BusinessDay

Three airlines may soon shut down over aviation fuel price – Operators

The Airline Operators of Nigeria, (AON) has disclosed that three airlines may be shutting down in a few weeks over the continuous rise in aviation fuel.

The operators said at present, a litre of aviation fuel has risen to N714 per litre, making it difficult for airlines to sustain their operations.

Speaking during the ongoing National Aviation Conference by the Federal Airports Authority of Nigeria (FAAN) at the International Conference Centre, Abuja, Allen Onyema, vice president of AON and the chairman of Air Peace said “If nothing is done concerning the cost of aviation fuel, the fuel crisis will take away three airlines in Nigeria in few weeks.”

Onyema said the current fuel crisis made the airlines run to the government and the federal government gave the airlines 10,000 metric tonnes of fuel at the cost at the cost of N580 per litre in Lagos and about N607 per litre outside Lagos.

He disclosed that airlines will start lifting the fuel by Thursday, adding that the aviation fuel crisis is global and some airlines outside Nigeria have shut down operations over aviation fuel price.

“Aviation fuel price is not the only issue. Since the global shut down as a result of COVID-19, most airlines all over the world, including Nigerian airlines have not recovered from COVID-19, except those whose countries have injected so much funds to assist them.

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“This is no body’s fault. It just happened. Government has tried it’s best by giving us this aviation fuel. Aviation fuel prices may take airlines out, not only in Nigeria but every where in the world. Some airlines outside Nigeria have shut down because of the rising cost of aviation fuel. If these things are not addressed in Nigeria, it can affect the bottom line of all airlines in Nigeria,” he said.

“We have not started lifting the 10,000 metric tonnes of aviation fuel. We will start lifting this fuel by Thursday.
We have come to realize that there is little or nothing the committee set up to regulate aviation fuel prices can do because this is as a result of foreign exchange and price of oil all over the world now.

“The fuel marketers will sell according to what they are paying. The cost of aviation fuel has increased even in London and every other country. Our own is worse because of the increase in foriegn exchange,” Onyema explained.

The AON vice president said the current aviation fuel crisis is further compounded by the multiple taxations, adding that over 70 airlines have gone under in Nigeria as a result of the multiple taxations.

He explained that when airline operators decided to charge N50,000 as base fare, they looked at cost per seat and discovered that airlines will still not make profit if they charge N60,000 as base fare because multiple taxations erode the revenues of airlines.

He further explained that apart from Passenger Service Charges and charges by the Nigerian Air space Management Agency, (NAMA), airlines pay 37 other charges to aviation agencies.

“After we have paid all these charges on a N50,000 ticket, we will be left with about N12,000. From this amount, we still have to pay for salaries and fuel. Airlines are now cashiers; always paying money to every one,” Onyema added.

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