Aero Contractors (N2, Lagos) has become the first official airline casualty of Nigeria's worsening economic crisis after it announced it would suspend all scheduled operations with effect from September 1.

In a statement issued Wednesday, August 31, management said the depreciation of the Nigerian naira coupled with a chronic jet fuel and US dollar shortage had severely impacted its operations over the past six months.

"The impact of the external environment has been very harsh on our operational performance, hence management's decision to suspend scheduled services operations indefinitely effective September 1, 2016, pending when the external opportunities and a robust sustainable and viable plan is in place for Aero Contractors to recommence its scheduled services," it said.

In a bid to curb rising costs, Aero management held talks with unions earlier this year over a proposed workforce reduction scheme. However, with the suspension in operations, all staff have now been placed on indefinite leave, it said.

Nigeria's oldest airline, Aero Contractors has also struggled with a leadership crisis in recent months. In February, majority shareholder, the government-run Asset Management Company of Nigeria (AMCON), fired the airline's entire board before instigating a forensic audit of its accounts. Captain Fola Akinkuotu and his management team were subsequently appointed to oversee the airline's restructuring.

At the time of its suspension of flights, Aero's active fleet included one B737-400, one B737-500, one Dash 8-200, one Dash 8-300, and two Dash 8-400s according to the ch-aviation fleets database.