The Struggle of Air Peace and the Aviation Industry in Nigeria
Allen Onyema, the Chief Executive Officer of Air Peace, has shared a harrowing experience that highlights the challenges faced by the Nigerian aviation sector. During a speech at the 29th annual conference of the League of Airport and Aviation Correspondents in Lagos, Onyema revealed how his airline suffered a $2 million loss to a Tunisia-based leasing company.
The incident occurred when the foreign company approached Air Peace with a request for aircraft parts, asking for a sum of $2 million. Onyema explained that he chose not to pursue legal action against the company, despite the loss. His decision was influenced by the fact that Nigeria was under an unofficial blacklisting due to previous breaches of contract by local airlines.
Onyema stated, “A foreign company defrauded us of $2 million. They told us they wanted to buy aircraft parts and needed a sum of $2 million. If I had stopped them from taking the money, Nigeria would have been further blacklisted. What you would be hearing is that Nigerian airlines are unreliable.”
He continued, “For the sake of the aviation industry, I decided not to stop this transaction. The company took our money and never came back. They stole our $2 million. The Nigerian government got in touch with them. They said it was a private business matter and they would see what they could do, and they ran away with that $2 million.”
Onyema emphasized that his decision was not made lightly. He acknowledged that while some local airlines were responsible for past issues, it was not entirely their fault. He stressed the importance of protecting the country's reputation and the aviation industry as a whole.
“If we had seized that money, we wouldn’t have been able to access dry-lease opportunities, because it would have further compounded the problems of the aviation industry,” he said.
Challenges in Funding and Access to Resources
In addition to the financial loss, Onyema highlighted the broader challenges facing the aviation sector in Nigeria. One major issue is the difficulty in securing funding. Banks in the country are becoming increasingly reluctant to lend due to concerns over non-repayment and a lack of integrity.
“In Nigeria, funding is very expensive with a 35 per cent interest rate and it’s not even available to everybody. People are asked to also bring collateral that is almost impossible to get. We need the banks but the conditions being imposed are very far from being helpful,” Onyema explained.
He noted that while the Nigerian aviation sector has started to become more liberal, it requires effort and responsibility to achieve that status. Onyema called on the government to create a window for airlines to access foreign exchange through the Central Bank of Nigeria or the Bank of Industry.
“Egypt has done it. Some other countries have done it. The good thing this government has done for us is that it has made foreign exchange rates stable. You can plan now, which is a good thing for the aviation sector. However, at the Central Bank level, they can create a window for airlines to acquire dollars at a slightly cheaper rate, because we are operating from a disadvantaged position when we operate from Nigeria,” he added.
The Road Ahead for Nigerian Aviation
Onyema’s experiences underscore the complex and often difficult landscape of the Nigerian aviation industry. From dealing with international fraud to navigating domestic banking challenges, the sector faces numerous obstacles. Yet, there are signs of progress, including more stable foreign exchange rates and a growing willingness to adapt.
Despite these challenges, Onyema remains committed to the growth and development of Air Peace and the broader aviation industry in Nigeria. His insights provide a valuable perspective on the struggles and aspirations of Nigerian airlines as they strive to compete on the global stage.