Airline Operators Raise Alarm As Aviation Fuel Rises To N780 Per Litre

The domestic airlines in Nigeria under the aegis of Airline Operators of Nigeria (AON) have called for the approval of fuel surcharge removal by the federal government to address the persistent high cost of aviation fuel.

This was just as the price of the commodity which was sold at N200 in February this year has today increased to N780.

AON said approval for fuel surcharge will help cushion the effect of the continuous increase in the exorbitant price of aviation fuel on the airlines’ productions.

According to a statement addressed to the Director-General of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu and sent to pressmen by its President, Alhaji Abdulmunaf Yunusa Sarina, the operators called for the removal of the five per cent fuel surcharge they have been paying to the NCAA.

However, the operators identified the increase in the price of aviation fuel and lack of access to forex and their subsequent impact on the cost of their operations to the latest action.

The statement reads, “the Airline Operators of Nigeria hereby wish to seek your kind approval of fuel surcharge as an ameliorative measure to cushion the effect of the continuous increase in the exorbitant price of Jet A1 on airline operations in the country.”

Alhaji Sarina, added that in addition to the crippling effect of intermittent shortages of Jet A-1, the price has risen from N200 per litre in February 2022 to over N780 today.

He noted that this has greatly increased the operational cost of airlines by well over 130%, yet airlines are unable to increase fares and as well suffer from the unavailability of foreign exchange to conduct their operations.

The statement, therefore, disclosed that “in order to forestall a backlash and total shutdown of the system, airlines are hoping to resort to an introduction of a fuel surcharge between 25% – 40% of NUC as a way of offsetting the additional burden brought about by increased fuel cost bearing in mind that jet fuel accounts for about 40% of total operational expenses.”

The body then solicited the understanding and support of the regulatory agency “by reconsidering and reviewing the decision that airlines are required to obtain approval for an initial three (3) months before implementation of a fuel surcharge, with a waiver of the demand that airlines pay an additional 5% on the fuel surcharge entirely separate from the 5% Ticket Sales Charge (TSC).

According to him, “unless this is done, it will mean in effect that whatever is collected by the airlines as fuel surcharge to cushion the effect of the high fuel price will be taken away once again by NCAA. This in effect will amount to double jeopardy as airlines will be unable to offset the additional cost which the fuel surcharge is meant to address in the first place.”

The operators, therefore, proposed that taxes should be based on the portion of the fare due to airlines less the fuel surcharge which is specifically for the purpose of cushioning the effect of rising fuel price and not on the total paid for the ticket inclusive of the fuel surcharge (i.e. Fuel Surcharge should be exempted from TSC).

Based on the pertinent and pressing nature of this issue, may we use this medium to kindly request an urgent meeting with airline CEOs to promptly address the matter? the operators requested.

His words “we, therefore, request that you would favourably consider and kindly affect our proposal to help alleviate the sufferings of airlines in the country given the current scarcity and the consistently rising cost of JetA1. This is standard practice all over the world; notably in Britain, America and Singapore among others.”