High interest rates, inflation threaten Nigerian airlines — Bi-Courtney COO

Chief Operating Officer of Bi-Courtney Aviation Services Limited, Mr Remi Jibodu, has said Nigerian airlines will struggle to make profit despite implementation of the Cape Town Convention Practice Direction.

Jibodu said although CTC would encourage airlines to dry lease aircraft, bank interest rates and inflation might make lease agreement cost inaccessible.

He spoke to members of the League of Airport and Aviation Correspondents, LAAC, during a courtesy visit to the company’s office.

He said: “In Nigeria, unless you have private funds, if you look at the financial institution, vis-a-vis what is happening in the industry now, you have interest rates of about 30 per cent plus and inflation is about 24.7 per cent or thereabouts.

“It means that if you are borrowing money from the bank, it is going to be very difficult for you to breakeven, especially when they are putting the cost in terms of lease agreement on you.

“When you look at most of the aircraft that we brought in, maybe in November, December last year, you would realize that because it was summer, a lot of them were cheaper to get, at least at that time. Even at that, it was at serious costs. There are airlines that have to return their aircraft because they can not cope with the lease agreements.”