Air fares may rise as aviation fuel hits N822 per litre


  • Airline operators propose 25% surcharge, flay FAAN over closure of runway 18L

Travelers may pay more for air fares as the price of Aviation Fuel Jet A1 fuel now sells at over N800 per litre across the country. Also, airline operators are set to increase fares through a proposed 25 per cent surcharge.

The Trumpet learnt that jet A1 in Lagos sells for N822 per litre, N859 in the Federal Capital Territory (FCT) Abuja, N852 per litre in Port Harcourt, while it sells for N890 in Yola and N892 in Maiduguri.

Airline operators under the auspices of the Airline Operators of Nigeria (AON) demanded the removal of five per cent on Fuel Surcharge by the Federal Government, leading to a situation where almost all airlines are beginning to anticipate delays and cancellations due to increase which will jack up.

The new price regime may have caused fear in many airlines as the conditions for operating in Nigeria currently were strangulating, a situation an airline operator described as extremely serious and further reduced the profit margin that was hitherto almost seemingly non-existent.

“Aero Contractors just suspended operations and you do know that the non-stop hike in the price of Jet A1 is partly a contributory factor to that. We used to complain when Jet A1 was taking 40 per cent of our operating cost, but now that has doubled and there is no respite in sight.

“This will indeed affect operations because what was planned for has gone straight out of the window and this may lead to increment because the airlines cannot handle this cost on their own and this is just fuel, we’ve not talked of salaries and maintenance of the aircraft. If we get the product tomorrow we will operate as scheduled, but it is not that easy as someone has to pay for it and there may be delays, truly airlines are suffering.”

Disturbed by the steady increase in cost of operations in the aviation sector, Airline Operators of Nigeria (AON) have requested that the Nigerian Civil Aviation Authority (NCAA) approve its proposed fuel surcharge.

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This, they said, would help to cushion the effect of a continuous hike in the price of Jet A-1 (aviation fuel) on the operations of airlines in the country.

This is contained in a letter signed by AON President, Abdulmunaf Yunusa, addressed to the Director- General of NCAA and dated July 18, 2022. The implication of this is that air fares would rise and further compound air travelers’ woes.

The airline operators indicated that apart from the “crippling effect” of the intermittent shortages of Jet A-1, the price has risen from N200 per litre in February 2022 to over N800 currently.

Such increment, it said, had consequently shut up the operational cost of airlines by over 130 per cent, even as the airlines are unable to increase fares; and also suffer from the challenge of sourcing foreign exchange to conduct operations due to biting scarcity.

“To forestall a backlash and total shutdown of the system, airlines are hoping to resort to an introduction of a fuel surcharge of between 25 per cent and 40 per cent of NUC as a way of offsetting the additional burden brought about by increased fuel cost bearing in mind that jet fuel accounts for about 40 per cent of total operational expenses,” it stated.

To this end, the airline operators, therefore, requested a review of some policies by the NCAA which include: a review of the decision that airlines are required to obtain approval for an initial three months before implementation of a fuel surcharge; waiver of demand that airlines pay an additional 5 per cent on the fuel surcharge entirely separate from the 5 per cent Ticket Sales Charge (TSC).”

They also requested that taxes should be based on the proportion of the fare due to airlines, meaning that the fuel surcharge should be exempted from the TSC and called for an urgent meeting of chief executive officers of airlines to urgently address the issues.

Meanwhile, the AON blamed the Federal Airports Authority of Nigeria (FAAN) for closure of the 18L runway on a short notice for causing additional costs to the airlines operations.

The operators questioned why FAAN did not ensure the contractor do the work at night as the current move is disrupting airlines operations.

In a letter written by President of AON, Abdulmunaf Yunusa, the group flayed the 90-day period stipulated for the installation of the Air Field Lighting, stressing that the closure of the main domestic runway of MMA automatically adds an additional 10-15 per cent more fuel costs per sector into and out of MMA, based on the additional flight and taxi time incurred.

  The group urged he Managing Director of the FAAN, Captain Rabiu Yadudu, to convene a stakeholders consultation meeting to urgently review the closure of Runway 18L and discuss the procedure for the project in such a way that it would limit the cost implications on airlines and disruption of normal flight operations.

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