Passengers will face more flight delays and cancellations as a result of the aviation fuel crisis – See details

By Adeleye Kunle

Airline passengers will face more flight delays and cancellations in the coming days as a result of the closure of Runway 18L, an increase in aviation fuel known as Jet A1, and the suspension of aero contractors and Dana airlines.

The Airlines Operators of Nigeria, AON, has also requested that the Federal Aviation Authority of Nigeria, FAAN, intervene in the situation, describing the situation as frustrating.

Aero Contractors (N2), Air Peace (P4), Arik Air (W3), Azman Air, Dana Airlines (9J), Ibom Air (QI), MaxAir (VM), Overland Airways (OF), and United Nigeria Airlines are all members of AON.

This development comes as the market price of Jet A1 approaches N900 per litre, a 346 percent increase from the N200 per litre sold in February 2022.

According to a survey conducted by Aviation World, Jet A1 sells for N822 per litre in Lagos and N859 in Abuja.

Jet fuel costs N852 per litre in Port Harcourt, while it costs N890 and N892 in Yola and Maiduguri, respectively.

A breakdown of how the situation leads to flight delays and cancellations revealed that jet fuel accounts for approximately 40% of total operational expenses incurred by airline operators, and the closure of Murtala Mohammad Airport’s main domestic runway, MMA, automatically adds an additional 15% fuel costs per trip in and out of MMA.

However, in an interview with Aviation World, Dr Gabriel Olowo, President of the Aviation Safety Round Table Initiative, ASRTI, advised airlines to sell tickets at a rate commensurate with the amount they buy Jet A1, emphasizing that a price increase is preferable to negotiating safety by cutting corners.

“This is my advice to airlines; given these uncontrollable factors of production in the airline industry, demand will undoubtedly fall, but it is better to raise prices than cut corners and plan an accident,” he said.

“For example, if a trip fuel is 4000 litres for one hour on Jet (LOS-ABV) at N800 per litre, which is N3.2million, and a load factor of 100 passengers, fuel cost per passenger is N32.000, which is approximately 30% of the total cost.” This equates to a one-way fare of N107,000 in Nigeria.

“PHCN has implemented a premium power tariff, and those who can afford it have accepted it.” This is not the time for frivolous and reckless competition, nor is it the time for uneconomic patriotism. To minimize perishable seats and maximize load factor, operators should increase cooperation, collaboration, consolidation, and schedule pruning.

“The Spring Alliance spirit must be strengthened.”

The industry cannot afford to have an accident. The Nigerian Civil Aviation Authority, NCAA, is urged to be more vigilant in its monitoring of cost-cutting measures.”

Dana Air suspension, Aero
Following the sector challenges, Aero Contractor suspended its flight operations on Wednesday, while the NCAA suspended Dana Airline’s flight operations.

Speaking on the subject, Mr. Olumide Ohunayo, an aviation analyst, stated that it would have a negative impact on the industry while also increasing passenger traffic.

“It’s a trying time for the industry,” he said. Aero has ceased operations, and Dana Air has been grounded by NCAA due to financial constraints. Although the two situations are not identical, one was voluntary and the other was not.

“What they have in common is that they are both grounded at a time when airlines are battling for facilities, forex, and crippling fuel prices that have continued to rise uncontrollably.”

“As a result of this, we have a situation in which the government is unable to remit funds intended for foreign airlines, putting pressure on naira ticketing on international routes.”

“Domestic airlines, passengers, and the industry as a whole must address the forex crisis in order to restore investor confidence and attract new investors.” We also need to figure out how to keep the price of Jet A1 from rising further.”

The way forward
Ohunayo suggested that the government assist the sector in addressing the tax and charges associated with aviation fuel as a way forward in addressing the sector’s constraints. He stated that the government can reduce costs slightly but not significantly.

“It is not the time to start another investment,” he says, “but rather to look for a way to sustain the sector.” To assist airlines, we must reduce fuel prices while also increasing airport operating hours.

“I believe there will be that initial shock, a little withdrawal for the passenger, but with the insecurity on the roads, they will have no choice.” Fears will grow, and there will be more demand, because two airlines have already left the market, with no replacement.

“Perhaps when these airlines return, there will be more stabilization.” This development would help some airlines recoup their losses, as the industry is already losing a lot of money. There may be some profit on a weekly basis, but in financial books, companies look at the end of the year.”

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