Domestic Airlines Lose N32billion to Aviation Fuel Scarcity

Indications have emerged that local carriers may have lost over N32billion in revenue and additional costs paid for  aviation fuel also known as Jet A1,  as the price of the commodity continues to surge as a result of its scarcity.

Some of the domestic carriers including Air Peace, Medview, Dana, Aero and Arik Air said the scarcity came at a time passenger traffic had reduced by about 40 percent due to economic downturn, Thisday reports.

The airlines said the scarcity of the product has led to loss of passenger loyalty besides huge revenue losses, as passengers could not book for flights due to the uncertainty and accompanying high fares, which became inevitable in order to defray the high cost of aviation fuel.

Head of flight operation at a major domestic carrier said that while the airline’s flight operations were reduced by 40 percent, they paid their pilots who were not working; they paid their cabin crew; engineers and paid other charges, whereas they were not earning revenues, while the price of aviation fuel skyrocketed.

“You can say we saved money we would have used to buy fuel but other payments are constant. We have to pay our workers and because of the delays caused by aviation fuel scarcity our international flights did not take off as scheduled so we did not meet our landing slots so we have to pay extra charges in foreign currency.

“Meanwhile, the price of aviation fuel has increased by more than 150 percent. We cannot pass the increase fully to the passengers; otherwise the fares will be so high beyond the ability of many passengers to pay, so we are losing in all areas,” the pilot said.

As at March this year, the average price of Jet A1 was N96 per litre; by May/June it had risen to N140 per litre and by July it soared to over N200 per litre, Thisday findings revealed.