The Minister of Aviation, Senator Hadi Sirika has identified poor business plan, high cost of maintenance, choice of operational equipment, high interest on loans and poor corporate governance as some factors responsible for the failure of Nigerian airlines.
Nigerian airlines have average of 10 years lifespan and many of them have gone under in the past 20 years. Some of them include Triax, Okada, ADC Airlines, Chanchangi, Oriental Airlines, Al Barka, Kabo, Sosoliso, Bellview and Afrijet, among others.
The minister said if the cost of operation is low, cost of tickets would be lower and more people would travel by air. The minister said most Nigerian airlines have poor business plan and this include their administrative system, choice of aircraft, choice of routes, choice of manpower and financial management.
On the choice of aircraft, he said because the average distance between two cities in Nigeria is about one hour, Nigerian airlines should acquire small body aircraft that are new and less costly to maintain.
These types of airlines consume less fuel and also break-even at 50 per cent load factor. He said some poor critical decisions made by the management of the airlines led to their demise because airlines operate on a very low profit margin, but they generate high revenue.