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Local Airlines Lose N39.2 Billion Yearly to Expatriates



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  • Local Airlines Lose N39.2 Billion Yearly to Expatriates

Local airlines are weighed down by a yearly wage bill of N39.2 billion for expatriate pilots and engineers. Some of these domestic carriers which are already in distress parade no fewer than 682 foreign pilots with cumulative wage bill in excess of N3.27billion a month. Foreign maintenance engineers are also in the excess of 300 across the board.

Figures from the Nigerian Civil Aviation Authority (NCAA) show a total of 2,269 active licensed pilots of who 1,646 are Nigerians. Non-Nigerian pilots are 623, while there are at least another 59 pilots with certificates of validation, though not licensed by Nigeria as at March 27, 2017.

The situation encourages capital flight. The expatriate wage bill of N3.27billion is enough to pay a total of 1,646 active licensed Nigerian pilots. Put to different use, the expatriate wage bill of N39.2billion per year can offset the airlines’ outstanding liabilities to regulatory agencies in the last six years and still keep them afloat.

Comparatively, a foreign captain earns at least $12,000 (N4.8million) a month. The best paid Nigerian captains are those in managerial positions, who earn about N2.5million a month, while most of them earn about N1million.

Arik Air, which started with a foreign managing director, has 28 aircraft fleet-size and parades the largest retinue of expatriates, including pilots, engineers and crew. German Airline, Lufthansa, is saddled with maintenance, while Indians do the reservations.

Dana Air started operations with planes that required foreign pilots with over 500-hours of experience on MD 82/83 aircraft type. Till date, foreigners still man its cockpits. Two foreign pilots were in the cockpit of the aircraft that crashed in 2012 in Lagos.

The Secretary General, Aviation Round Table (ART), Group Captain John Ojikutu, noted that the penchant for foreign pilots is not about them being “better than the Nigerian pilots; it is more about capital flight than any other consideration.”

About three years ago when the oil market was booming, and with about 200 private jets in the airspace, the ratio of expatriate to local pilot was three to four, with at least 1,000 foreign pilots in Nigeria.

The Chairman, Nigerian Aviation Safety Initiative (NASI), Capt. Dung Rwang Pam, said the wage bill would not have been much about two years ago when the exchange rate was less than N200 to $1 and more expatriates were around. But with dollar to naira rate hitting the roof, some of the airlines are beginning to buckle under their overhead.

Investigation shows that some operators are quite unsettled with the bloated overhead and are considering ways to reduce it.

The aviation sector is high-capital intensive and dollar-denominated but with very low profit margin. On a good day, a well-run airline earns six per cent profit margin.

Leading rotary wing helicopter services operator, Bristow Helicopters Nigeria, recently sacked 118 expatriates including pilots and engineers, citing downturn in the oil and gas sector.

Similarly, Caverton Helicopters dismissed 150 staffers, among them foreigners.Arik Air was in February taken before a UK High Court of Justice (Chancery) by 20 of its foreign pilots. The expatriates sought to “wind up” the company over the non-payment of their salaries by the airline amounting to $600,000 (N240million).

Since the Asset Management Corporation of Nigeria (AMCON) took over the management of Arik, The Guardian learnt that efforts are on to tackle the challenge of “too expensive pilots and engineers” where there are cheaper equivalents in the Nigerian workforce.

But the challenge is that “a layoff will require compensation that is even more crazy than their wages. So the management wanted the current contracts to run, without a plan to renew any once they expire. The burden is too much to bear at this time,” a source said on a condition of anonymity.

One of the airlines was apparently more innovative with the expatriate release strategy. It was learnt that the airline started paying the foreigners in naira, instead of dollars, to absolve it from the attendant excess cost on account of dollar fluctuations. Displeased with the mode of payment, the foreigners began to leave on their own, and are seeking better prospects in other airlines.

Meanwhile, there has been an upsurge in the global demand for good pilots lately, where some of the expatriates have been finding new opportunities.Domestic carriers have not been spared of the poaching, with about 12 Arik pilots, and six from Air Peace, moving to RwandAir, Emirates, Etihad and others.

