Local Airlines Lose N32bn to Paucity of Aviation Fuel

Chinedu Eze

Domestic carriers may have lost over N32billion in revenue and additional costs paid for Jet A1 as the price of the product continues to soar owing to its scarcity.

The airlines, including Air Peace, Medview, Dana, Aero and Arik Air said the scarcity came at a time passenger traffic had reduced by about 40 percent due to economic downturn.

THISDAY investigations revealed that as at March this year, the average price of Jet A1 was N96 per litre; by May/June it had risen to N140 per litre and by July it soared to over N200 per litre.

The airlines said the scarcity of the product has made them lose passenger loyalty besides huge revenue losses, as passengers could not book for flights due to the uncertainty and accompanying high fares, which became inevitable in order to defray the high cost of aviation fuel.

Head of flight operation at a major domestic carrier told THISDAY that while the airline’s flight operations were reduced by 40 percent, they paid their pilots who were not working; they paid their cabin crew; engineers and paid other charges, whereas they were not earning revenues, while the price of aviation fuel skyrocketed.

“You can say we saved money we would have used to buy fuel but other payments are constant. We have to pay our workers and because of the delays caused by aviation fuel scarcity our international flights did not take off as scheduled so we did not meet our landing slots so we have to pay extra charges in foreign currency.

“Meanwhile, the price of aviation fuel has increased by more than 150 percent. We cannot pass the increase fully to the passengers; otherwise the fares will be so high beyond the ability of many passengers to pay, so we are losing in all areas,” the pilot said.

Dana Air official had lamented that the uncertainty has hampered their operations, noting that all flight operations have been affected by delays and cancellation. As a result, he said the airline could not hold on any promise to its customers, while struggling to ensure that it takes their loyal passengers to their destinations, purchasing scarce aviation fuel at prices that continues to change in hours.

THISDAY also learnt that in the last two weeks when the scarcity was most severe, Arik Air operated 17 to 18 flights a day during the weekends out of its average of120 flights a day, but maintained about 40 to 50 of its capacity most of the period.