OKECHUKWU NNODIM, TUNDE AJAJA and GODFREY GEORGEpersistent rise in the cost of aviation fuel, known as jet A1, is beginning to cause apprehension in the minds of stakeholders in the industry as they express fears that the sector may collapse and there may be huge job losses if the rising cost is left unchecked.
He pointed out that many people were no longer travelling by air due to the hike in the price of tickets. This, he said, posed great danger to the survival of airlines and the aviation industry. Also, the Assistant General Secretary of the Aviation Round Table, Mr Olumide Ohunayo, noted that the sector had been severely hit by the fuel crisis due to its dependence on importation and the high foreign exchange rate.he added, “The Russia-Ukraine war has increased the average cost of fuel and all forms of gas productions, and this is exacerbated for Nigeria because of the weakening naira to the dollar. That has increased the pain on the airline and even the supplier.
Although the latest cost varied among various airlines, findings showed that the few surviving domestic carriers had raised the price of air tickets to match the rise in the cost of aviation fuel. Airline operators justified the jump in airfares, attributing it to the hike in aviation fuel, which accounted for about 60 per cent of the cost of operations of an aircraft.
He said, “It is possible for aviation fuel to cause a jump in the cost of air tickets and the reason is very simple. Fuel as a component of operation is about 40 to 60 per cent of the cost of operating an aircraft. So when you take a flight that will last an hour, for instance, a Boeing 737, the fuel it burns is about 2.5 tonnes an hour.
He added, “You need to also know that five per cent of whatever revenue they make goes to the NCAA. Essentially, we are saying that even before an airline starts operations, it is already struggling. Hence, airlines cannot continue to sustain losses for all the other agencies and service providers to thrive in the industry. This has been the situation in the last decades.
I think the industry can ride through this JetA1 crisis by embracing a marketing model based on the weight each passenger brings onboard an airliner. It's a low-cost model that leaves the basic airfare reasonably to attract more passengers to the airport away from other means.
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