“How Airlines’ Collapse Threatens Nigeria’s Wider Economy”

President of the Aircraft Owners and Pilots Association, Alex Nwuba, has highlighted the profound multiplier effect that aviation has on a nation’s economy, particularly in a country like Nigeria.

He warned that when an airline collapses, the impact is rarely confined to the company itself; it ripples through several critical sectors.

Speaking against the backdrop of the volatility in jet fuel and its implications on the fragile state of Nigerian carriers, the speaker said airline collapse leads to direct job losses, which include pilots, cabin crew, engineers, ground handlers, and administrative staff, adding that in aviation, these are often highly specialised roles that are difficult to replace quickly within the same market.

He noted that the volatility of aviation fuel, primarily Jet A-1, is a critical factor that influences everything from flight safety and engine performance to the complex economic landscape of global air transport.

To understand the pain airlines are expressing, Nwuba compared global refinery‑gate prices with actual Nigerian depot prices, explaining that in February, Platts regional FOB benchmarks were around $0.62–$0.68 per litre, stressing that at the February exchange rate of roughly ₦1,357.8 to the dollar, this translates to about ₦860–₦940 per litre.

He went further to say that by mid‑April, the Platts/IATA global average had risen to $184.63 per barrel, which converts to $1.161 per litre. Using the April exchange rate of about ₦1,342.3, this equals roughly ₦1,559 per litre.

His words, “Now compare this with what Nigerian airlines actually paid. In February, depot prices were around ₦900 per litre. By March, they had jumped to ₦2,000. By mid‑April, they had surged to ₦3,000–₦3,300. While global parity moved from ₦860 to ₦1,559 — an increase of about 81 per cent — Nigeria moved from ₦900 to ₦3,300, an increase of roughly 267 per cent.”

He noted that, in the heart of the crisis, Nigerian airlines faced a fuel cost increase exceeding three times the global benchmark, saying no business can absorb that without breaking.

He lamented that despite this, fares have remained remarkably steady as competition has forced airlines to keep prices low even as their costs have exploded.

“The Nigerian traveller is extremely price‑sensitive. Demand collapses instantly when fares rise. Airlines know this, so they absorb losses to avoid losing market share. While Jet A1 rose from ₦900 to ₦3,300, fares on many routes moved only 5–12 per cent. This is not sustainable. It is a slow bleed.”

“This is why airlines are crying out. This is why emotions are raw. This is why the industry is on its knees. And this is why I now see the sector not just through technical eyes, but through human ones. I see the fear, the sacrifice, the patriotism, the exhaustion. And I see the need for unity.”

Nwuba who is also the second Vice-President of Aviation Safety Round Table (ASRT) stated that aviation cannot survive on short‑term, high‑cost borrowing, stressing that a dedicated liquidity window — single‑digit interest, long tenor, and a grace period — is essential to keep airlines alive long enough to recover.

“We must also bridge the price‑gouging gap in Jet A1. The misalignment between global parity and local depot prices must be corrected, not through subsidies, but through temporary corrective mechanisms that restore fairness. Beyond that, we must build sustainable vehicles: transparent pricing frameworks, volatility‑protection mechanisms, rationalised taxes and charges, and a predictable operating environment.”

“These are not luxuries. They are survival tools. Without them, the industry will continue to lurch from crisis to crisis, and the human cost will continue to mount. This is my reconciliation. I now see the industry not just as a system to be fixed, but as a community to be protected”, he added.

Wole Shadare