Skyrocketing Aviation Fuel May Force Three Airlines To Close Shop, Onyema Warns

 

 

…Tasks FG   On Forex Scarcity

 …As Ground Handlers Express Worry Over Poor Infrastructure At Airports

The Chairman of Air Peace and the Vice Chairman of Airline Operators of Nigeria(AON), Mr. Allen Onyema, has warned that more domestic airlines in the country may be shut down operations if the current challenge of aviation fuel which is put at N714 per litre continues.

Onyema spoke  today at the maiden edition Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) with the theme, ‘Advancing the Frontiers of Possibilities for Safe, Secure and Profitable Air Transport’.

Though, he did not mention the names of the struggling  airlines, but there are indications that  the airlines are going through serious challenges in their operations occasioned by aviation fuel prices and other challenges.

The prices of aviation fuel, he said has risen to 714 per litre in some airports in the country and that the situation further compounded the problems bedeviling airline operators in the country.

This is just as other organisations  in the Nigerian aviation sector such as aviation fuel marketers, airline operators, ground handlers and catering services among others have expressed their concern over scarcity of Forex and the collapse of naira against major currencies.

The AON scribe pointed out that the issue of aviation fuel challenge was not limited to Nigeria, but opined that of Nigeria is worse because of the depreciation of  the naira against major  world currencies, especially the Dollars.

He contended that to address the challenge, the Federal Government had approved 10,000 metric tonnes of aviation fuel to the airlines, but that airlines have not been able to access it.

Onyema explained that the airlines hoped to start lifting the 10,000 metric tonnes of aviation fuel from tomorrow; Thursday.

Recall that about 16 months ago, the price of aviation fuel was about N200 per litre, but has risen to over N700 per litre today in the local market.

”That is why we ran to the government and the Federal Government has given us about 10,000 metric tonnes of fuel at the cost of N580 per litre in Lagos and about N607 per litre outside Lagos.

“This is not the only issue. Since the COVID-19 crisis, most airlines all over the world, including Nigeria have not recovered from COVID-19, except those whose countries have injected so much funds to assist them. This is nobody’s fault. It just happened. Government has tried it’s best by giving us this aviation fuel. This aviation fuel can take airlines out, not only in Nigeria but everywhere in the world.

“Some airlines outside Nigeria have closed down because of the effects of rising aviation fuel. If these things are not addressed in Nigeria, it can affect the bottom line of all airlines in Nigeria.

”We have come to realise that there is little or nothing the committee set up can do because this is as a result of foreign exchange and price of oil all over the world now. The fuel marketers will sell according to what they are paying. The cost of aviation fuel has increased, even in London and every other country. Our own is worse because of the increase in foreign exchange,” he said.

He said that aside airline operators, aviation fuel marketers, ground handling companies and catering services in their separate presentations, complained about the state of infrastructure at some of the airports, but that FAAN in the last three years had done a lot to improve the facilities at the aerodromes.

Also speaking, the Vice Chairman, Aviation Ground Handling Association of Nigeria (AGHAN), Mr. Bashir Ahmed, complained about the level decay of infrastructure at most of the airports and that saying that it limits  the turnaround time of operators at the apron.

Ahmed argued that the scarcity of Forex further reduces the operations and expansion of ground handling businesses in Nigeria.

He appealed to the Federal Government to take a critical look at the challenges in the industry and device a mean to addressing them.

Ahmed, however, commended FAAN for installing two explosive detective scanning machines each at the warehouses of the ground handling companies in Lagos.

This, he stated had gone a long way to enhance the performances of the handling companies in the industry.

“We still want to appeal to the Federal Government to grant waivers to handling companies on importation of ground handling equipment. Also, we need more scanning machines by FAAN to further improve our operations and create seamless services to our clients and the airlines.

“The Nigerian Civil Aviation Authority (NCAA) has also done well with its regulation of the industry. This shows that Nigerian aviation industry is changing,” he said.

On his part, a representative of aviation fuel marketers, Engr. John Abegunde, appealed to the Federal Government not to interfere in the commercial related issues in aviation fuel supply, as this may jeopardise safety in the system.

Abegunde explained that FAAN, NCAA and other government agencies should rather be more concern about the stringency of the aviation fueling requirement.

He contended that the fuel marketers subscribed to joint ownership of aviation companies, but kicked against the throughput arrangement, which according to him may work against the industry growth in the future.

According to him, “We should be wary of portfolio investors who come in when there are opportunities in the sub-sector, but moves out with their briefcases immediately there is a challenges.”

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