FG Moves to Avert Shutdown of Operations by Airlines

*Engages stakeholders to address aviation fuel scarcity

 *House urges airlines not to suspend operations 

*Ibom Air opts out of plan to stop operations

Chinedu Eze in Lagos and Kasim Sumaina in Abuja

Following a threat by airline operators to shut down their operations tomorrow over the scarcity of aviation fuel, the federal government has appealed to operators to reconsider their decision, stressing that it had engaged the relevant stakeholders to address the issue of scarcity of aviation fuel.

Also, the House of Representatives through its Committee on Aviation has appealed to the airlines to suspend the plan to ground their operations.

In a letter addressed to the Minister of Aviation, Senator Hadi Sirika, and the Nigerian Civil Aviation Authority (NCAA), which was signed by the President of Airline Operators Nigeria (AON), Mr Serina Abdulmunaf, the operators had threatened to shut down operations by Monday, May 9, due to high cost of aviation fuel and other operational costs.

The operators had noted in the letter that aviation fuel price (JetA1) had risen from N190 per litre to N700, and described the rise as “astronomical”
“While aviation fuel worldwide is said to constitute about 40 per cent of an airline’s operating cost globally, the present hike has shot up Nigeria’s operating cost to about 95 per cent.

“In the face of this, airlines have engaged the Federal Government, the National Assembly, NNPC and Oil Marketers with the view to bringing the cost of JetA1 down, to no success,” he said.
The airlines said that the situation had made the unit cost per seat for a one hour flight in Nigeria an average of N120,000.

But in a swift response, Sirika yesterday appealed to airline operators to consider the multiplier effect of shutting down operations on Nigerians and global travellers, in taking their business-informed decisions and actions.
Sirika, in a statement issued in Abuja by his Special Assistant on Public Affairs, Mr James Odaudu, noted the “reports that the nation’s air transportation system will be disrupted as from Monday, May 9, 2922, following threats by airline operators to shut down operations as a result of the rising cost of Jet A1, otherwise known as aviation fuel.

“As them charged with the management of the industry, we are greatly concerned about the difficulties being faced by the airline operators in the country in procuring aviation fuel which has resulted in spiralling costs in Air transportation in the immediate past,” the statement said.

The statement further said: “We also acknowledge that the airline operators are in the business to make profits while servicing the very critical sector that is not only the preferred mode of transport for most Nigerians but also the main international gateway to the nation.

“Unfortunately, the issue of fuel supply is not within the purview of the ministry and so the much it can do in the present situation is to engage with agencies, institutions and individuals in positions to provide succour to the airlines. This is already being done by the relevant team led by the Honourable Minister,” the statement explained.

The statement noted that while the efforts to assuage the situation are on, “we wish to appeal to the airline operators, even in the difficult situation, to consider the multiplier effect of shutting down operations, on Nigerians and global travellers, in taking their business-informed decisions and actions.

“We also assure Nigerians, especially stakeholders in the sector, that the Buhari administration remains stoic in its commitment to the creation and sustenance of an environment that promotes the growth of the aviation industry where major players like the airlines can operate in a profitable and competitive market,” the statement added.

In the letter to Sirika by the operators, Abdulmunaf had stated that the airlines appreciate the efforts of the current government to boost the growth of air transport in the country, and regretted the inconveniences the “very difficult decision may cause our customers”.

Abdulmunaf also lamented that the cost of aviation fuel had continued to rise unabated thereby creating huge pressure on the sustainability of operations and financial viability of the airlines.

“This situation is unsustainable and the airlines can no longer absorb the pressure.”
He, however, appealed to travellers to kindly reconsider their travel itinerary and make alternative arrangements.
Meanwhile,  the House of Representatives through its House Committee on Aviation has appealed to the airlines to suspend the plan to ground their operations.

The Chairman of the House of Representatives Committee on Aviation, Hon. Nnolim Nnaji disclosed yesterday that the Speaker of the House of Representatives, Hon. Femi Gbajabiamila was greatly disturbed by the reoccurring aviation fuel crisis in the country.

“The House of Representatives consequently plans to take far-reaching decisions on the matter as soon as possible to ensure that the problem is permanently rested,” he said.

He appealed to the Airline Operators of Nigeria to rescind action on its planned shutdown of operations due to the escalating cost of aviation fuel, Jet-A1
Nnaji who regretted that despite the last intervention of the leadership of the House of Representatives, the problem remained unabated, assured the airlines that his committee and indeed the House leadership were not sleeping over their plight.

Nnaji who commended the operators for their patriotism further urged them not to ground their operations stressing that “such will inflict more pains on our already distressed economy”.

 He also pledged that “the National Assembly is determined to ensure that the aviation fuel crisis is urgently resolved because air transportation has become the safest mode of travel.”

Ibom Air Opts Out of Plan to Stop Operations

In a related development, the Akwa Ibom State-owned airline, Ibom Air has indicated that it would opt out of the plan to suspend flights on May 9, 2022.

In a statement signed by management, the airline said, “Ibom Airlines Limited (Ibom Air) has been inundated with inquiries about what will happen on Monday 09 May 2022, following the public statement issued by the Airline Operators of Nigeria (AON) executive, on Friday, May 6, 2022, and it has become necessary for us to make the following clarifications: Ibom Air acknowledges the existential threat that these runaway fuel price increases pose for the air transport industry in Nigeria. We agree that this out-of-control situation is simply unsustainable.

However, every airline has its unique business model and pressures. We believe that despite the escalating fuel prices, airlines volunteering to stop operations would rather exacerbate an already bad situation.

“Ibom Air has financial obligations to suppliers, financiers and staff, which depend on an uninterrupted flow of revenue to service. More importantly is the fact that having been paid by customers in advance for flight bookings, we are bound by contract to deliver the services already paid for, to avoid exposing the airline to the risk of avoidable litigation. Apart from the above factors, Ibom Air is currently the only airline serving Akwa Ibom State directly and as such, any voluntary stoppage of operations would completely cut off access by air into and out of the State. Such action would be directly in conflict with and detrimental to the interest of our shareholder.”

The airline stated that given the foregoing facts, it has respectfully disagreed with the decision of AON to suspend flight operations, adding that it cannot in the circumstance volunteer to stop operating and would continue normal operations on Monday and beyond.

Ibom Air, however, said it identified with AON and would participate in every effort to resolve this frightening situation as soon as possible in the interest of the airline business, customers, stakeholders and the country.