‘Taxation, Forex Crisis Hampering Local Airlines Growth’

The managing director, Aero Contractors, Capt. Ado Sanusi, has disclosed that local airlines operating in the country are challenged by multiple taxations, scarcity of forex scarcity among others are crippling the growth of carriers in the industry.

Speaking against the backdrop of the airlines returning to the sky on 5th December, 2022, Sanusi, further stated that no airline in the country has posted a profit in the last 30 years.

Sanusi stated that there was nowhere in the world where airlines or any business are taxed to grow, stressing that airlines year in  year out for over three decades have been having financial challenges.

According to Sanusi, “Most airlines are challenged by multiple taxations and foreign exchange issues. Airline year in year out over three decades has been having financial challenges. They are taxing them too much. You cannot tax to grow. It is not possible. It is not done anywhere. We have to look inward first to address the latent problems of airlines in this country.”

“Every airline has had challenges with finances for the past 30 years. I don’t think any airline has posted a profit in this country. What does that tell you? Something is wrong. Other airlines everywhere even in Africa are posting profits. Definitely, something is wrong somewhere.”

He further stated that Aero Contractors before now had challenges, saying that was one of the reasons the carrier voluntarily suspended flight services on July 20, 2022.

As part of efforts to reduce costs and be profitable, Sanusi hinted that the carrier looked at its cost structures through its decision to outsource some strategic business units that they have to complement the airline so that they could reduce spending and reduce costs.

“We are pleased and delighted to return to services after a few months. We thank all our stakeholders who have been supportive, particularly the Nigerian Civil Aviation Authority (NCAA), our management, and our staff. I admit that we missed our customers dearly. Yes, we have challenges with finances and we have looked at our cost structure we are trying to reduce our costs by outsourcing some strategic business units that we have to complement the airline so that we can reduce spending and reduce our costs.

“What we are doing is to reduce our costs and the Assets Management Corporation of Nigeria (AMCON) has graciously given us permission to raise funds with financial institutions inside the country and outside the country.”

He also disclosed that airline had studied what led to shutting down of its operation, saying the mistake of the past will not be repeated.

Sanusi said, ”We have studied what we have done before, we have looked at what caused the failures of the past and we are very determined not to make the same mistakes and to expect different results. We are very determined and my team is very experienced in analysing what happened before and I believe that is why it took us a little longer to come back because we were studying to make sure when we re-launched, we launched differently. And we are confident the mistakes of the past would not repeat themselves.

“The new improved Aero Contractors is structured with four strategic business units and these four business units will support each other. We have the Maintenance Repair and Overhaul (MRO), which you are all aware of, we have improved it and are doing a lot of extension to look into other aircraft types. For instance, we are looking at Embraer products, probably Airbus for maintenance.”

Chairman, Technical Advisory Committee for Aero Contractors, Dr. Harold Demuren, said the carrier for the future, promising that the carrier would take its rightful place in the industry after operating for more than 63 years.

Demuren who was the former DG, NCAA, also appreciated  the staff and management for keeping the spirit alive, describing workers as the assets of any company.

He stated that from pricing and availability of Jet-A1 to Forex scarcity, Dr Demuren, admitted that it was a tough business especially as it was dollar denominated and prices keep going up.

He, however, said since he was aware of Aero Contractors in 1976 as it still holds the record of not having any major accidents and wished the airline continuity in that.

“There is drop in the demand of passengers because of crisis in the industry. Also, this will pass over, it’s a great challenge. You are up to it and you will change the tide. The business will not flatter, Aero will not fail, you will fly and you will fly safe,” he said.