The Lagos Chamber of Commerce and Industry (LCCI) has tasked the Federal Government to urgently consider involving the Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Company (NNPC) Limited in making foreign exchange (forex) available for the importation of aviation fuel or JetA1.
It insisted that the aviation sector qualified for targeted financing to facilitate economic activities in the country, boost economic growth and avert an imminent recession.
Director-General of LCCI, Chinyere Almona, stated this while proffering solutions to the current crisis in the Nigerian aviation industry, adding: “The Chamber is concerned about the aviation crisis because of the systemic importance of air travel for the conduct of trade and commerce across borders.
“The Organised Private Sector (OPS) urges the Federal Government to take immediate steps toward resolving the crises in the aviation sector. Air transportation is considered one of the safest channels considering the despicable level of insecurity in the country. Hence, resolving the continued fuel crisis facing the safest transportation channel is crucial for the business community.
“While the Government tackles terrorists, bandits, and kidnappers who have taken over major highways in the country, the Government must immediately consider involving the CBN and the NNPC in making forex available for aviation fuel imports.
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However, the more sustainable solution would be refining Jet-A1 fuel for our local consumption. While we acknowledge that the current energy crisis is real and global, it is aggravating in Nigeria because we do not produce oil.”
She lamented that the crisis in Nigeria’s aviation industry had reached a worrisome level, as domestic airlines were faced with an astronomical hike in the price of aviation fuel, with the commodity rising from N300 per litre to over N800 per litre within five months.
The challenging operating environment has led to an unprecedented increase in airfares and continuous delays and flight cancellations by domestic airlines. The Federal Government has stated that there are no immediate solutions to the crisis currently rocking Nigeria’s aviation sector, claiming the issues are global,” she maintained.
She noted that the Airline Operators of Nigeria (AON) recently notified air transport passengers that the sector was experiencing a significant crisis.
The crisis according to her was (and still is) an acute scarcity of aviation fuel, which has caused intermittent flight delays and cancellations. Some airlines have been forced to shut down operations due to the harsh operating environment.
“With the rising insecurity that has bedeviled our road transport system, a safer option is air transportation. This portends challenges around the movement of goods and business conduct across locations. The Federal Government cannot afford to allow this sector to suffer from these crises.
Operators in the industry are faced with a double whammy issue of foreign exchange scarcity and the high cost of Jet-A1, which is a significant cost component in airline operations.
“We have noted that from the beginning of the year, aviation fuel scarcity has remained a persistent and unresolved problem that has impacted the cost-of-service delivery, as reflected in the rising cost of flights. Aviation fuel prices have risen from an average of N400 per litre as of February to about N800 per litre in recent times.
“With the business community not sure of any intervention to provide respite, the woes of the airline operators may be far from over. The earlier intervention by the National Assembly alongside the Central Bank of Nigeria (CBN), that saw the Nigerian National Petroleum Company Limited (NNPC), supply Jet-A1 at a discounted price of N480 per litre may not have achieved the desired results. The sector has continued to suffer from persistent shocks and disruptions to operations,” she stated.
