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Airlines Sound Alarm as Aviation Fuel Prices Skyrocket to N1,300: The Looming Crisis in Nigerian Aviation

The Airline Operators of Nigeria (AON) raise concerns about aviation fuel prices surpassing N1,300 and aircraft maintenance challenges

The Airline Operators of Nigeria (AON) sounded the alarm on Friday regarding the soaring cost of operation, particularly as aviation fuel prices have surged past N1,300.

Aviation fuel, also known as Jet A1, is a vital component for airlines, powering their aircraft and enabling flights to operate smoothly. However, the cost of this essential commodity has witnessed a staggering increase in recent times, reaching unprecedented levels. The alarming escalation, with prices exceeding N1,300 per liter, has sent shockwaves throughout the Nigerian aviation sector. This sharp rise can be attributed to various factors, including fluctuations in global oil prices, currency devaluation, and supply chain disruptions.

Despite the recent improvement in the naira-to-dollar exchange rate, which now stands at over N1,400 to a dollar, airlines are grappling with the challenge of affording scheduled maintenance for their aircraft.

The exponential rise in aviation fuel prices presents a dire predicament for airline operators in Nigeria. Fuel constitutes a substantial portion of an airline’s operating expenses, and any significant increase in its price directly impacts their bottom line. With fuel costs soaring to new heights, airlines are confronted with mounting financial burdens, eroding profit margins, and jeopardizing their viability. Moreover, the inability to absorb these escalating costs may lead to the proliferation of ticket price hikes, further deterring passengers and stifling demand for air travel.

The operators expressed grave concerns over the existential threat posed by this situation, noting that aircraft awaiting maintenance have been grounded due to the scarcity of foreign exchange, making it impossible to ferry them overseas.

They warned that if this trend persists, the country could face a shortage of operational aircraft for domestic services.

Professor Obiora Okonkwo, the Airline Operators of Nigeria (AON) spokesman and Chairman of United Nigeria Airlines, emphasized the urgent need for government intervention. He warned that many airlines could face closure without such intervention, leaving the government to handle their demise.

The airlines lamented the lack of stability in foreign exchange rates and the exorbitant price of aviation fuel, which has now reached N1,300 per litre. These factors have disrupted their ability to plan effectively, creating uncertainty and instability in their operations.

Professor Okonkwo highlighted the significant losses incurred by airlines, particularly on tickets purchased in 2023, when fuel prices were lower and the exchange rate was more favourable. Passengers are now being airlifted at significantly higher costs, resulting in substantial financial losses for airlines.

He underscored the broader economic implications, noting that shrinking passenger traffic and reduced flight ticket spending further exacerbate the financial strain on airlines. Social events like weddings and burials, which typically drive air travel demand, also see reduced attendance due to financial constraints.

Okonkwo emphasized the vital role of air travel in economic development and called for government engagement with airlines to address the challenges they face. He highlighted the reluctance of aircraft owners to invest in Nigerian airlines due to perceived country risks, further complicating the situation.

He urged for urgent action to prevent further deterioration in the aviation sector, emphasizing the critical need for stable policies and support mechanisms to sustain the industry.

The Nigerian aviation industry stands at a critical juncture, grappling with formidable challenges that threaten its viability and sustainability. The alarming surge in aviation fuel prices, surpassing N1,300 per liter, has set off alarm bells within the industry, prompting concerns about the future of air travel in Nigeria. As airline operators confront the daunting task of navigating through this turbulent period, concerted efforts are needed to address the underlying issues plaguing the sector. From enhancing infrastructure and streamlining regulatory processes to fostering collaboration and innovation, stakeholders must work in tandem to steer the Nigerian aviation industry towards a path of resilience and prosperity. Failure to act decisively risks derailing the aspirations of a nation striving for a thriving and dynamic aviation sector.

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