AON Writes NCAA, Requests Removal Of 5% Fuel Surcharge
…Seeks Audience With Regulatory Body
The Airline Operators of Nigeria(AON) has written to the Nigeria Civil Aviation Authority(NCAA)to seek its kind approval of Fuel Surcharge as an ameliorative measure to cushion the effect of the continuous increase in the exorbitant price of Jet A1 on airline operations in the country.
AON’s letter is coming barely 24 hours after Aero Contractors, the oldest domestic airline in the country announced the indefinite suspension of its scheduled operations due the harsh economic environment which it operates.
The AON lamented that in addition to the crippling effect of intermittent shortages of Jet A-1, the price has risen from N200 per litre in February 2022 to over N780 today.
This, the AON said has greatly increased the operational cost of airlines by well over 130 per cent and that despite that airlines are unable to increase fares and as well suffer from unavailability of foreign exchange to conduct their operations.
The appeal is contained in a statement signed by its President, Alhaji Abdulmunaf Sarina and made available to journalists
AON contended that to forestall a backlash and total shutdown of the system, airlines are hoping to resort to an introduction of a Fuel Surcharge of between 25 per cent – 40 per cent of NUC as a way of offsetting the additional burden brought about by increased fuel cost bearing in mind that jet fuel accounts for about 40 per cent of total operational expenses.
“We therefore solicit your kind understanding and support by reconsidering and reviewing the following decisions taken by your organization in this regard:
* Immediate review of the decision that airlines are required to obtain approval for an initial three (3) months before implementation of a fuel surcharge.
* Waiver of the demand that airlines pay an additional 5 per cent on the Fuel Surcharge entirely separate from the 5 per cent Ticket Sales Charge (TSC).
“Unless this is done, it will mean in effect that whatever is collected by the airlines as Fuel Surcharge to cushion the effect of the high fuel price will be taken away once again by NCAA. This in effect will amount to double jeopardy as airlines will be unable to offset the additional cost which the Fuel Surcharge is meant to address in the first place.
“May we therefore propose that taxes should be based on the portion of the fare due to airlines less the Fuel Surcharge which is specifically for the purpose of cushioning the effect of rising fuel price and not on the total paid for the ticket inclusive of the Fuel Surcharge (i.e. Fuel Surcharge should be exempted from TSC).” AON said.
The umbrella body requested NCAA to favourably consider and kindly effect it proposal to help alleviate the sufferings of airlines in the country given the current scarcity and consistently rising cost of Jet A1.
This, AON said is the standard practice in countries such as Britain, America and Singapore among others.
It added that in view of the pertinent and pressing nature of this issue, it is using this medium to kindly request an urgent meeting with airline CEOs to promptly address the matter.