The Director-General of Nigeria Civil Aviation Authority (NCAA), Capt. Mukhtar Usman has attributed the sharp drop of revenue flow to airlines globally to discontinued state funding, sustained de-regulation and privatization.
He said this at the weekend in a paper he delivered with theme,” The act of promoting a sustainable air transport economy while maintaining high level aviation safety standards”, at the Airport Business Summit and Expo in Abuja.
According to him, intense completion in the last two decades have seriously affected carriers, adding, “In Nigeria, for instance, aviation fuel constitutes 40%-50% of the airlines’ direct operating costs,”
He stated that the high cost of funds and the steady devaluation of the local currency in which the airlines’ income is mostly denominated, against the foreign currencies on which their major expenses are based, and many others, no doubt, aggravate the challenge.
He noted that human and cargo traffic at many airports have also dwindled with declining purchasing power of passengers and shippers.
According to him, “On the other hand, the cost of providing standard air transport services has continued to rise with the continuous innovations in the facilities and increasing demand for customer satisfaction, as a result, most airlines presently are faced with high and rising cost of operation”.
Within the period in reference, he said a lot of small and average airlines around the world have either collapsed or gone bankrupt, while most, if not all the world’s major airlines have recorded losses or sharp falls in profit.