Local airlines risk collapse as Jet-A1 hits N714/litre

Local airline operators, yesterday, said that a number of them now risk collapse barring availability of affordable aviation fuel to sustain commercial operations.

They said besides the fuel scarcity that is disrupting scheduled operations, the prevailing market rate of N690-N714/litre was unsustainable.

In a related development, other stakeholders in the aviation value-chain also bemoaned the effect of weak Naira-to-Dollar exchange rate on critical services like fuel supply, ground handling, and catering.

Vice President of the Airline Operators of Nigeria (AON), Allen Onyema, at the ongoing Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) in Abuja, did warn that if the present challenge of aviation fuel was not fully addressed, about three airlines may quit operations due to unbearable cost of operations.

Onyema noted that the aviation fuel challenge was not exclusive to Nigeria, but “ours is made worse because of the slump in naira value against major currencies, especially, the dollars”.

He noted that the recent intervention by the Federal Government led to the approval of 10,000 metric tonnes of aviation fuel, though yet to be accessed by the beneficiary airlines.

Onyema was, however, optimistic that the airlines would start lifting the subsidised fuel by today (Thursday).

The operators said it was regrettable that the aviation fuel that sold for N200/litre barely 18 months ago has increased by more than 300 per cent.

“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 per litre in Lagos and about N607 per litre outside Lagos.

“This is not the only issue. Since the COVID-19 crisis, most airlines all over the world, including Nigeria, have not recovered from the pandemic, except those whose countries have injected much funds to assist them. This (pandemic) is nobody’s fault; it just happened. Government has tried its best by giving us this aviation fuel. This aviation fuel can take airlines out, not only in Nigeria but also everywhere in the world.

“Some airlines outside Nigeria have closed down because of the effects of rising aviation fuel. If these things are not addressed in Nigeria, it can affect the bottom-line of all airlines in Nigeria,” Onyema said.

Other players, including aviation fuel marketers, ground handling companies and catering services in their separate presentations, complained about the state of infrastructure at some of the airports, though added that FAAN in the last three years had improved on facilities at the aerodromes.

Vice Chairman, Aviation Ground Handling Association of Nigeria (AGHAN), Bashir Ahmed, decried the level of infrastructure at most of the airports, saying it limits the turnaround time of operators at the apron.

According to Ahmed, the scarcity of foreign exchange further reduces the operations and expansion of ground handling businesses in Nigeria. He appealed to the Federal Government to take a critical look at the challenges in the industry and devise a means to address them.

“We still want to appeal to the Federal Government to grant waivers to handling companies on importation of ground handling equipment. Also, we need more scanning machines by FAAN to further improve our operations and create seamless services to our clients and the airlines,” Ahmed said.