Worsening crisis: Nigeria’s airlines fume over fuel, forex and runway closure
The Airline Operators of Nigeria (AON) has issued a further warning over rising fuel prices and supplies for the country’s airlines, saying it is threatening their ability to continue operations.
“The Airline Operators of Nigeria (AON) would like to notify the general public that the JetA1 crisis which began in late February and deteriorated further through the months of March to May, has further worsened and [is] currently threatening the ability of airlines to continue operations,” said the AON in the statement, which was published by News Express.
Member airlines of the AON consists of Max Air, Ibom Air, Aero Contractors, Overland Airways, Air Peace, United Nigeria Airlines, Arik Air, Azman Air and Dana Air, which has just been grounded due to financial difficulties.
The AON said fuel prices have risen by about 400% since December 2021 and also highlighted erratic fuel supplies as a concern.
“On top of the continuous rise in the price of Aviation fuel, supply is at best epileptic and unpredictable at several airports across the country thereby causing flight delays, and even cancellations, as airlines queue for fuel at airports across the country.”
In addition, a shortage of foreign currency is hampering airlines’ ability to maintain regular operations said the AON in the statement, explaining that airlines carry out many activities in US dollars.
“To say the least, airlines are in a ‘life and death’ struggle to secure the foreign exchange that they urgently need to acquire spare parts to ensure the regular routine and scheduled maintenance of aircraft. This is a major influence on how quickly a grounded aircraft can be fixed and restored for flight operations, which impacts greatly on the reliability of schedules, growth of the industry and economic growth and sustainability,” commented the AON.
On July 21, 2022, the Nigerian Civil Aviation Authority (NCAA) announced its decision to suspend Dana Airline’s Air Transport License (ATL) and Air Operator Certificate (AOC) indefinitely, as a result of a financial audit carried out on the airline by the authority. The NCAA said the audit “revealed Dana Airlines is no longer in a position to meet its financial obligations and to conduct safe flight operations.”
The closure of runway (18L) of Murtala Muhammed Airport (MMA)
Adding to woes for the country’s carriers is the closure of runway (18L) of Murtala Muhammed Airport (MMA), in Ikeja, Nigeria for 90 days, starting from July 8, 2022. Ibom Air, a Nigerian airline owned by the Akwa Ibom State Government, put out a public notice on twitter on July 15, 2022, warning its customers of future flight delays due to two critical factors hampering the airlines’ operations, namely the runway closure and the scarcity of aviation fuel.
The AON said the timing of the closure has exacerbated the sector’s problems.
“In the face of the heavy burden already inflicted on airlines by the worsening Jet A1 crisis, it is most unfortunate that the Federal Airports Authority of Nigeria (FAAN) chose this period to close the runway. The ill-timed and unfortunate decision taken at very short notice to airlines has further crippled air transport operations by causing unsustainable additional operating costs and severely inconveniencing the airlines and passengers,” said the AON.
The AON said the closure increases fuel costs by 10-15% per sector due to additional flight and taxi time. “The airlines have already felt these additional costs within the first week of the closure of the runway. This unnecessary burden is unsustainable for a 3-month period on the airlines; especially for the fact that the JetA1 crisis has worsened significantly, and the situation remains unpredictable.”
Call for further government subsidies
In the statement reported by News Express, the AON commended the efforts and intervention of government authorities in May 2022 for a support package to ease the burden on airlines, which resulted in “a mutually beneficial and cost-effective three-month aviation fuel supply window.”
However, the AON points out that the government support is yet to be “fully and generously resolved.”
“We, therefore, call on the Federal Government to, once again, look critically at the issues raised in the statement as they affect scarcity and cost of aviation fuel and foreign exchange so as to find ways of ameliorating the problems that are likely to cause a shutdown of this very nationally essential service sector, which had contributed, and continues to contribute, to national economic development through jobs creation, taxes and increased commercial activities,” the AON stated.
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