With the foreign pilots and some Nigerians finding better offers abroad, fresh opportunities are opening up for about 400 young Nigerian pilots that are unemployed. President, ART, Gabriel Olowo, said poaching was a plus, especially in the light of the downturn being experienced by some airlines

He said: “What will a pilot do if there is no aeroplane to fly? If I am in Arik and aeroplanes go from 30 to nine, and the pilots are sitting down, they can’t fly, what do I do? I’ll roster them but there are no aeroplanes and they ask me to pay allowances. That was why they (unions) picketed Landover, because pilots were scheduled and there were no service for them. Let them poach them and go and gather the experience; the day we need them, we will look for them.”

The challenge, however, is the little or no experience at the disposal of unemployed pilots. More so, domestic airlines are reluctant to fund the cost of type-conversion course in excess of $30,000 (N12million) per pilot.

“It’s cheaper and easier to employ an already rated pilot. With less than 300 flying hours (instead of 500 to 700 required to fly certain categories of aircraft), and no jet experience, very few airlines are attracted to freshly licensed pilots,” a chief operating officer said.

Doyen of the aviation sector, Capt. Dele Ore, called for an urgent review of the operating expatriate quota that has over the years been responsible for “widening the imbalance between expatriate and indigenous aviators in the sector.”

According to Ore, “for security reasons, we need to make it a policy that all registered aircraft in Nigeria must have a Nigerian onboard the cockpit. This means that either the commander is a Nigerian or the co-pilot is a Nigerian.

“Let’s face it. Haven’t you heard of situations where one pilot goes to the toilet and the other locks himself up? That is the security aspect of it. Second is that you are providing jobs for those Nigerians that are roaming the streets. That way, you are also helping government policy that wants to stop capital flight because what is spent on one expatriate is enough to train and nurture five to six Nigerians,” Ore said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Computer Village Traders Demand Refunds as Lagos State Cancels Katangowa Project



Traders at the renowned Computer Village in Lagos find themselves in a state of uncertainty following the abrupt termination of the multibillion-naira Katangowa project by the Lagos State Government.

The project, which was aimed at relocating the bustling tech market from its current site in Ikeja to the Agbado/Oke-Odo area of the state, has left traders in a state of limbo.

Despite the cancellation of the project reportedly occurring two years ago, traders claim they were not informed by either the government or the developers, Bridgeways Limited.

This lack of communication has left them in a precarious position, particularly concerning the substantial upfront payments made by some traders to the developers.

Chairman of the Computer Village Market Board, Chief Adebowale Soyebo, expressed dismay at the lack of communication from the authorities regarding the project’s termination.

He explained that neither the government nor the contractors had officially informed them of the decision, leaving traders in the dark about the fate of their investments.

Traders who had made payments to Bridgeways Limited now seek clarity on the refund process. The absence of official communication has compounded their concerns, with many uncertain about the fate of their investments.

While acknowledging the payments made by traders, Lagos State Governor’s Adviser on e-GIS and Urban Development, Dr. Olajide Babatunde, assured that the government would facilitate refunds.

He, however, said there is a need for proper identification and verification to ensure that affected traders receive their refunds accordingly.

The termination of the Katangowa project has reignited debates about the relocation of Computer Village.

Traders assert that the issue of relocation should not be raised until the new site is at least 70% completed, as per their agreement with the government.

The cancellation of the Katangowa project underscores the challenges associated with large-scale urban development projects and the importance of transparent communication between stakeholders to avoid such situations in the future.

As traders await further directives from the government, they remain hopeful for a resolution that safeguards their interests and ensures the continuity of one of Nigeria’s most prominent tech markets.

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Government Begins Disbursement of N200bn Support Fund to Manufacturers and Businesses



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The Ministry of Industry, Trade and Investment has initiated the disbursement of the long-awaited N200 billion Presidential Conditional Grant Scheme.

This is the beginning of a vital phase in the government’s strategy to provide financial assistance to manufacturers and businesses across Nigeria.

