Credit rating: Aircraft lessors, maintenance firms shun Nigerian airlines

Spare part lessors, suppliers and foreign aircraft maintenance companies are no longer willing to deal with Nigerian operators on credit basis as the country’s airlines’ credit rating overseas continues to decline. It was learnt that the development had been a source of concern to stakeholders familiar with the situation, who believe that the development could hamper the sector’s growth in the country.

Poor credit rating of Nigerian airlines has been listed as one of the problems affecting the country’s airlines. According to an aviation expert and Managing Director of Katari System Nigeria Limited, Ali Mohammed Magashi, the country’s carrier’s penchant for not honouring their obligations to the foreign aviation companies had been the major challenge.

Magashi, who delivered a paper titled: “Financing Nigerian aviation: The option for growth,” at the Nigeria Travel Mart (NTM) first Anniversary Colloquium with the theme, “Leapfrogging Nigerian aviation to match her potential,” noted that the obligations include aircraft lease payments, spare part and routine maintenance bills.

He stressed that most of the foreign firms were reluctant to do business with Nigerian airlines and other aviation firms. Magashi said that the development was fuelled by delays in releasing foreign exchange to the airlines by the Central Bank of Nigeria (CBN). He noted: “I will not blame the foreign companies for that.

It has to do with the delay in the process of acquiring foreign exchange through the CBN. Also, our airlines don’t allocate their scarce resources effectively. “At times, they misplace their priorities in the area of their expenses, thereby leaving out things that can affect the existence of the airlines.

They should be able to project ahead and know how to allocate the scarce resources on competing needs.” Also, Chief Executive Officer of Ropeways Transport Limited, Capt Dapo Olumide, said that the country’s airlines are weak and needed to do something extra-ordinary to survive.

He noted the indigenous carriers needed to be forced to adopt international best practices. Olumide added: “All these foreign companies are out to make money and profit. Some of the indigenous airlines refuse to pay for their aircraft lease and run to another company for spare parts. The average life span of a Nigerian airline is about 10 years.