The rising cost of foreign exchange, aviation fuel, financing and other dollar-denominated expenses is putting increasing pressure on Nigerian airlines, making it difficult for carriers to keep fares affordable while maintaining commercially sustainable operations, the Chief Commercial Officer of United Nigeria Airlines, Adedayo Olawuyi, has said.
Olawuyi made the remarks while speaking as a panelist at the AeroWest conference in Lagos, which focused on the cost of operating aviation businesses and challenges around connectivity, affordability, foreign exchange, fuel and border-related constraints.
He said one of the most persistent structural challenges facing domestic airlines was the mismatch between their predominantly naira-denominated revenues and the foreign currency requirements of several critical aspects of their operations.
According to him, airlines incur significant dollar-linked costs for aircraft maintenance, simulator training and other technical requirements, while most passengers pay for domestic tickets in naira.
“Consider maintenance: we have to send aircraft abroad because we do not have MROs in this region. We are also spending on simulator training for pilots, meaning we earn Naira but spend USD,” he said.
Olawuyi said the problem was compounded by the high cost of financing in Nigeria, arguing that airlines face a difficult investment environment when borrowing costs are significantly higher than the returns generated by the business.
“How many of you would take a loan of 30% to invest in a business that gives you less than 5% profit? That is a pressing issue for airlines in Africa, specifically in Nigeria, the cost of financing,” he said.
He also identified pilot shortages and the rising cost of crew training as additional pressures on airline operations. According to Olawuyi, some airlines have aircraft that remain grounded because of difficulties in securing qualified pilots.
“Consider the cost of training a pilot. Pilots today are in high demand and are not cheap to come by. We have airlines in this country with grounded aircraft because there are no pilots available,” he said.
Fuel costs, he added, have further intensified the pressure on airline finances. Olawuyi said aviation fuel prices had risen from about N900 per litre in December 2025 to approximately N3,000 in 2026, significantly increasing the cost of operating flights.
He said airlines had absorbed part of the increase, but warned that rising operational costs ultimately have implications for fares and the sustainability of routes.
Olawuyi stressed that airlines could not respond to cost pressures by cutting expenditure on safety-critical areas, noting that maintenance, training and other safety-related requirements must remain adequately funded.
“All of that must be covered. Why? Because safety must be paramount,” he said.
Against this backdrop, he called for a review of aviation charges and taxes, arguing that reducing the cost burden imposed on airlines would help support more affordable air travel and improve connectivity.
He cautioned that the government, regulators and airlines must work together to address the sector’s challenges rather than expecting any single stakeholder to resolve them independently.
“There is not a single part of this puzzle that can be fixed by just one person. The government cannot fix it alone, the regulators cannot fix it alone, and the airlines themselves cannot fix it alone,” he said.
Olawuyi also called for stronger collaboration between airlines and tourism operators to improve connectivity across West and Central Africa, noting that businesses and tourism destinations depend on reliable air links to attract visitors and facilitate economic activity.
He further highlighted the commercial difficulty of operating routes with limited passenger demand, particularly across West Africa. According to him, airlines need to deploy aircraft that are appropriately matched to the size and characteristics of individual markets.
“West Africa has many thin routes. Airlines must consider different aircraft sizes and types that will help them remain profitable on every sector they fly,” he said.
Olawuyi noted that operating larger aircraft on routes with very limited demand could quickly become commercially unsustainable, particularly when the number of available passengers is significantly below the aircraft’s capacity.
He argued that improving the economics of airline operations through lower charges, better infrastructure, more efficient financing, access to maintenance facilities and appropriate aircraft deployment would be critical to sustaining connectivity and keeping air travel within reach of passengers.
“We all focus on making money from airlines. As my boss says, the airline is the goose that lays the golden egg, and everybody wants a piece of it. But at the end of the day, if the goose dies, everything is lost,” he said.
