With the price of aviation fuel increased by over 100% in Nigeria in the last year, going from N180/$0.43 per litre in February 2021 to N400/$0.96 per litre today, local airline businesses may go bust.
Aviation fuel is one of many rising prices amongst goods in Nigeria, accounting for 30-40% of aviation operational costs. With airline ticket prices already being high, they are due to increase even more due to higher fuel prices and operating costs. In November 2021, ticket airfares increased by 20-40%, and there are fears that a further price increase will result in a loss of customers.
United Nigeria Airlines, which was founded in 2020, has stated that the survival of its business is at risk, and while it has currently received little support from the government, it is hoping that this will change.
The Chairman of United Nigeria Airlines, Dr. Obiora Okonkwo, stated
“The aviation industry will collapse. The airline business is the live wire of the entire aviation value chain. If airlines don’t fly or the airlines are in comatose, NAMA (Nigerian Airspace Management Agency), NCAA (Nigerian Civil Aviation Authority) and FAAN (Federal Airports Authority of Nigeria) will not get the required revenue to run their operations.”
Dr. Okonkwo added,
“From the ticket, salaries paid to staff have increased, costs have increased but tickets have not increased that much compared to the cost of operations. Operators are looking for solutions to many of these things. We can’t talk about safety without looking at rising costs.”
United Nigeria Airlines, which currently serves just 7 destinations and 11 routes, has the vision to be the leader in the Nigerian aviation sector by “providing enhanced services, relationships and profitability through the provision of quality aviation services that exceed the expectations of our esteemed customers.”
With the rising USD – Nigerian Niara exchange rate and parts having to be imported from abroad, the former Special Advisor of Aviation to the President, Captain Shehu Usman Iyal, stated
“There is not a single bolt that you put in an airplane that you manufacture in Nigeria; you will have to buy abroad in dollars. Even the charges being paid to the government have to be a bit high because the government also buys airport equipment using the dollar.”
If current trends continue, this could be detrimental to Nigeria’s aviation industry.
What do you think the future holds for Nigeria’s Aviation Industry? Let us know in the comments below!