As scarcity of aviation fuel bites harder 

Abiola Seun 

Airlines operators operating in the nation’s aviation sector have increased one way ticket from N50,000 it was pegged in February 2022 to between N75,000 to N100,000, investigation has shown.

This hike, according to stakeholders, was as a result of scarcity and hike of aviation fuel, also known as, Jet A1, that has continued to hit airline operators hard and reducing their profit margins.

As at the time of filing this report, it was gathered that Jet A1, has hit all time high as it currently sells for N822 per litre in Lagos, N859 in Abuja, N852 per litre in Port Harcourt while it sells for N890 and N892 in Yola and Maiduguri respectively.
 
This increment in price of Jet-A1, according to airline operators, has eaten up their profit, thereby, making profitability very slim for operators.

Also, Investigation, however, showed that the increase in the price of Jet A1 has made fuel constitute 70% of airlines operating cost as against 40% it was before the global energy crisis.

Also, the aviation fuel recorded a price hike of 268% between January 2022 and April 2022, moving from N190 to over N800 in five months and this has made domestic airline carriers in Nigeria threaten to shutdown their operations, citing rising jet fuel costs and the increasing cost of operation.

Due to the increase in Jet-A1, a return ticket across the country ranges from N140,000 to N200,000 depending on the time bookings were made. This has, thereby, make air travel out of the reach of middle class.

A visit to the website of commercial airline operators have shown that scarcity of aviation fuel is beginning to influence prices as an economy ticket has been reviewed upward by over 36.36 per cent.

For instance, Air peace economy (Flexi Domestic), 840 hours ticket from Lagos to Abuja for Monday trip as at 1000 hours on Saturday sells for N100,000; while first flight ticket for same Monday sells for N85,000.

 Air Peace Tuesday ticket to Abuja sells for between N75,000 to N80,000 as at the time of filing this report 

On Ibom Air, low demand routes go for N68,000 while high demand routes, such as Abuja to Lagos, Lagos To Abuja, Port Harcourt to Abuja, Lagos To Akwa Ibom sell for between N72,000 to N75,000 depending on the time of travel.

United Nigeria Airline ticket for Monday, 25th sells for 80,000 irrespective of the high demand routes while flights are not available for the low demand routes.

On Azman Air, a one way ticket from Lagos to Kaduna on Sunday, 24th July, goes for N99,749 while it sell for N85,000 on Monday. Lagos to Abuja, on Monday, as well, sells for N75,000.

Arik Air sells economy ticket for between N83,000 to N93,000, while its business class ticket has surged to a starting price of N115,000 to N132,000 for a one way trip. Most of its economy ticket from Lagos to Abuja has been sold out.

However, despite this price increment, airline operators have notified passengers of possible flight disruption due to the scarcity of Jet-A1.

The airlines under the aegis of Airline Operators of Nigeria (AON), in a statement made available to journalists, therefore, pleaded for the understanding of the travelling public, saying efforts are currently being made to address the development and restore normal flight operations. 

They said, “This is to notify the members of the public, especially, consumers of air transport services in the country, that the aviation sector has been hit by a major crisis with the acute scarcity of aviation fuel otherwise known as Jet-A1. For this reason, there will be major disruptions in scheduled flight operations including cancellations and unnecessary delays across all airports in the country. 

“This is a foreseen but unintended consequence of the aviation fuel scarcity in the country. We, therefore, plead for the understanding of the travelling public to bear with our members as efforts are currently being made to address the development and restore normal flight operations. AON is committed to rendering seamless and uninterrupted air transport service across the country.”

However, stakeholders have asked various airline operators to sell tickets to their customers according to increase in Jet A1 price.

Speaking, the President, Aviation Safety Round Table Initiative (ASRTI), Dr Gabriel Olowo said price increase is better than negotiating safety by cutting corners.


Olowo in a statement titled, ‘sell what you buy’, advised that given all the uncontrollable circumstances within the aviation sector, airlines should factor in extra costs recorded through Jet A1 cost.

He said, “My candid opinion to Airlines is that given these uncontrollable factors of production in the Airline Industry sector, demand will definitely drop but much better than cut corners and plan an accident.

“If a trip fuel is 4000litres for a one hour on jet (LOS-ABV) for example at N800 per Itr, which gives N3,200,000 and a load factor of 100 passengers, this means fuel cost per passenger is N32.000 and this is approximately 30% of total cost and this will translate to N107.000 tariff for one way journey.”

He continued, “PHCN has introduced Premium tariff on power and those who can afford it are settling for it,” he stated.

He, however, said airlines should discourage negative competition at this time saying, “This is not the time for frivolous and reckless competition nor uneconomic patriotism. Operators should intensify cooperation, collaboration, consolidation, prune schedules to minimize perishable seats and maximize load factor.

“The spirit of Spring Alliance must be strengthened. The sector must not negotiate an accident. NCAA is encouraged to be more vigilant to watch cutting corners,” he said.

On his part, the President, Aircraft Owners and Pilots Association of Nigeria (AOPAN), Alexander Nwuba, said the airline operators should increase their fare to meet current market realities.

According to him, those who can afford the ticket price will fly while others who can’t, will make use of the alternative mode of transportation to get to their desired destinations and when the price of aviation fuel goes down, the price will return to the normal price.

Nwuba, a former Chief Executive Officer, Associated Airlines, further stated that aviation is the life wire of the nation’s economy, hence, short term solutions shouldn’t be found to challenges facing it.

He said, “We need to find a solution to the crisis. Is it not possible we raise fare and others that cannot afford to fly goes by other means of transportation. Aviation is about moving the economy. We shouldn’t look for short term to these crisis but, long term,’ he said.

“FG should allow Airlines to charge economic rates for air travel in Nigeria. Anyone that can afford to pay the economic rate should do so. Those who cannot afford the new rates should travel by road. Nigeria must not be turned to a Socialist Republic. We cannot afford to deploy tax payers funds for the travel of the rich. It will amount to a grave injustice to do so.”

Airlines have seen economic reality, they understand consumer inelasticity, if fares move beyond certain numbers, passengers will disappear to other modes, so they lose, insecurity in other modes have always supported the industry, but, there’s a limit,” he cautioned.