The operating costs of domestic airlines have climbed by 30% over the past two years, according to Mr. Osita Okonkwo, Chief Operating Officer of United Nigeria Airlines.
Speaking with a few select media in Lagos, Osita noted that a litre of Jet A1 (aviation fuel) was sold for N200 when the airline started operating in 2021, but regretted that the price had increased to N800 per litre in the local market.
More information about the difficulties: According to Okonkwo, a small-body aircraft such as an Embraer, CRJ, ATR, or Dash-8 needs roughly 1,300 liters of aviation fuel to fly for an hour, whereas a middle-body aircraft such as an Airbus 319, 320, MD 83, or Boeing 737 needs at least 3,000 liters.
If fuel costs N800 per liter, a small body aircraft would cost N1,040,000 to fly for an hour, whereas a middle body aircraft would cost N3,900,000.
He stressed that these fees further increased operating costs as he went on to explain that operators also pay various fees and levies to government organizations like the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency, and the Nigerian Civil Aviation Authority. “A litre of fuel was selling for roughly N200 when we started operations in 2021, but it suddenly increased to N500 per litre in February 2022,” he claimed. Currently, a litre of fuel costs either N800 or N790, depending on where you buy it.
• “We don’t have access to foreign currency, either. There is no access to forex. Only roughly 20 to 30 percent of your needs are met by the Central Bank of Nigeria (CBN). You must queue, but it is in motion. Operating expenses are increasing at an extremely rapid rate.
Government intervention funding for operators are required. That is being done by governments all across the world. There is a need for government intervention in Nigerian airlines, but this is not too much for the nation to do for its own operators. When there are significant concerns, the United States and the United Kingdom have done this particularly. That is not an excessive amount to ask. They have given currencies and intervened in some enterprises.
companies, they ought to do the same for Nigerian airlines.
Action required: Okonkwo warned that the sub-sector may collapse in the upcoming months and urged the Federal Government to assist the operators to prevent them from failing.
Okonkwo stressed that the majority of airline operators are underwriting the airfares from other sources as operating costs for the carriers have risen over the past year.
Additionally, he stated that given the current circumstances of soaring fuel prices and a lack of foreign currency, the low pricing being offered by airlines are not sustainable.
What you should know: He denied the assertion made by some that airlines set fares, arguing that the industry is competitive and will stay that way.
• In 2021, six domestic airlines created the Spring Alliance. According to Okonkwo, the alliance has helped carriers save money by sharing the cost of airlifting passengers in the event of operational difficulties.
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Additionally, he added that United Nigeria Airlines still maintained its fleet of four CRJ planes and that over 800,000 passengers had been airlifted over the course of the last two years of operations.
However, he revealed that there were plans to increase the airline’s fleet, assuring the flying public that the airline would continue to provide top-notch services.
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