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President,  Aviation Safety Round Table Initiative ( ASRTI) Dr Gabriel Olowo has backed airlines to charge fares that are commensurate with their cost of operations, adding that the astronomical prices of Jet A1 also known as aviation fuel, it has affected airline operations and finances.

This is just as he has called for increased vigilance of the Nigerian Civil Aviation Authority (NCAA),  stressing that a price increase is better than negotiating safety by cutting corners.

 With this position of Olowo, it is expected that ticket rates will continue to rise as the carriers would have to recover the cost through tickets, cargo or couriers.

President, ART, Dr. Gbenga Gabriel Olowo

Since January 2022, the price of Jet A1 has been skyrocketing to the chagrin of airline operators. A litre of aviation fuel in the domestic scene goes as high as N650 and N700 per litre, depending on the airport an airline is buying from.

The inability of local refineries to refine the product locally, high investment in logistics and the high cost of aviation fuel handling equipment like refuellers, hydrant dispenser/servicers and filtration systems are also contributing to the sordid situation in the local market.

Nigeria still suffers from fuel scarcities. Reasons for the short supply of refined petroleum products (particularly gasoline, diesel and aviation fuel) in Nigeria include poor capacity utilisation of the nation’s refineries and disruption of crude oil supply to the refineries.

The country now relies heavily on foreign nations for the supply of these fuels. The country spends a substantial part of its foreign exchange on fuel importation. The Federal Government now wishes to reverse this trend by initiating the automotive biofuel programme.

Olowo noted that jet fuel has continued to rise to a new price regime for Jet A1 stressing that in different states of the federation a litre of the product has shot over 800/litre.

“Our portal reported that Jet A1 in Lagos sells for N822 per litre while in Abuja the product sells for N859.

In Port Harcourt, Jet fuel sells for N852 per litre while it sells for N890 and N892 in Yola and Maiduguri respectively.

Olowo in his communication titled: Sell what you buy advised that given all the uncontrollable circumstances within the aviation set up airlines should factor in their extra costs but stressed that prices will increase but it beats the alternative of cutting corners.

He said, “This is my candid opinion to airlines, given these uncontrollable factors of production in the Airline Industry sector. Demand will definitely drop but much better than cutting corners and planning an accident.

 “If a trip fuel is 4000litres for a one hour on jet (LOS-ABV) for example at N800 per It which gives N3,200,000 and a load factor of 100 passengers, This means fuel cost per passenger is N32.000 and this is approximately 30% of the total cost. This will translate to N107.000 tariff for one way journey”.

“PHCN has introduced Premium Tariff on power and those who can afford it are settling for it. This is not the time for frivolous and reckless competition or uneconomic patriotism. Operators should intensify cooperation, collaboration, consolidation, and prune schedules to minimize perishable seats and maximize load factor. “The spirit of Spring Alliance must be strengthened.

“The sector must not negotiate an accident. NCAA is encouraged to be more vigilant to watch cutting corners.

Some Nigerian airlines

Chairman and CEO of United Nigeria Airlines, Obiora Okonkwo, recently lamented the astronomical increase in the price of aviation fuel, noting that “fuel price is of great concern to airline operators.

“When we started operations, it was N160 per litre, but now, it is over N650 per litre. The product constitutes 30 to 40 per cent of the cost of operation. With this increase, it is expected that the ticket rates will also increase by 50 per cent. Airlines must have to recover the cost through tickets, cargo or couriers.

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