Concerns are raised by increase in airfare due to limited aviation fuel
Due to the ongoing shortage of aviation fuel and the rising expense of operating an airline, there appears to be no end to the significant hikes in domestic flight prices.
Between January of this year, when they were between N25,000 and N45,000 for a 50-minute journey, and the current range of between N65,000 and N100,000 – and even above in some cases – for the same distance, air costs have nearly doubled.
Due to the airlines’ debt, aviation fuel marketers have stopped selling fuel to them, which has led to the current predicament.
In his speech on the state of the aviation industry at the Murtala Muhammed Airport in Lagos, on August 3, 2022. the Director-General of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu, verified the development.
Musa Nuhu said, “Some of the airlines have outstanding debts and the oil marketers want cash from them. As a result of that, they have to go and look for money. That is what has caused most of the delays and flight cancellations you are seeing. I agree that Jet A1 (aviation fuel) is expensive, and scarce in some places.”
He voiced his concern about the rising price of fuel, attributing it to the crisis between Russia and Ukraine as well as the lack of available foreign currency, which has made it difficult to import fuel.
On Thursday, August 4, 2022, an Arik Air flight from Lagos to Jos reached a high of N112,024; however, on Friday, August 5, 2022, it will dip to N93,452 before rising to N115,833 on Saturday, August 6.
On Thursday, August 4, 2022, a Lagos to Owerri Air Peace flight cost N100,000. On Friday, August 5, 2022, it will cost N150,000. On Saturday, August 6, 2022, it will cost N82,000 again.
A flight from Lagos to Abuja on Ibom Air would cost N78,000 until Saturday beginning on Thursday, August 4, 2022.
On August 3, 2022, United Nigeria Airlines offered flights from Lagos to Abuja for N78,000. However, investigations revealed that there will be a continuous amount of N68,750 from August 4 to August 6, 2022.
On August 3, 2022, the cost of an AirPeace flight from Lagos to Abuja was N82,000; however, on August 4, 2022, it fluctuated between N75,000 and N70,000. On August 5, 2022, the price of an 8:40am flight to Abuja reached N100,000, as shown in the screenshot below.’
On August 3, 2022, the cost of an Arik Air flight from Lagos to Abuja might reach N80,000. These airfares changed in price on Thursday between N66,310 and N71,071.
Flights from Lagos to Abuja on Friday at 6:50 a.m. cost N66,310 for economy class and N123,452 for business class.
At 12:05 PM, the price of the same flight’s economy class increased to N71,071. At 2:40 pm, the price of an economy ticket increased to N75,833 while the price of a business class ticket remained the same at N123,452.
On August 4, 2022, a Green Airways flight from Lagos to Abuja at five in the morning cost N81,500; the same flight at five in the evening cost N61,500.
Chika Mbonu, a business analyst with Arise, mentioned that travelers may not be able to purchase flights as much as they formerly could.
When security was at its peak, a lot of people went to aviation, according to Mbonu. Their load factors improved. As people became accustomed to paying N25,000 for a 45-minute flight, the price was doubled.
“That chased several people away. The inflation in the environment and challenges in the industry that have to do with aviation fuel have made things worse. The issue is that the industry is crying for consolidation. There were 10 airlines, now eight are remaining.”
Increases in airfare, according to travel specialist Mr. Olumide Ohunayo, are here to stay.
“I doubt that ticket prices would decrease unless the cost of aviation fuel and the value of the naira both start to decline. Because their alternatives don’t meet security requirements, you know that travelers will choose to fly, Ohunayo stated.
Dr. Gbenga Olowo, the president of the Aviation RoundTable (ART), urged airlines to avoid running empty seats for the sake of competitiveness.
Awolowo said, “This is the time spring alliance should come alive. Make sure you operate a harmonised schedule. The seat that is not sold is perishable. Every seat must be sold at whatever tariff you fix. If Azman is operating this flight, all of you fill that aircraft, same for Air Peace.
“This would make the flight regular and safe. This is compared to stand-alone operations where everyone is carrying 40 or 50 passengers per airline.”
George Uriesi, the chief operating officer of Ibom Air, claimed that Nigeria’s aviation system was created to frustrate airlines during the 26th League of Airport and Aviation Correspondents (LAAC) annual conference on July 28, 2022.
According to Uresi, the climate in which Nigerian airlines operate is limiting their production.
He said, “You are operating within a systematic limiting environment that makes it harder to be as productive as your colleagues in Europe, Asia and so on, who fly their class C aeroplanes (737s and A320s).
“At the end of the day, the system is set up to threaten the survivability of airlines in Nigeria. There is no way to it. You will buy aeroplanes more expensive, and pay expensive insurance costs. You will continue to sell in naira and maintain your aeroplane in dollars. On top of it, when it’s harmattan you can’t fly the aeroplane.”
Recently, airline operators issued a nationwide warning to passengers about the possibility of flight cancellations owing to a lack of aviation fuel.
Air travelers were warned to anticipate delays and cancellations going forward in the statement, which was signed by Professor Obiora Okonkwo, Secretary of the Airline Operators of Nigeria (AON).
Only eight local airlines currently operate in Nigerian airspace. They are Max Air, Azman, Green Africa, Arik Air, Air Peace, Overland, United Nigeria Airlines, and Ibom Air.
Aero Contractors and Dana Air have already been grounded.
Speaking on the management of the airline’s decision to ground Dana Air due to safety concerns as well as the voluntary suspension of Aero Contractors operations, Nuhu said that this was done to prevent accidents.
He said, “We have conducted economic and financial audits on Aero Contractors. When Aero Contractors’ management came to us, they told us that they planned to suspend their operations voluntarily. We are not here to kill any airline as we commend Aero Contractors for trying to restructure and re-organise the airline. We did a technical audit with Aero Contractors and they had no issue with us but had financial issues. They are reorganizing. We are fully supporting all airlines and other ancillary services. We commend Aero Contractors for that.
“For Dana Airlines, they underwent an economic audit and it was not good. We saw a series of violations that were of great concern to us. The audits are ongoing; we have not concluded. I participated in the meetings and discussions on Dana. We are still talking with Dana. When we are done, we will give you the report. For now, they will remain grounded until they resolve their issue.”
The NCAA president emphasized that he would rather shut down the airlines “than allow them to continue operating dangerously,” acknowledging the fragile circumstances of the airlines that are not receiving a return on investment.
Professor Anthony Kila, the director of the Centre for International Advanced and Professional Studies (CIAPS), has proposed the establishment of a special bank to finance aviation infrastructure and aid airlines who are going through difficult circumstances.
Kila, who spoke at the LAAC event, claimed that since airlines can no longer get aviation funding from the government or through aviation desks in commercial banks, it is essential to make access to foreign exchange for airlines easier.