Operators: We ‘ve few days to sustain air travel despite FG’s intervention

• We are pouring water into basket-Uriesi
• Nwuba-Price increase’ll plummet passenger traffic

The Nigerian aviation sector is currently facing a severe liquidity crisis, with no respite in sight for airlines despite the Federal Government’s decision to cut airlines’ debts by 30 per cent.

The carriers said they cannot take any more hits from an astronomical 300 per cent rise in jet fuel prices.

They said operational costs have reached a breaking point, with current revenues no longer sufficient to cover fuel expenses alone.

As a result, they hinted that they have only a few days left to continue what they term “subsidising air travel” amid existential challenges.

While the Minister of Aviation and Aerospace Development, Festus Keyamo, has held emergency meetings with oil marketers and regulators, recent sessions have reportedly ended in a deadlock.

Marketers cite their own supply chain costs, while airlines insist they cannot pay a premium that far exceeds global trends.

For the airlines, the choice is now between a controlled shutdown and a total financial collapse. As they put it, they can no longer “subsidise” the cost of flying out of patriotism alone.

As a result, two airlines that preferred anonymity said they have just a matter of days left to continue operations.

The Chief Operating Officer of Ibom Air, Mr George Uriesi, disclosed that the situation makes it impossible to continue operations, likening it to pouring water into a basket.

He said, “The situation is not really appreciated. We have just a matter of days to continue. It is an impossible situation. We are pouring water into a basket”.

He used the metaphor of “pouring water into a basket” because, no matter how much revenue they generate, it is immediately swallowed by overheads that are rising faster than they can adjust ticket prices.

Despite ongoing discussions with the Federal Government, the combination of a 300% surge in jet fuel (Jet A1) prices and a volatile foreign exchange market has made continued operations nearly impossible for many.

The primary driver of this existential threat is the astronomical rise in fuel costs, which now account for roughly 45% to 60% of total airline operating expenses.

To actually break even at current fuel prices, a one-way domestic ticket would need to cost between ₦200,000 and ₦250,000. At these prices, passenger volume would plummet, leaving planes half-empty.

To understand the pain airlines are expressing, Aviation expert, Alex Nwuba, said, “We must compare global refinery‑gate prices with actual Nigerian depot prices. In February, Platts regional FOB benchmarks were around $0.62–$0.68 per litre. At the February exchange rate of roughly ₦1,357.8 to the dollar, this translates to about ₦860–₦940 per litre.”

Nwuba

“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. 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 disclosed that Nigerian airlines faced a fuel cost increase exceeding three times the global benchmark, lamenting that no business can absorb such a hike without breaking.

“And yet, despite this, fares have remained remarkably steady. 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.”

He warned that aviation cannot survive on short‑term, high‑cost borrowing, explaining that a dedicated liquidity window — single‑digit interest, long tenor, and a grace period is essential to keep airlines alive long enough to recover.

He called for the bridging of the price‑gouging gap in Jet A1, adding that the misalignment between global parity and local depot prices must be corrected, not through subsidies, but through temporary corrective mechanisms that restore fairness.

In a related development, the Airlines Association of Southern Africa (AASA) has noted with grave concern the lack of clarity around the availability of jet fuel across the Southern Africa Development Community (SADC) region, beyond next month.

Chief Executive Officer of AASA, Aaron Munetsi, in a statement, said, “AASA pleads with the region’s fuel suppliers, depots (including airports) and all the SADC member governments to urgently share their contingency fuel allocation and distribution plans with the aviation industry.”

Uriesi

According to him, the increases have exacerbated the situation for African airlines, which, even before the current crisis, were paying some of the highest jet fuel prices in the world. In fact, jet fuel accounted for up to 40% of some carriers’ costs in our region.

Wole Shadare