No Respite For Operators As Aviation Fuel Hits N903

The skyrocketing price of aviation fuel otherwise known as Jet A1 as the price hit N903 per litre yesterday, from N880 on Monday, shows that there is no respite yet for airline operators in Nigeria over, according to Daily Trust.

The development has put pressure on airline tickets with passengers paying as much as N200,000 for a return Lagos-Abuja ticket; while Lagos-Kano return is between N150,000 and N200,000 depending on the time of booking. 

Abuja-Kano flight on Max Air is between N74,000 and N100,000; while it is between N74,000 and N80,000 on Air Peace.  Also on Max Air, Abuja-Maiduguri is N90,000 and Lagos-Kaduna on Azman Air for a Wednesday flight, N130,000. A one-way Lagos-Abuja fare is now N80,000 and could be as high as N150,000 if the travel date is in 24 hours.

Air Peace return ticket from Abuja-Kano is between N140,000 and N160,000 and one-way, N78,000. A return from Abuja-Gombe is N150,000 and one-way, N75,000. For Abuja-Port Harcourt, a one-way ticket is N100,000; Abuja-Lagos, between N75,000 and N100,000.

Checks on Air Peace flight from Lagos to Enugu for Wednesday (today) showed that it costs N150,000 for a one-way ticket.

Checks by Daily Trust indicated that the fuel was sold for N880 per litre in Kano; N780 in Abuja and N740 in Lagos, according to figure obtained from operators on Monday. 

But yesterday, the fear of the operators heightened as a litre was sold for N903 in the North. 

Our correspondent reports that it is usually more expensive up North due to the additional cost of bridging incurred by marketers from Lagos.

It would be recalled that the product which was sold for a little above N200 per litre in 2021 hit over N600 this year and it had recorded a steady rise forcing the airlines to adjust their fares and peg a one-way cheapest ticket to N50,000 early in the year amidst grumbling from passengers.

Following a further rise in the price of Jet A1, the operators under the aegis of Airline Operators of Nigeria (AON) had threatened to shut down operation on Monday May 9.

The House of Representatives had later summoned relevant agencies of government involved in fuel supply value chain, including the Nigerian National Petroleum Company Limited (NNPC), the Central Bank of Nigeria (CBN), among others.

There was a resolution for an interrupted supply of fuel to airlines over the next three months with the CBN committing to supply foreign exchange to marketers while there was another long term resolution to allow willing airlines to import jet fuel into the country.

However, months after the intervention of the National Assembly, there is no respite yet as none of the resolutions agreed upon has been implemented.

Operators said the situation had continued to exacerbate, threatening the survival of domestic airlines.

At the moment, two domestic operators have temporarily shut down operations citing partially the challenges posed by the skyrocketing Jet fuel price while Air Peace also cited the issue of fuel as a major reason for the suspension of its international flight to Johannesburg, South Africa.’

One of the airline operators, who spoke to our correspondent on the condition of anonymity, said the supply is steady at the moment, but the price is on a sharp increase.

“We can say the supply is better now, but the price is still on the increase as I am talking to you, we are just trying to break even and price our tickets appropriately,” he said.

We have cut down frequencies – Operator

An airline operator told our correspondent yesterday that all the airlines had reduced their frequencies, confirming that a litre is now sold for N903.

“So, everybody is reducing flights. This is very tough, but we are only hoping things would get better but as at today, we are not experiencing any improvement. It is getting worse instead,” he said.  

Passengers shun air travel

Findings by Daily Trust show many passengers are shunning air travel following the high cost of ticket.

Checks at the Murtala Muhammed Airport terminal two (MMA2) indicated that airlines have reduced their schedules in line with the drop in passengers. An official at MMA2 said passenger figure had dropped drastically over the high cost of tickets.

He gave an instance of some professionals who were to have a meeting in Abuja but had to resort to a zoom meeting because of the high cost of tickets.

“What we’re witnessing now is that if it’s not extremely important, nobody travels again because of the high cost of ticket. When you look at the figure from July to August, there is a significant drop. Most people that travel is because it’s extremely necessary,” he said.

A figure obtained by our correspondent yesterday showed that while the MMA2 recorded 187 departures and 225 arrivals in the first week of July, the figure has reduced to 172 departures and 140 arrivals in August.

Experts predict further rise in airfares

Speaking with Daily Trust, the president of the Aircraft Pilots and Owners Association, Alex Nwuba, said with the current increase in cost of operations, three more airlines may go under before the end of the year.         

Also speaking, an aviation consultant, Babatunde Adeniji, said, “As long as the cost drivers continue to go up, price in all forms will continue to go up. Inevitably, it’ll come to a head at some point. How? It’s unclear for now.

“Ticket prices will also go up and only few airlines who can weather this very difficult storms will survive if it does not abate soon.”                                                           

A former president of the National Association of Nigerian Travel Agencies, Bankole Bernard, said there was no end in sight yet to the rise in airfares.

He said:  “It’s not the airlines’ fault that they’re charging that amount of money, it’s the reality on ground.

“The fact is that the cost of tickets would still soar higher than what we’re experiencing at the moment because several things act as determining factors.  Everything that has to do with air transport is dollar denominated.” 

Assistant Secretary, Aviation Roundtable, Olumide Ohunayo, urged the government to address the foreign exchange crisis and mitigate the continuous rise in fuel price. 

“Not having a refinery for aviation fuel has held us down in this situation. The government can however assist and work on the taxes associated with airline operations. This would help reduce the cost a bit. The airlines on their part cannot continue to run a subsidized system at the expense of safety.

“A fuel surcharge ranging between 25 to 40% would be charged depending on the routes and the removal of five percent NCAA fees. It’s better for them to operate profitably instead of them to struggle in operations,” he said.

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Source: Daily Trust