"$5m for Aircraft Engine": Airline Operator Explains Why Investors Shy Away From Nigeria’s Aviation Sector
- The Managing Director of 7-Star Hangar has said that investors are losing interest in investing in Nigeria’s aviation sector
- This follows an earlier directive that airlines must have a minimum of six aircraft will be allowed to operate
- The MD regarded the guideline as a difficult task considering the operating landscape
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Roland Ahmed, the managing director of 7-Star Hangar, claimed that because of Nigeria's aviation industry's poor reputation, investors are starting to lose interest in doing business in the country.
Ahmed said this while speaking at a recent symposium of the National Association of Aircraft Pilots and Engineers (NAAPE).
Source: UGC
Speaking on the subject of "Effective Economic Regulation of the Aviation Industry as an Imperative for Safety and Workers Welfare," he claimed that because all airlines are small and have financial difficulties, the new rule requiring them to have at least six aircraft in order to operate in the nation does not appear to be feasible.
Recall that NCAA recently said that new airlines must have a minimum of six aircraft before they are allowed to go into operation as part of its efforts to strengthen the sector
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This comes after the FG announced the renaming of the aviation ministry and the start date for the new university that would train pilots and engineers.
Good financial standing required
Capt. Musa Nuhu, Director-General of the Nigerian Civil Aviation Authority (NCAA), stated that airlines must have a good financial standing and a minimum of six aircraft in order to operate in the nation at a recent virtual conference with aviation media over the weekend.
The Sun reported that according to the DG, existing enterprises have been given a deadline to comply with the policy, and the new legislation applies to both them and new entrepreneurs.
Before now, domestic operators could not begin operations without at least three airworthy aircraft.
While the strategy was successful in the banking business, Ahmed advised the government to solve the problem internally because it might not work in the sector.
He said:
NCAA says new and old airlines must now have a minimum of six aircraft, if that is allowed to stand, it means it is only Air Peace that would operate.
He acknowledged that the endeavour is challenging because the airlines need to be strengthened. He claimed that he had been sitting in the management of NG Eagle hunting for an aeroplane engine for more than six months.
He continued by saying that despite sending over six leasing requests for engines, no one wanted to do business with Nigeria due to its poor rating and the lessor's demand that it be purchased outright.
He added:
One aircraft engine cost five million dollars and two engines cost $10 million. Who wants to give you that? And they are saying you should get six aircraft. When you include the airfare, it will cost you two million dollars, which is $12 million in today’s Nigeria.
He noted that this is occurring alongside the naira's decline, during which the dollar was trading for over N900 and the pound was trading for N1, 200, and that airlines would not survive this.
He stated that NG Eagle, which was once an initiative of the Asset Management Corporation of Nigeria (AMCON), will probably start operations in three months.
Airlines grapple with rise in turbulent passengers
In a related news, Legit.ng reported that Videos of rude, inebriated, and violent airline passengers have gone viral, but this isn't simply a social media fad—statistics show that these incidents are on the rise.
The increase in incidences coincides with the aviation sector recovering from the Covid pandemic, with airlines anticipating flying a nearly record 4.35 billion people this year.
Source: Legit.ng
