Extinction fear grips airlines, operate below unit cost

  • …Operators in limbo as JET A1 skyrockets to N400 per litre
  • How sunset operation at 18 airports hampers operations
  • United Nigeria Airline mull interline

Nigerian airlines are in a dire strait. They risk extinction unless the government comes to their rescue and urgently save the situation.

The twin effects of the astronomical rise in the price of JET A1, otherwise known as aviation fuel and lack of support from the Federal Government including fluctuation in the exchange rate are factors that could render aviation which he described as contributing four percent to Nigeria’s Gross Domestic (GDP).

Many of the airlines are worried that the commodity which costs between N180 and N190 per litre February last year has jumped to N400 per litre as of yesterday according to the Chairman of United Nigeria Airline, Dr. Obiora Okonkwo.

Okonkwo who spoke to the media at the Murtala Muhammed Airport, Lagos said the current base fare charged by many of the airlines was no longer sustainable; an indication that airfare may rise on domestic routes to cushion the effects of the cost of aviation fuel on the operators.

However, stakeholders have expressed concern over the decision to hike fares on many of the underserved domestic routes that can hardly sustain Nigerian airlines’ bottom-line.

Dr. Obiora Okonkwo

Some of the stakeholders who lamented the hike cost of Jet A1 which takes over 40 percent of the carriers’ revenue said the decision would send many prospective air travelers to the motor part as the economic situation can hardly sustain many people take to air travel.

According to Okonkwo, “For every ticket, you sell, you have five percent in Tickets Sales Charge (TSC) directly to the Nigerian Civil Aviation Authority (NCAA). From the ticket, you pay the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA). What remains?, he asked.

To save the carriers from their precarious situation, Obiorah said there is a need for special funding for the sector and needs to be given the attention it requires.

 “From the ticket, salaries paid to staff have increased, costs have increased but tickets have not increased that much compared to the cost of operations. Operators are looking for solutions to many of these things. We can’t talk about safety without looking at rising costs”.

He warned that Jet A1 cost might even rise to N500 per litre before March 2022. There will definitely be adjustments in the ticket price to bridge the cost, stressing that if not, “The aviation industry will collapse”.

“Airline business is the livewire of the entire aviation value chain. If airlines don’t fly or the airlines are in comatose, NAMA, NCAA and FAAN will not get the required revenue to run their operations”.

The United Nigeria Airline boss while seeking government’s intervention in the provision of facilities at the airports to allow for longer operation of their equipment bemoaned a situation that many of the aerodromes only do sunset operations, meaning that they can only operate into and out of the aerodrome at 6 pm.

Industry stakeholders have excoriated the federal government for failing to install critical airport infrastructure to ease the pains of air travel in Nigeria.

The stakeholders noted that for several years majority of the airports in the country cannot allow flights to land at night because they lack airfield lighting and instrument landing system.

  For example, out of 22 airports under the management of FAAN, 18 do not have airfield lighting so flights cannot land thereafter 6:30 pm.

Airlines and passengers have complained bitterly about the inability of aircraft to land at the second runway of the Murtala Muhammed International Airport (MMIA), known as the domestic runway after 6:30 pm.

Being the busiest airport in Nigeria, domestic airlines have complained about the congestion on the first runway of the airport, known as the international runway due to traffic from foreign airlines from 6:30 pm which causes a lot of delays both for arriving flights and flights primed to take off.

Lack of airfield facilities at many of the aerodromes, airlines said had contributed immensely to flight delay and cancellations which in many cases has become a big burden to passengers and the aviation regulatory body, the NCAA.

“There is no support given by the government to airlines that is too big. This is a huge revenue source for the government. Lack of good facilities is making flight delays and cancellations inevitable because many of the facilities have collapsed. Most of the airports only operate in the daytime, thereby putting airlines under tremendous pressure. Sunset airports are killing the industry”.

He disclosed that his airline is in talk with other domestic carriers on how to promote local interline that would cushion the effects of delay and cancellation to guarantee on-time departure, hinting that despite the competition that exists between airlines, he called for healthy collaboration amongst the operators.

 

United-Nigeria-Airlines

“United Nigeria Airline is in discussion with many other local airlines. I read that passenger traffic for last year is about 9 million. This is too small for a country of about 200 million people. We don’t have enough aircraft. We need more than 100 additional aircraft and we should be talking of million traffic; only then can we be talking about prosperity in the aviation industry. The industry is large. There are many routes to connect”.

The first interline/codeshare deal between Dana and Ibom Air started late last year. The idea for domestic airline interline had been on the table for close to 20 years without any appreciable progress.

An interline flight is an agreement between airlines to coordinate passengers with an itinerary that uses multiple airlines, without having to check in again or deal with their baggage at the stopover while a codeshare agreement is where airlines operate flights on behalf of another airline, using their flight code.

 

Wole Shadare

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