Passengers will have to adapt to constant increase and fluntuations in air fares as the aviation sector battles with the high cost of aviation fuel, which is the oxygen of the industry.
Aviation fuel, also called Jet A-1, has lately sold for between N215 at airports in the South and N300/per litre in low traffic aerodromes in the Northern region of the country. The price had risen in April 2021 to between N250 and N275 per litre, which was about a 200 per cent increase from 2016, when it was sold at N110. It rose to N200 in 2018, hovering around N160 and N170 in 2019.
An average 50 per cent surge in fuel cost, a critical component of airlines’ operation, has also forced airlines to increase airfares with an average Economy Class ticket on less than an hour flight selling for over N65,000.
Aviation fuel takes between 30 to 40 per cent of airlines’ costs. Earlier in the year, it sold for N160 per litre before leaping to N270 – N300. Aviation fuel below N300 according to experts may have been contaminated.
The situation is not unconnected with the naira-to-dollar exchange rate, logistics hiccups of importing the product through chaotic Apapa ports, monopoly of the commodity in airports across the country and its shipment, and tax burden on it.
Since Nigeria has to import fuel, the landing cost has become a major issue due to the free fall of the Naira at $1 to N500 and the increase in crude oil price in the international market at $73.5 per barrel.©Standard Gazette, 2021. Unauthorized use and/or duplication of this material without express and written permission from this site’s publisher is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Standard Gazette with appropriate and specific direction to the original content.