$1 BILLION OPERATIONAL COSTS PUSH PRIVATE JET OWNERS INTO BANKRUPTCY

 In Investor News

Economic dire strait in which average Nigerians find themselves may have caught up with the wealthiest and nouveau riche, pushing many into bankruptcy. Private jet services, a pre-pandemic plaything of very rich and classy Nigerians, have dipped severely. Most of the expensive ‘celebrity birds’, The Guardian learnt, are now an albatross on the wallet of their owners.

With lockdowns and inability to use the aircraft since the onset of the COVID-19 pandemic, leading to rising maintenance costs of about $4 million depending on the nature of the exercise and size of the aircraft, private jet owners are groaning under the burden of such costs. Indeed, the present challenge has led to a drastic reduction in the number of private jets in the country, declining from over 200 in 2015 to about 95 today, out of which only 46 are active.

Operators too are deploying creative measures to cope with the trying times and drawn-out debt crises, though in a flagrant violation of civil aviation rules. Besides evading duties due to the Federal Government, more owners are boycotting local rules to retain foreign registration numbers. Most disturbing for the sector is the illegal use of private jets for commercial and chartered operations – an encroachment into the turf of licensed air transport operators.

The apex regulator, Nigerian Civil Aviation Authority (NCAA), acknowledged some of the gaps that are consistently explored by some operators, though it assured that regulatory efforts were on to block loopholes and check illegalities. Losses accrued to scheduled commercial aviation in Nigeria, due to the COVID-19 pandemic were put at $994 Million in 2020. The International Air Transport Association (IATA) that measured the impact added that no fewer than 125,370 jobs were affected, with loss of contribution to the Gross Domestic Product (GDP) in excess of $885 Million.

More expensive General Aviation segment, which shelters private jet operators, appears to feel the pinch the most. Chief Operating Officer of the Private Jet Nigeria, Omotade Lepe, said the sub-sector has lost between $1 Billion to $5 Billion to the pandemic, which silenced the erstwhile luxury market. Lepe said the pandemic period has been the most challenging for operators as the sector suffered revenue loss, decline in flight requests and fixed overhead running.

Read more at: https://guardian.ng/business-services/1-billion-operational-costs-push-private-jet-owners-into-bankruptcy/

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