that airlines shifted from buying aviation fuel at about N900 per liter in December 2025 to around N3,000 per liter in 2026, illustrating the escalating expenses involved in airline operations.
He emphasized that cutting costs in critical areas like maintenance, training, and safety is not feasible without risking operations and passenger safety.
Olawuyi called on government and stakeholders to foster a more supportive environment for airlines, highlighting that the burden of improving connectivity and affordability cannot rest solely on carriers.
He warned that excessive charges on airlines could ultimately weaken the industry, from which government agencies and others also benefit.
“While we discuss connectivity as a solution to current issues, it’s not just airlines that can fix it. 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 stated that airlines must balance the need for connectivity with the realities of low passenger volumes on certain routes.
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