Aviation fuel price still high despite reopening of Strait of Hormuz – CCO, United Nigeria Airlines

Despite the reopening of the strategic Strait of Hormuz following a memorandum of understanding (MoU) between the United States and Iran, Nigerian domestic airlines are yet to feel the financial relief of falling global oil prices.

While Brent crude reduced to $72.50 per barrel as commercial tanker traffic resumed across the Persian Gulf, the local price for aviation fuel (Jet-A1) in Nigeria remains high, costing between N1,600 and N1,700 per litre.

Speaking during an interactive session with the League of Airport and Aviation Correspondents (LAAC) on Thursday, Adedayo Olawuyi, Chief Commercial Officer (CCO) of United Nigeria Airlines (UNA), explained that local market conditions have detached from global crude drops, forcing domestic carriers to rely on revenue management strategies just to remain solvent.

According to Olawuyi, the current fuel regime is unsustainable when measured against current domestic ticket prices. While operational realities forced fuel prices to surge from N900 to N3,300 per litre earlier during the peak of global maritime disruptions, base airfares failed to reduce due to consumer purchasing limits.

“The truth is, it’s not sustainable for us,” Olawuyi stated candidly. “Even when we paid up to N3,300 per litre, ticket prices did not grow by 300 percent, or even 100 percent in that case. We are still selling tickets for N120,000. Our prices went up, but they have been balanced out strictly by demand and sales dynamics. Everyone is trying to use advanced revenue management principles to extract the best yield possible, but market forces are aggressively in play.”

Olawuyi noted that while the broader domestic market appears to be experiencing a seat capacity constriction, with fewer total seats in active deployment today than in previous years; United Nigeria Airlines has bucked the trend by consistently adding capacity.

He revealed a severe operational drain caused by bird strikes.

The airline, which has officially scaled to become Nigeria’s second-largest carrier by capacity and traffic volume, manages an average of 120 thousand to 130 thousand passengers monthly. However, keeping its nine-aircraft fleet in the air has become an expensive battle against bird strike.

“We had a week in May where, for four consecutive days, we suffered bird strikes. Every single day for four days, we lost an airplane to a bird strike. The impacts vary, sometimes the radome (nose cone) is destroyed, other times objects go directly into the engine. When you lose four aircraft out of a fleet of nine in a row, the commercial fallout is massive,” he explained.

Olawuyi detailed the severe immediate financial and brand penalties associated with these strikes to include instant revenue loss, operational penalties and long-term churn risk.

The airline urged the Federal Airports Authority of Nigeria (FAAN) to install advanced wildlife deterrence systems to manage bird migration seasons safely, warning that the industry cannot afford to wait for a major calamity before the issue is resolved.

While United Nigeria Airlines fully owns its current fleet Embraer and Boeing 737 platforms, Olawuyi stated that future long-haul and regional expansion will favour a flexible asset strategy to mitigate capital expenditure risks.

“If you look at the global airline industry, roughly 50 percent of aircraft are leased and 50 percent are owned. We are adopting this open approach. If we decide to launch long-haul routes, we won’t just shell out $200 million upfront to purchase an Airbus A330 without proof of concept. We will dry-lease first to test the market, see if the concept works, and manage our financial capacity intelligently.”

Turning to airport facilities, the CCO criticized the structural limitations of Nigeria’s primary gateways, pointing out that current terminal designs fail to facilitate smooth transit hubs. While the airline welcomes the modernization efforts under Minister Festus Keyamo, the operational layout makes domestic-to-regional passenger connections difficult.

Furthermore, he said peak-hour apron and taxying congestion at legacy hubs like Lagos Murtala Muhammed Airport (MMA2) routinely cause delays for early morning business flights.

“When you go there early in the morning between 6:00 AM and 8:00 AM, there are days it takes 15 minutes just to taxi out because five or six aircraft are juggling for the same restricted apron space,” Olawuyi explained. “Limitation of resources is a major challenge. New airlines are coming up every day—whether it’s Kali, Caliphate, or Abuja—and everybody is fighting for the exact same infrastructure.”