Aviation crisis deepens as Nigerian airlines lose N150bn, face fresh shutdown threats over debts

Nigeria’s aviation sector is facing mounting turbulence as domestic airlines grapple with staggering financial losses and escalating disputes with service providers, raising fears of widespread operational disruption.

The Airline Operators of Nigeria (AON) has disclosed that carriers have incurred losses exceeding N150bn within just two months, underscoring the severity of the crisis threatening the industry’s survival.

A member of the AON Board of Trustees, Roland Iyayi, warned that the situation has pushed airlines to the brink, with operators struggling to remain afloat amid rising operational costs and mounting financial obligations.

“Airlines have bled over N150bn in two months. The question is—where will the money come from? It has reached a point where threats no longer matter because the capacity simply isn’t there,” Iyayi said.

He stressed that the ongoing standoff between airlines and ground handling companies could have far-reaching consequences, noting that the fortunes of both sectors are deeply intertwined.

“If airlines shut down, ground handlers will have no business. The survival of one depends on the other,” he added.

The tension follows a growing dispute over more than N9bn owed by airlines to ground handling firms, which provide essential services such as baggage handling, aircraft turnaround, and logistics support.

The Chairman of the Aviation Ground Handling Association of Nigeria (AGHAN), Olaniyi Adigun, confirmed that operators are weighing their next steps in line with labour laws, including the possibility of escalating industrial action.

“We are reviewing our options. After issuing a seven-day notice, the law allows us to proceed with further action if there is no response. We will announce our next move after our meeting,” Adigun stated.

Although some airlines have begun partial repayments, the majority are yet to meet their obligations, leaving the dispute unresolved and tensions high across the sector.

Industry insiders warn that any suspension of ground handling services could cripple flight operations nationwide, worsening an already fragile situation.

Another airline executive, who spoke anonymously, cautioned that the timing of the dispute could not be worse, given the broader economic challenges facing the country.

“This is a very sensitive period. If airlines collapse, the ripple effects will be massive—affecting jobs, travel, and the economy at large,” the source said.

He urged all parties to prioritise dialogue, emphasising that cooperation remains the only viable path to resolving the crisis.

The current standoff comes amid a series of challenges confronting the aviation industry, including soaring fuel prices, foreign exchange constraints, and declining passenger demand.

With both airlines and service providers under financial strain, stakeholders warn that failure to reach a swift resolution could trigger a full-blown crisis, disrupting air travel across Nigeria and further weakening investor confidence in the sector.