The viability of domestic airlines in Nigeria hangs in the balance as the escalating cost of jet fuel poses a grave threat to their operations. In less than eight months, the price of jet fuel has surged by a staggering 109%, putting immense pressure on local carriers.
The aviation industry has been grappling with the relentless rise in the cost of aviation fuel, commonly known as Jet A1, over the past two years. This surge has compelled airlines to adjust their operations by hiking ticket prices. However, the recent spike in jet fuel prices, particularly between July 2023 and February 2024, has left local carriers struggling to stay afloat.
Despite the formidable challenges posed by the exorbitant cost of jet fuel, Nigeria’s twelve scheduled airlines have soldiered on. However, there are ominous signs that some carriers may be forced to suspend their operations indefinitely if the situation persists.
George Uriesi, the Chief Operating Officer of Ibom Air, lamented the dire predicament facing airlines, highlighting the astronomical increase in jet fuel prices. He expressed concern that airlines, no matter how prudent, cannot absorb such a monumental surge in operating costs. Uriesi emphasized that the recent strengthening of the Naira provided temporary relief but warned that the situation remained unsustainable.
In a similar vein, Captain Ado Sanusi, the Managing Director of Aero Contractors, sounded a note of caution, warning that the situation could deteriorate further if Nigeria fails to commence the local refining of Jet A1. Sanusi underscored the urgency of refining jet fuel domestically to mitigate the industry’s heavy reliance on imports, which is exacerbated by currency fluctuations.
The federal government’s role in ensuring transparency in the importation of jet fuel was also emphasized by Sanusi, who stressed the importance of providing airlines with a clear outlook on pricing.
The ripple effects of the soaring jet fuel prices are already being felt by passengers, with airfare costs skyrocketing. A return ticket from Lagos to Abuja now commands a price exceeding N400,000, marking a staggering 300% increase from just two years ago.
The aviation sector in Nigeria stands at a crossroads, with the looming specter of airline closures casting a shadow over the industry’s future. Unless urgent measures are taken to address the root causes of the crisis, the skies over Nigeria may soon grow quieter, signaling the demise of its once-thriving aviation sector.
