By EDU ABADE, JONHMARK UKOKO, ADAKU WALTER and Ben Oreva Okolor
There is uncertainty over a threat by Airline Operators of Nigeria (AON) that with effect from May 9, 2022, its members will suspend flight operations across the country due to the high cost of aviation fuel, which has hit N700 per litre as against N190 per litre before the Russia-Ukraine war.
However, there is confusion in the air as some of the operators have said that they would continue operations. A statement issued by the AON advised those who intend to travel by air to make alternative arrangements and avoid being stranded at the nation’s airports.
AON said: “It is with a great sense of responsibility and patriotism that the AON has continued to deploy and subsidize its services to its customers in the last four months, despite the steady increase in the price of Jet A1 and other operating costs.
“Over time, aviation fuel price has risen from N190 per liter to N700 per litre currently.
No airline in the world can absolve this kind of sudden shock from such an astronomical rise over a short period. While aviation fuel is said to cost about 40 per cent of airlines operating cost globally, the present hike has shut up Nigeria’s operating cost to about 95 per cent.
“In the face of this, airlines have engaged the federal government, the National Assembly, Nigeria National Petroleum Corporation Limited and oil marketers with the view to bringing the cost of Jet A1 down, which has currently made the unit cost per seat for a one hour flight in Nigeria today to an average of N120,000.
The latter cannot be fully passed to passengers who are already experiencing a lot of difficulties,” the statement reads.
The statement added that while the AON appreciates efforts of the President Muhammadu Buhari administration to ensure that air transport in Nigeria grows, Minister of Aviation, Hadi Sirika lamented that the cost of aviation fuel has continued to rise, thereby creating huge pressure on the sustainability of operations and financial viability of the airlines, adding: “This is unsustainable and the airlines can no longer absorb the pressure.”
But the management of Ibom Airlines Limited said it will not suspend flight operations and distanced itself from the announcement of the AON and that in the present circumstances, it could not volunteer to stop operating and would continue normal operations on Monday, May 9, 2022 and beyond.
A statement issued by the management, explained that airlines have their unique business model and pressures, and it believes that in spite of the escalating fuel prices, airlines planning to stop operations would rather exacerbate the already bad situation.
Explaining the reasons for its action, the airline stated that it has financial obligations to suppliers, financiers and staff, which depend on uninterrupted flow of revenue to service.
The statement added: “More importantly is the fact that having been paid by customers in advance for flight bookings we are bound by contract to deliver the services already paid for, to avoid exposing the airline to avoidable litigations.” Besides, Minister of Aviation, Hadi Sirika, has appealed to airline operators not to suspend their operations as planned, considering the multiplier effect it would have on travelers and the nation’s economy.
A statement issued by the Special Assistant to the Minister on Public Affairs, James Odaudu, expressed worry over the situation, saying it had continued to engage with agencies, institutions and individuals to assist the airlines in respect of the rising cost of Jet A1.
On his part, Chairman, House of Representatives Committee on Aviation, Nnolim Nnaji, has appealed to the airline operators to rescind action on its planned suspension of operations due to the escalating cost of Jet-A1. Nnaji, who praised the operators for their patriotism, urged them not to ground their operations, stressing that such will inflict more pains on the already distressed economy.
He regretted that despite the last intervention of the leadership of the House of Representatives, Aviation and other relevant Committees, the problem remained unabated.
He assured the airlines that the committee and House leadership were not sleeping over their plight as a meeting of the stakeholders including the chairmen of the relevant committees has been summoned for Monday, May 9, to address their matter and assured the airline operators that the National Assembly was determined to ensure that the aviation fuel crisis was urgently resolved as air transportation remained the safest mode of travel. In a related development, the local airlines operators have defied appeals by the National Assembly and the Ministry of Aviation to shut down their operations as hundreds of passengers remain stranded at the airports.
In a statement issued by the local airlines which include Air Peace, Arik Air, Aero Contractors, Azman Air, Dana Air, Max Air and United Nigeria Airlines, they insisted on suspending their operations due to Federal Government’s inability to provide immediate solutions to the unbearable cost of aviation fuel that currently sells at N700 per litre despite issuing the threat to shut down operations.
President of the Airline Operators of Nigeria, Abdulmunaf Yunusa, said it remains resolute on the decision to suspend their operations. Yunusa stated that the airline operators are patriotic citizens and are doing all they can to protect the flying public contrary to what some subjective schools of thought might suggest, adding that this is a collective sacrifice for the common interest of the country.
He expressed regrets over the position of Ibom Air against the AON’s decision, adding that while the airline may reasons for its action, it is pertinent to note that they equally accepted in their statement that the Jet A1 situation poses existential threat to the air transport industry in Nigeria and that the remains unsustainable. “May we use this medium to clearly state that airlines are not on strike.
