More Nigerian airlines may collapse, besides 70 that have folded up
By Jeph Ajobaju, Chief Copy Editor
More than 70 airlines have folded up in Nigeria in recent years and three in operation may collapse in a matter of weeks, the Airline Operators of Nigeria (AON) has said.
AON blamed the collapse on excessive charges by regulators, among other causes, but the current major one is the high cost of aviation fuel, also called Jet A1.
Air Peace Chairman Allen Onyema tabled the matter on behalf of AON at the National Aviation Conference organised by the Federal Airports Authority of Nigeria (FAAN) in Abuja.
He said the cost of aviation fuel keeps on rising despite some intervention from the government.
“There are so many issues in the aviation industry. Issues like high taxes are making airlines to be unprofitable here.
“We pay excessive charges to the Nigerian Airspace Management Agency [NAMA]. Paying navigation charges is absurd for domestic operations. The mortality rate of airlines in Nigeria is alarming. Over 70 airlines have gone into extinction in the last few years,” Onyeama lamented.
“The current fuel crisis will take away three airlines in the next weeks. How do we make money in a situation where we pay salaries and charges to different aviation agencies?”
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Fuel stations closing down
Hikes in the prices of aviation fuel and diesel, both deregulated products, have led to the collapse of businesses across sectors.
Natural Oil and Gas Suppliers Association (NOGSA) National President Bennett Korie confirmed that about 70 per cent of filling stations have closed shop due to the high cost of diesel.
He said the outlets shut down because they could not afford to buy diesel at the current price of N850 per litre to power their trucks that transport petrol to their stations nationwide.
Onyema also stressed that the hike in aviation fuel price puts a severe strain domestic airlines even though Abuja has given them some volume of Jet A1, per The PUNCH.
“That is why we ran to the government and the federal government has given us about 10,000 metric tonnes of fuel at the cost of N580/litre in Lagos and about N607/litre outside Lagos,” he disclosed
“This is not the only issue …. Most airlines all over the world, including Nigeria, have not recovered from COVID-19, except those whose countries have injected so much funds to assist airlines.
“This is nobody’s fault. It just happened. The government has tried its best by giving us this aviation fuel. This aviation fuel can take airlines out, not only in Nigeria but everywhere in the world.”
Onyema said some airlines in other countries have closed down because of rising aviation fuel price, and the concerns should be addressed in Nigeria to avoid affecting the bottom line of operators.
Govt intervention
“The government of the day was very magnanimous, kind, listened to us [domestic airlines] and put a lot of things in motion to manage the impact of the aviation fuel price increase,” United Nigeria Airlines Chairman Obiora Okonkwo added.
“We are very happy and grateful to them but the truth of the situation is that those initiatives taken are still at the implementation stage. They have not been fully implemented, so we are not feeling the impact yet.
“[The price of] aviation fuel has continued to rise but I can tell you that some of those promises have been implemented and the impacts, we hope, we will feel soon.”
The high price of aviation fuel has led to a jump in airfares. A one-hour flight ticket that cost N30,000 has risen to N50,000 on all domestic carriers.