ABUJA, Nigeria (VOICE OF NAIJA)-Domestic airlines in Nigeria are grappling with increasing financial pressure following a steep rise in the cost of Jet-A1, commonly known as aviation fuel, the Airline Operators of Nigeria (AON) has revealed.
The association stated that the price of aviation fuel, which sold for around N1,000 per litre two weeks ago, has climbed to about N1,800 per litre in several parts of the country, marking roughly an 80 per cent increase within a short period.
Aviation fuel remains the biggest cost component in airline operations, accounting for between 30 and 35 per cent of total operating expenses.
Industry stakeholders have attributed the latest surge to the ongoing conflict in the Middle East, which has driven up global energy prices.
Speaking on Channels Television on Friday, the spokesperson for the Airline Operators of Nigeria, Prof. Obiora Okonkwo, said the spike had placed airlines under intense financial strain.
He noted that most carriers have so far avoided immediately passing the additional cost burden to passengers despite the mounting operational pressure.
“Two weeks ago, we were getting Jet-A1 at about N1,000 per litre, which today is about N1,800, and even more in some stations. We have experienced an increase of about 80 per cent. That’s quite a spike,” Okonkwo said.
He explained that airlines are currently absorbing the losses in order to avoid worsening the financial burden on travellers.
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“We are not in a business where you can easily adjust your ticket price. Right now what we are doing is that we are bleeding. We are taking the blow. We are selling tickets at very non-profitable prices. We are losing a lot of money,” he said.
Okonkwo cautioned that the situation may become unsustainable if fuel prices continue to rise without government intervention.
“Obviously, adjustments will be expected anytime soon. But again, we are very sensitive to the economic situation of Nigerians and our travellers,” he added.
He noted that developments in the global oil market, particularly the recent release of reserve crude oil, could affect fuel prices in the coming weeks.
Okonkwo also called on the Federal Government to consider engaging with the Dangote Refinery as part of efforts to stabilise the local supply of aviation fuel.
“We were more hopeless in a situation where there was no refinery in Nigeria in the last two years. Now that we have a refinery, we are hopeful that we can find a solution around it,” he said.
According to him, if the price surge persists, some airlines may find it difficult to continue absorbing the losses linked to the rising cost of aviation fuel.
Meanwhile, the AON spokesperson also commented on the decision by the Federal Competition and Consumer Protection Commission to sanction about five airlines over alleged price fixing.
Okonkwo said that although the commission has regulatory authority, the aviation sector is deregulated, making coordinated price fixing unlikely.
“There is no meeting of airlines where they agree to fix prices. Fixing prices would mean operating as a cartel, and that is not the case,” he said.
He explained that ticket prices differ widely because various aircraft types come with different operating costs.
“Each airline determines its fares based on its own operational costs,” he said.
Okonkwo added that airlines must also demonstrate financial viability to regulators as part of the requirements for maintaining their operating licences.
“At every point in time, you must prove to the regulators that you are financially viable and capable of sustaining operations,” he said.
He urged regulators to consider the fragile nature of the aviation industry when making policy decisions that affect airline operators.