The Airline Operators of Nigeria (AON) have raised alarms over the surging operational costs driven by the unprecedented rise in aviation fuel prices, now exceeding N1,300 per litre. The statement, issued on Friday by AON spokesperson Obiora Okonkwo, underscored the urgent need for government intervention to avert the potential collapse of several airlines within the country.
Highlighting the challenges, Okonkwo pointed out that the drastic increase in fuel prices from N700 to N1,300 per litre, coupled with the fluctuating forex rates now hitting N1,400/$1, have plunged airlines into significant financial distress. This situation has led to considerable losses, as airlines are forced to honor previously sold tickets at current higher operational costs.
The aviation sector’s woes are compounded by the increased charges from handling companies, airports, and service providers, with the financial burden ultimately falling on passengers. Okonkwo, who also leads United Nigeria Airlines, lamented the cascading effect of these increases on the airlines’ revenue and operational stability.
Furthermore, Okonkwo highlighted a noticeable decline in passenger traffic, attributing it to the economic downturn affecting potential travelers’ willingness to spend on air travel for social engagements. This reduction in passenger volume threatens the airlines’ ability to maintain sustainable load factors, especially during the current low season.
The AON spokesman also criticized the lack of a specialized forex allocation for airlines, which forces them to compete in the open market with other sectors for foreign currency. This challenge, according to Okonkwo, has eroded the airlines’ passion for the business, pushing some to the brink of shutdown and hindering the addition of new aircraft due to increased country risk perceived by aircraft lessors.