On Friday, the Airline Operators of Nigeria (AON) criticized the fact that aviation fuel, commonly known as Jet A1, is now selling for N1300 per liter.
Obiora Okonkwo, AON’s spokesman, issued a press release in which the airlines voiced great worry over the rising cost of operations.
Okonkwo, who also chairs United Nigeria Airlines, emphasized the crucial need for immediate government assistance to avoid the collapse of multiple local airlines.
The airlines stated that fluctuating exchange rates and the rising cost of aviation fuel at N1,300 per litre had disrupted operational planning and stability in the aviation industry.
Okonkwo went on to say that the unexpected increase in aviation fuel prices from N700 per litre, combined with the jump in the exchange rate to N1,400/$1, has resulted in considerable losses for airlines.
Passengers who purchased tickets well in advance at prior prices are now being airlifted at the current higher charges, compounding the airlines’ income loss, he claimed.
“We are making losses on factors that are beyond our control. We are not only faced with the problem of scarcity of dollars; even the aviation ecosystem is feeling the heat. Handling companies have increased the cost of their services, airports have increased their charges and those that service the aircraft have also increased the cost of their services. The monies for these payments are coming from the passengers who are already exhausted financially,” he said.
Okonkwo also noted that numerous businesses in Nigeria were experiencing low returns, leading to a decline in the number of essential passengers travelling during both peak and off-peak seasons. As a result, the airlines struggle to maintain adequate load factors to support their operations during the current low season, as there are fewer travellers for tourism and social engagements.
“Passenger traffic has shrunk because even those on social engagement like weddings, burials and other ceremonies may not be inclined to spend money on flight tickets; they would rather send credit alerts to those hosting the events who would appreciate such gestures. So, they pay instead of appearing in person.
“Air travel is a catalyst to economic development. There should have been government engagement with airlines at different levels. Airlines do not have special forex allocation; so, they buy at the same place traders who trade in Brazilian hair, textiles, and others buy.
“Our passion to remain in this business is being eroded. We are at the point of oxygen supply. Some airlines are going into a coma. Our equipment is diminishing. The minimal revenues we earn to keep the airlines flying, we convert to pay our lessors.
“It is impossible to bring in more aircraft. Aircraft owners have become skeptical because of country risk. A Nigerian airline may meet its terms, and all the standard criteria but the aircraft owners consider country risk above other factors. Country risk supersedes everything and lessors have their own obligations. So, there is nothing personal. Some airlines deposited money with the Central Bank of Nigeria but they cannot provide us the needed dollars,” he stated.