Nigerian airlines are facing increasing pressure due to the soaring cost of aviation fuel, or Jet A1, despite its availability in the country. A litre of Jet A1 currently sells for about N2,130 in Lagos and Abuja, while prices range between N2,180 and N2,230 per litre at airports outside these major aviation hubs. This high cost is driving up operating expenses for airlines, making it challenging for them to operate profitably.
The high cost of Jet A1 is particularly difficult for indigenous carriers, as most of their revenues are generated in naira, while a substantial portion of their operating costs is either dollar-denominated or linked to foreign exchange. This mismatch makes it hard for airlines to manage their finances effectively. An airline source noted that the situation is dire and called on the government to intervene to prevent the total collapse of operating carriers.
Managing Director of Aero Contractors, Ado Sanusi, confirmed that Jet A1 is available in the country, dismissing allegations of scarcity. However, he agreed that the cost of the product remains a major concern for operators. Sanusi noted that the emergence of the Dangote Refinery has made the paucity of the product difficult, but the high cost is the primary issue.
According to Sanusi, Jet A1 currently sells for about N2,000 per litre in Lagos, while the price is slightly higher outside Lagos by approximately N100 per litre. He clarified that Aero Contractors is not indebted to aviation fuel marketers, as the airline has a policy of settling its fuel bills as soon as they are presented. This ensures that the airline maintains a good relationship with its fuel suppliers.
The high cost of aviation fuel is affecting the operations of Nigerian airlines, making it challenging for them to compete with international carriers. The airlines are calling for government intervention to address the issue and prevent the collapse of the industry. The government is yet to respond to the airlines' pleas, but it is essential that it takes action to support the industry.
The aviation industry is a critical sector of the Nigerian economy, providing employment and transportation services to millions of people. The collapse of the industry would have far-reaching consequences, including job losses and reduced economic activity. Therefore, it is crucial that the government takes steps to address the challenges facing the industry.
The issue of high aviation fuel costs is not unique to Nigeria, but the country's economic challenges have exacerbated the problem. The government must work with stakeholders to find a solution to the issue and ensure the sustainability of the aviation industry. This may involve providing subsidies or incentives to airlines to help them manage their costs and remain competitive.
Key points
- Nigerian airlines are struggling with high aviation fuel costs despite the availability of the product in the country.
- The high cost of Jet A1 is particularly challenging for indigenous carriers due to the mismatch between their revenue and operating costs.
- The government is urged to intervene to address the issue and prevent the collapse of the industry.