We are private investors who do not run our airlines with public funds to be able to continue to pay upfront in cash at N700 per litre for JetA1 which has increased our cost on daily basis to about 95 per cent. This is totally unsustainable. And its consequences, if allowed to stay, will be borne by the passengers; which is what we are trying to prevent.
“To this end therefore, we remain resolute in our resolve to find a lasting solution to this crucial problem of national emergency and once again use this medium to appeal to the conscience of our esteemed passengers for their understanding,” the AON boss stated.
However,, in a confusing twist and turn, Dana Air, Overland Airways, Aero Contractors and Arik are among airlines that decided against suspending flight operations. In a statement issued by Dana Airline’s Communications and Marketing Manager, Kingsley Ezenwa, the airline affirmed its support for the agitations of AON, but stressed that it will not participate in the planned suspension of flight operations on Monday.
This followed after Deputy Chief Executive Officer, Dana Air, Sukh Mann, joined other airline operators to sign a memorandum of the AON insisting on its firm resolution to shut down operations. But according to Dana Airline, the recent press statement issued by the Airline Operators of Nigeria, has become necessary for them to take a stand in the overall interest of their guests, corporate partners, staff and the industry at large.
In the same vein, Overland Airways Limited said. will continue to provide full service to its customers and general public with normal operations on Monday 09 May 2022 and beyond, stating that airlines stoping operations is not the solution to the problem.
The airline management in a statement issued by Mrs. C. M. Mohammed, said it has commercial and legal obligations to its customers, financiers and employees, which she said “is a promise that must be honoured.” “Overland Airways acknowledges the existential threat that these runaway fuel price increases pose to the Air transport industry in Nigeria.
However, we do not believe that Air suspending operations is the solution.” Also, management of Arik Air Limited and Aero Contractors assured the traveling public that they will operate all scheduled flights. In a joint statement, their managements identified’ with and endorsed the efforts of the Airline Operators of Nigeria to bring about a conducive operating environment for Nigerian carriers as the current price of JET A1 is unsustainable and could result in the untimely demise of most airlines.
They however expressed assurance that the government is looking at the issues raised by the AON and will come up with a decision that will be in the best interest of the industry and the traveling public.
They said passengers, who are booked flights both Arik Air and Aero Contractors on Monday and beyond should proceed to the airports of departure for boarding to their various destinations.
And in the latest drama and confusion, goodnews filtered in from the stable of AON as it called off the planned suspension of flights nationwide from Monday May 9, 2022.
This was contained in a statement signed by the President of AON, Alhaji Abdulmunaf Yunusa Sarina, and endorsed by other members who said they have listened to the appeal by stakeholders and the federal government for them not to withdraw their services.
The statement reads in part: ”The Airline Operators of Nigeria (AON) wishes to inform the general public that further to numerous calls from the highest echelons in government with promises to urgently intervene in the crises being faced by airlines due to the astronomic and continuously rising cost of JetA1, that the AON has acceded to requests to withdraw the action for the time being while we allow for a fresh round of dialogue with government in the hope of reaching an amicable solution.”
“We have also reached this decision with the highest consideration for our esteemed customers who have been faced with uncertainty over the last few days and to enable them to have access to travel to their various destinations for the time being during the period of discussions with relevant authorities.”
“In view of the above and in the interest of national economy and security considerations, AON hereby wishes to notify the general public that the earlier announced shutdown of operations on May 9, 2022 is hereby suspended in good fate pending the outcome of hopefully fruitful engagement with government.”
But Air Peace has reportedly suspended local and regional flights. Federal Competition and Consumer Protection Commission (FCCPC) had condemned the planned suspension of flights by the AON, stating that it was illegal.
It said: “The Commission encourages and implores domestic airlines to consider the effect of the proposed shutdown on passengers and the magnitude of difficulties and hardship associated with such an action.
“The Commission does not trivialise the disruption and potential challenge to business continuity and survivability an inordinately high cost of jet fuel presents to domestic aviation, especially coupled with other rising cost of operations and foreign exchange.
“It should also be noted that the Commission has been in discussion with the leadership of major fuel marketers to understand the global supply challenges and possible steps to ameliorate same.
“Accordingly, the Commission strongly advocates engagement among all stakeholders across the value chain to mitigate the current constraints and develop an acceptable interim arrangement to address problems and costs associated with global supply constraints on account of a war, sanctions associated with the war, and a fragile ongoing post pandemic recovery in the aviation industry.
“The Commission says her major concerned is the rising consumer feedbacks; that why would airlines continued to sell tickets beyond the date announced for the proposed service shutdown?
“To this to many consumers amount to exploitation and a violation of law to purport to sell a service that the service provider knows, it will not, or does not intend to provide or deliver.
“It is misleading and deceptive under S.123 of the FCCPA to represent a service will be delivered on a certain date when the provider knows the same is false or improbable.
“The Commission is optimistic that airline operators will not deliberately sell tickets for flights they do not intend to operate, and is as such hopeful that a solution short of a shutdown will emerge accordingly.”