Nigerian airlines are caught between naira revenue and rising foreign exchange costs, a mismatch that continues to put pressure on airfares, profitability and connectivity, United Nigeria Airlines Chief Commercial Officer, Adedayo Olawuyi, has said.
Olawuyi said the structural imbalance is one of the biggest challenges confronting domestic carriers, which sell tickets primarily in naira while facing rising foreign exchange costs.
Speaking as a panelist at the AeroWest conference in Lagos on Wednesday, Olawuyi said the situation makes it difficult for airlines to keep fares affordable while maintaining commercially sustainable operations.
The conference had the theme, “The Real Cost of Running Aviation Business: Fixing Connectivity, Affordability, FX, Fuel and Border Friction.”
Foreign exchange costs deepen Nigerian airlines’ financial crisis
Olawuyi said airlines face significant dollar-linked expenses across aircraft maintenance, simulator training and other technical requirements. These foreign exchange costs continue to rise while airlines generate much of their income from naira-denominated ticket sales.
“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,” Olawuyi said.
The naira revenue and foreign exchange costs mismatch means airlines are exposed to exchange-rate volatility. When the naira weakens, the cost of maintaining aircraft, training crew and meeting other technical obligations rises, even when ticket prices remain unchanged.
He said the financial pressure extends to the cost of raising capital, describing airline financing as another major constraint on the sector.
“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.
Pilot shortages and training costs add pressure
Olawuyi said airlines must also contend with rising personnel costs, particularly the cost of training and retaining 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,” Olawuyi said.
The cost of pilot training is also affected by foreign exchange costs because some training, certification and simulator requirements are paid for outside Nigeria or priced in dollars.
Aviation fuel increases airline operating costs
Jet fuel has also become a major component of airline operating costs. According to the United Nigeria Airlines executive, the price of aviation fuel increased from about N900 in December 2025 to approximately N3,000 in 2026.
He said airlines have absorbed part of the increase but warned that such costs ultimately affect the economics of operating flights.
Higher fuel prices can increase the cost of every flight sector, leaving airlines with difficult choices between raising fares, reducing frequencies or absorbing losses.
Olawuyi stressed that airlines could not simply cut critical expenditure to reduce fares because safety-related costs must remain protected.
“All of that must be covered. Why? Because safety must be paramount,” he said.
Airlines seek lower charges and taxes
Against this backdrop, Olawuyi urged the Federal Government to review aviation charges and taxes as part of efforts to reduce the cost of air travel.
He said high aviation charges add to the cost of operating flights and ultimately put additional pressure on ticket prices.
For airlines already dealing with foreign exchange costs, fuel expenses, financing charges and overseas maintenance, he said reducing government-imposed charges could provide some relief.
“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.
Connectivity requires industry-wide action
Olawuyi said improving connectivity across West and Central Africa would require cooperation between airlines, government, regulators and tourism operators.
“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.
Thin routes create another challenge
Olawuyi also highlighted the difficulty of operating routes with limited passenger demand.
He said airlines must carefully match aircraft size and capacity with the markets they serve if they are to remain commercially viable.
“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.
“It becomes challenging to operate on thin markets with an aircraft like a 737 when the maximum number of passengers available on that route is only four,” Olawuyi said.
