Airlines on the verge of winding up operations due to high fuel cost – Onyema

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*Onyema

The chairman of Air Peace and vice chairman of Airline Operators of Nigeria, Mr. Allen has sounded the alarm that many domestic carriers are at the point of closing shop due to the exorbitant cost of aviation fuel.

Onyema stated this Wednesday at the maiden edition of Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) holding in Abuja under the theme ‘Advancing the frontiers of possibilities for safe, secure and profitable air transport.’

Recall that aviation fuel which hitherto sold for N200 per litre has risen to N700 and above per litre at some airports in Nigeria.

Specifically, Onyema said three airlines would wind down operations in the coming months, although he declined to name the carriers.

However, Onyema said aviation fuel challenge is not limited to Nigeria alone, but emphasised that “ours is made worse because of the slump of naira against major currencies, especially the dollar.”

To address the problem, he said the federal government approved 10,000 metric tonnes of aviation fuel to the airlines, although he said the carriers were yet to access it.

He said the airlines hoped to start lifting the 10,000 metric tonnes of aviation fuel soon.

“That is why we ran to the government and the federal government has given us about 10,000 metric tonnes of fuel at the cost of N580 per litre in Lagos and about N607 per litre outside Lagos.

”This is not the only issue. Since the COVID-19 crisis, most airlines all over the world, including Nigeria have not recovered from COVID-19, except those whose countries have injected so much funds to assist them.

“This is no body’s fault. It just happened. Government has tried its best by giving us aviation fuel. Aviation fuel can take airlines out, not only in Nigeria but everywhere in the world.

”Some airlines outside Nigeria have closed down because of the effects of rising aviation fuel. If these things are not addressed in Nigeria, it can affect the bottom line of all airlines in Nigeria.

”We have come to realise that there is little or nothing the committee set up can do because this is as a result of foreign exchange and price of oil all over the world now.

“The fuel marketers will sell according to what they are paying. The cost of aviation fuel has increased, even in London and every other country. Our own is worse because of the increase in foreign exchange,” Onyema declared.

Meanwhile, other players like aviation fuel marketers, ground handling companies and catering services in their separate presentations, complained about the state of infrastructure at some of the airports even as FAAN said it had done a lot to improve on the facilities at the aerodromes in the last three years.

The vice chairman, Aviation Ground Handling Association of Nigeria (AGHAN), Mr. Bashir Ahmed said the state of infrastructure at most of the airports limits the turnaround time of operators at the apron.

He also said the scarcity of foreign exchange further reduces the operations and expansion of ground handling businesses in Nigeria.

He therefore appealed to the federal government to take a critical look at the challenges in the industry and device a mean to addressing them.

He applauded FAAN for installing two explosive detective scanning machines each at the warehouses of the ground handling companies in Lagos, saying it has gone a long way to enhance the performances of the handling companies in the industry.

“We still want to appeal to the federal government to grant waivers to handling companies on importation of ground handling equipment.

“Also, we need more scanning machines by FAAN to further improve our operations and create seamless services to our clients and the airlines.

“The Nigerian Civil Aviation Authority (NCAA) has also done well with its regulation of the industry. This shows that Nigerian aviation industry is changing,” he added.

In his presentation, a representative of fuel marketers, Mr. John Abegunde, urged the government not to step meddle in commercial related issues in aviation fuel supply, warning that it would majorly jeopardise safety in the system.

Abegunde said FAAN, NCAA and other government agencies should rather be more concerned about the stringency of the aviation fueling requirement.

He added that the fuel marketers subscribed to joint ownership of aviation companies, but kicked against the throughput arrangement, which he said may work against the industry growth in the future.

“We should be wary of portfolio investors who come in when there are opportunities in the sub-sector, but move out with their briefcases immediately there is a challenges,” he said.

For her part, the chairperson, Things Remembered, a catering service firm, Mrs. Adeola Omikunle, appealed to the government to address the myriads of challenges in the sector.

She also called for a change in the bureaucracy in order to hasten business decisions.

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