Low fares not sustainable amid mounting challenges-United Nigeria Airlines COO

  • Carried 800, 000 passengers in two years
  •  Seeks FG’s intervention in airlines 

 

 

The Chief Operating Officer (COO) Osita Okonkwo has expressed worries over the low cost of air tickets, stressing that there was no way airlines can be profitable by charging fees that can rarely make them survive in the face of excruciating access to Foreign Exchange, the skyrocketing price of jet fuel otherwise known as aviation fuel

Okonkwo, while speaking with Aviation Metric on Monday which coincided with the airline’s second anniversary in the aviation sector explained that lighter and smaller aircraft like the CRJ, Embraer and ATR would require 1, 300 litres of fuel for an hour flight while bigger aeroplanes like B737, Airbus aircraft or MD-83 would gulp over 3, 000 litre for the same one hour flight.

Aviation fuel is currently sold for between N790 and N800 per litre and for 1,300, airlines operating CRJ and Embraer spend between N970,000 and N1.04 million for one hour trip.

At N45,000 for each of the passengers for a 90-passenger aircraft, the airlines rake in N4.05 million and N3.14 million on a 70-seater aircraft. Most times the airlines carry less than that number on most of their flights which are normally one hour.

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Okonkwo

The airline chief noted that after deducting the cost of fuel, and charges to various aviation agencies like the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management (NAMA) and the Nigerian Civil Aviation Authority (NCAA), what remains are so small to sustain their operations.

He specifically listed Forex’s difficulty, and the high cost of aircraft maintenance as some of the issues the operators are facing, saying it would not be out of place if the government decides to intervene in the airlines through assistance to keep the carriers afloat.

“There is the need for government’s intervention in airlines in Nigeria. The United States and the United Kingdom have done that especially when there are big issues. That is not asking for too much. They have intervened in some companies and given forex to some companies; they should extend to the airlines”.

His words, “Every component of aircraft has diminishing value. When we started in 2021, fuel was N200. Suddenly it jumped to N300 per litre and it is now about N800 per litre. To get foreign exchange, you have to be in a queue. While you are in a queue, you have Aircraft On Ground (AOG) that are waiting to be ferried overseas for heavy maintenance”.

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He explained that the carriers were at a crossroads when jet fuel suddenly jumped to N800 per litre from N200 per litre forcing airlines to hike fares to between N70,000 and N90,000 for an hour flight.

The action elicited condemnation from stakeholders who concluded that the carriers were guilty of price fixing because the raise in fares happened at the same time.

Soon after, the carriers decided to lower fares as more airlines started operations and crashed fares with their fuel-efficient aircraft and breaking the monopoly of some airlines on some routes.

The use of CRJ by Ibom Air, ValueJets, Green Africa, Overland and a mix of aircraft in the fleet of Air Peace made air travel to be affordable for many who shunned air travel because of the high cost of air travel early last year.

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“We did not fix prices then. We did not collude to fix prices. People are underwriting costs. There is no way you can survive on N40,000 airfare,” Okonkwo added.

Recalling United Nigeria Airlines experience in the past two years when it started operations, precisely on February 12, 2021, Okonkwo said the carrier started in the thick of the COVID-19 pandemic and surmounted the challenges, describing the period as tough.

United NigeriaAirlines

“We started with six destinations, but now, we are going to many destinations. Lessons have been learned. The environment is uncertain in terms of forex, and jet fuel. When we came in, we met others who had been there and learn from the mistakes they made which has helped us. The Ministry of Aviation, FAAN, NCAA and NAMA have been very supportive. We have airlifted 800, 000 passengers since we started operations. We hope to celebrate when the number hits 1 million”.

Wole Shadare