How high costs are pushing Nigerian airlines to the brink — Ibom Air MD

…describes sending planes abroad for checks as a death sentence

By Dickson Omobola

Mr George Uriesi is the Managing Director of Ibom Air, Akwa Ibom State government-owned airline.

His experience in aviation spans more than 31 years, covering airline operations, airport management and both the safety and economic regulation of the industry.

During his long and productive career, he served as General Manager of Cape Town International Airport in South Africa and as Managing Director of the Federal Airports Authority of Nigeria, FAAN.

At the two-day National Aviation Conference 2025, themed: ‘Elevating the Nigerian Aviation Industry through Investment, Partnership and Global Engagements’ and hosted by FAAN in Lagos, he laid bare the challenges Nigerian airlines face in achieving profitability and offered practical solutions.

Background

In the air transport ecosystem, the airline is the heavy lifter. The aircraft manufacturer produces aircraft for billions of dollars because it knows airlines would buy them. Lessors and financiers expect the airlines to borrow money from them to purchase planes. In the air transport ecosystem, manufacturers, lessors and financiers all earn. For the insurers, they know that the airlines would come and insure their planes, so they make money. But the money is reliant on the airline. The fuelers supply fuel, but the airlines must pay them for it. Service providers, such as ground handlers and caterers, must provide their services, while the airlines must pay them for it.

Conundrum

In all of this, the conundrum of the Nigerian airline begins with earning in Naira, planning in Naira and paying in dollars. We are constantly in survival mode. Aircraft are expensive. The cheapest is $50 million. Most aircraft are valued at $80 million or above. We operate the same aircraft as our colleagues worldwide. Take my airline as an example, we operate the Airbus A220. It is one of the most modern aircraft in the world, and we bought it brand new. A fellow airline in Europe will secure financing for its aircraft at about three or four per cent, while our aircraft are financed at around 30 per cent. The man in Europe gets financed for 15 years, and we get ours for seven years. The person operating the same aeroplane as me in Europe is paying $100 every month, and I am paying $500 for my aeroplane every month. My colleague in Europe pays about half of what I pay in insurance for the same level of risk. I ask: why do they say that they place a lot of risk on Nigeria, even when the risk is the same? Well, for some reason, it is Nigeria, and I have to pay twice what my colleague in Europe pays for insurance. Can you imagine that? With all these, an operator’s hand is tied behind his back. He operates the same aircraft, though, very expensively and insuring it very expensively.

Infrastructure limitations

There are infrastructure limitations. In a nutshell, many of the airports still do not support the full utilisation of an aircraft. Take a look at what is happening in Abuja right now. Air Traffic Controllers, ATCs, have decided to default to procedural approach management instead of radar. Because of this, they keep the aeroplanes in the air for far longer. There is a lot of communication with many aeroplanes during the capacity waves, which is a safety issue. Our pilots are raising that every minute. Due to this, the flight to Abuja is taking so much longer. For the flight out of Abuja, you have to sit there for 20 minutes before you can use the runway. If you calculate the impact it has on aviation fuel, you can tell that it is huge. I am appealing to the Nigerian Airspace Management Agency, NAMA, to help airlines by using the radar. I know you are trying to train ATCs, but you can’t be doing that in Abuja during peak hours.

Charges and taxes

There are charges and taxes. Let me use the Lagos-Accra route, which is a route that Ibom Air operates. Before an airline puts its price, it already has $185 of taxes that it must pay. Starting from December 1, the NCAA will charge international passengers $11.50 to and from. That is $23 for both legs. That is before an airline puts a price on its flight. The airline’s pricing will have to cover ground handling, fuel, the operating cost of the flight, landing fees and overflight charges. By the time an airline is putting a price that covers costs, it is already expensive for the average traveller. Something has to change because you can’t fly in Africa like this.

Maintenance and insurance

There is the issue of maintenance and insurance, which are paid in dollars. That is apart from paying for aeroplanes. The habit of maintaining our aeroplanes outside the country is unsustainable. It will kill all of us. Each time a Nigerian airline prepares to go for maintenance in Europe, the company gives an estimate of $1.5 million for the check. However, the airline ends up paying closer to $3 to $4 million at the end of the checks. That is unsustainable. Insurance is also paid for in dollars.

Import tariffs

On import tariffs, it was 1.5 per cent, and then the previous government of the late President Muhammadu Buhari removed it. Even though it was announced at the top, the people under did not implement it; they were still holding us to the 1.5 per cent. If an aircraft is $50 million, imagine what the tariff of 1.5 per cent of that is. In the new tax regime, it has been increased to four per cent. Can you imagine paying four per cent of $50 million? Again, our listening minister said he would intervene, and the intervention appears to have granted us the reprieve of that four per cent. However, government is also bringing back the 7.5 per cent Value Added Tax, VAT, in the new tax regime.

Solutions

What can we do to navigate this obstacle? The first is to try to get cheaper aircraft financing, because it is the biggest problem. If you see my management accounts, the line for finance costs is huge. That is direct profit. If we were not paying those heavy finance costs, we would be such a massively profitable airline. So, we need to do something. We have to start maintaining our aircraft. If not by ourselves, we can in our country because we are being scammed. Maintaining our aeroplanes outside makes it difficult to plan properly. Also, airlines need to be more productive in the utilisation of aircraft. The rest of the world uses aeroplanes plus or minus ten hours a day. We use our aeroplanes between five and a half and six hours a day. That’s about six sectors a day. If we could do eight sectors a day, we would do much better because what has happened is that at the end of the year, we have 1,080 fewer flights per aircraft than our average competitor elsewhere, and it is for many reasons, including infrastructure. Because we are unable to utilise our aeroplanes, we operate 720 fewer flights per aircraft a year than all our competitors elsewhere in the world. That is huge money being lost. These are the things that we can do, but we are not doing. Another thing is that we need to grow. Three, four, five, six aircraft per airline won’t work. To climb as quickly as possible, an airline needs 10, 11, 12, 15, or 20 aircraft to have a chance of being a sustainably successful airline and being a profitable entity. We must move away from being small. We need to plead with governments to help us reduce the numerous charges, as they are taking a toll on our ability to be profitable. Of course, we also need to lobby for the reduction of the exorbitant regional fees; they make flying around Africa a very daunting experience.

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