BusinessDay

Airlines seen shifting to smaller planes over aviation fuel scarcity

The lingering scarcity of JET A-1, also known as aviation fuel, may force airlines in Nigeria to stop using big planes and turn to smaller aircraft to conserve fuel, industry stakeholders have said.

BusinessDay gathered that airlines were already recording low bookings following the increase in airfares. As a result, airlines with bigger planes fly half full, leading to increased operational costs.

Findings show that older and bigger aircraft cost airlines more on maintenance, operations and fuel consumption than smaller and younger ones.

The Airline Operators of Nigeria recently lamented that the price of aviation fuel, which was around N280-290 per litre in December, had risen to more than N410 in Lagos, N422 in Abuja and Port Harcourt, and N429 in Kano.

They said on top of the continued rise in the price, the supply of aviation fuel at several airports had been inadequate, thereby causing delays.

They said sometimes, airlines had to wait for fuel to be supplied at airports across the country.

Olumide Ohunayo, an aviation analyst, told BusinessDay that if the scarcity persisted, airlines might delay, cancel and merge flights.

He said fares might not increase because there was already a 100 percent increase in fares.

According to him, there are indications that airlines with big planes will pack their planes and use smaller planes that are fuel-efficient.

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Airlines with leased aircraft may return them to their owners, pending when the scarcity would end, to avoid accumulating costs, he added.

“Airlines with leased aircraft may no longer afford the money to pay to their lessors; so it may be best for them to either return these aircraft or renegotiate contracts with partners,” he said.

Dana Air, which has the biggest aircraft operated by a domestic carrier in Nigeria, apologised to its customers last Thursday for recent flight delays, citing fuel scarcity as reason for the delay.

The airline said it was working with its partners to significantly mitigate the challenge, adding that it had made major inroads in this area with its key suppliers.

It said it would continue to do its best to minimise any foreseeable challenges while hoping that the situation improves generally for all carriers as soon as possible.

The airline said, “We admit that we have been falling short on this commitment in the last few days and not living up to our promise to offer a reliable schedule and on-time performance that we have come to be known for.

“We accept that our recent disruptions due to ramp congestion, bad weather, and most recently, scarcity of fuel, would have affected your plans.”

BusinessDay had earlier reported that as maintenance and operating costs of airlines kept rising, airlines were buying smaller, fuel-efficient and low-age aircraft in a bid to bring down the cost of operations.

Findings show that airlines are gradually shifting from buying big aircraft such as Boeing 737, Boeing 727, Boeing 747, and MD 83 to smaller and more fuel-efficient aircraft such as ERJ 145 hopper jets, Embraer 195-E2, BRJ-900, and Dash 8-400 for domestic and regional operations.

Seyi Adewale, chief executive officer at Mainstream Cargo Limited, told BusinessDay that the relative instability being experienced in the sector had allowed domestic airline operators (or managers) to understand the business side of aviation and to develop smarter strategies to operate more efficiently and profitably.

Adewale said the recent aircraft purchase types and orders revealed a shift towards buying aircraft types with good fuel efficiency, better seat (space) management, lower age, and smaller cargo hold.

According to him, the advantages of having a low-cost business ideology and operating model is that it gives passengers alternatives, especially those that are cost-sensitive, quick turnaround due to reduced ‘niceties’ and passenger numbers and more routes.

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