The scheme, which is being administered through the Bank of Industry (BOI), has been divided into three categories of funding, totaling N200 billion.

The disbursement process comes after an exhaustive selection process and verification of applicants to ensure transparency and accountability in the allocation of funds.

Doris Aniete, spokesperson for the Ministry of Industry, Trade and Investment, announced the progress in a statement posted on the trade minister’s official X (formerly Twitter) handle.

Aniete highlighted that verified beneficiaries have already started receiving their grants, signaling the beginning of the phased disbursement strategy.

“We are pleased to inform you that the disbursement process for the Presidential Conditional Grant Programme has officially commenced. Some beneficiaries have already received their grants, marking the beginning of our phased disbursement strategy,” stated Aniete.

She further disclosed that by Friday, April 19, a substantial number of verified applicants are set to receive significant disbursements.

However, Aniete emphasized that disbursements are ongoing, and not all applicants will receive their grants immediately, assuring that all verified applicants will eventually receive their grants in subsequent phases.

The initiation of the disbursement process comes after more than eight months since President Bola Tinubu announced the grant for manufacturers and small businesses.

The scheme aims to mitigate the adverse effects of recent economic reforms and foster sustainable economic growth by empowering businesses with financial support.

President Tinubu had outlined the government’s commitment to strengthening the manufacturing sector and creating job opportunities through the disbursement of N200 billion over a specified period.

The funding is intended to provide credit to 75 enterprises, each able to access up to N1 billion at a low-interest rate of 9% per annum.

However, the implementation of the programme has faced challenges, including delays and criticisms regarding the registration process.

Femi Egbesola, President of the Association of Small Business Owners, expressed concerns over the slow pace of data collation and suggested that genuine businesses were being discouraged from accessing the loans.

Despite the hurdles, the commencement of the disbursement process signifies a significant step forward in the government’s efforts to provide vital support to manufacturers and businesses, potentially revitalizing economic activities and driving growth across various sectors.

As beneficiaries begin to receive their grants, the impact of this initiative on the nation’s economic landscape is eagerly anticipated.

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Company News

MicroStrategy Rally Crushes Short Sellers, Wiping Out $1.92 Billion



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Short sellers betting against MicroStrategy found themselves facing significant losses as the company’s rally wiped out $1.92 billion since March.

This development comes amidst a rally that has seen MicroStrategy’s stock outperform bitcoin, causing a considerable hit to those who had taken a bearish stance on the tech firm.

According to data from S3 Partners, short sellers have been on the losing end since March, as MicroStrategy’s stock surged, highlighting the impact of the rally on those betting against the company’s success.

This loss underscores the challenges faced by short sellers in a market where certain stocks experience rapid and unexpected price increases.

The rally in MicroStrategy’s stock is attributed to several factors, including the approval of several spot bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) earlier in the year.

This move by the SEC brought bitcoin, a once-nascent asset class, closer to the mainstream and fueled investor interest in companies like MicroStrategy, known for their significant holdings of the cryptocurrency.

MicroStrategy, which held nearly 190,000 bitcoin on its balance sheet as of the end of 2023, has indicated its intention to continue increasing its exposure to the digital currency.

The company’s decision to sell convertible debt to raise money for additional bitcoin purchases further bolstered investor confidence and contributed to the stock’s rally.

Analysts at BTIG noted that the premium for MicroStrategy’s stock reflects investors’ desire to gain exposure to bitcoin indirectly, especially those who may not have the means to invest directly in the cryptocurrency or ETFs.

The company’s ability to raise capital for bitcoin purchases is seen as a positive sign for shareholders, adding to the optimism surrounding its stock.

However, despite the recent rally and optimism surrounding MicroStrategy, the crypto industry as a whole continues to be heavily shorted.

Short interest in nine of the most-watched companies in the crypto space remains high, standing at 16.73% of the total number of outstanding shares, more than three times the average in the United States.

Moreover, concerns persist regarding the SEC’s stance on cryptocurrencies, with some experts suggesting that the approval of spot bitcoin ETFs may not necessarily indicate a broader acceptance of other similar products, such as spot ethereum ETFs.

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