Aviation Crisis: Nigerian Airlines at Risk of Shutdown Due to Soaring Jet Fuel Prices

Concerns are mounting over the fate of domestic airlines in Nigeria as the price of aviation fuel, Jet A1, continues to skyrocket, potentially leading to the suspension of operations by some carriers.

The past two years have witnessed a relentless surge in the cost of aviation fuel, prompting airlines to adjust their operations by hiking ticket prices. Between July 2023 and February 2024 alone, local carriers grappled with a staggering 109% increase in fuel prices.

The twelve scheduled airlines operating in the country, including major players like Air Peace, Aero Contractors, and Arik Air, have been struggling to stay afloat amidst the price surge. During this period, the price of jet fuel surged from N629 to N1,316, pushing some airlines to the brink of viability.

As the situation becomes increasingly untenable, reports suggest that certain airlines are contemplating ceasing operations. Despite efforts to mitigate the impact, including fare adjustments, the sharp escalation in fuel costs has rendered the situation unsustainable for many carriers.

According to Mr. George Uriesi, the Chief Operating Officer of Ibom Air, the price of jet fuel currently fluctuates between N1,300 and N1,500, posing a significant challenge to airline operations. He highlighted the immense strain caused by the unprecedented increase, stressing that airlines cannot absorb such exorbitant cost escalations indefinitely.

Captain Ado Sanusi, the Managing Director of Aero Contractors, warned of further deterioration unless Nigeria invests in refining Jet A1 domestically. He emphasized that the reliance on imports, coupled with currency fluctuations, exacerbates the cost burden on airlines.

Sanusi called on the Federal Government to enhance transparency in jet fuel importation processes, urging the Department of Petroleum Resources (DPR) to publish fuel prices to prevent cartel manipulation. He emphasized the urgent need for refineries like those owned by Dangote and located in Port Harcourt to contribute to Jet A1 production, albeit acknowledging the time required for such initiatives to impact the market.