Passengers are shunning air travel while companies, organisations and Associations are reverting to online meetings instead of physical meetings and travelling due to the increase in the price of aviation fuel, also known as, Jet A1.
The hike in Jet A1 has made airline tickets go up with passengers paying more than N250, 000 for a return Lagos-Abuja ticket; while Lagos-Kano return is between N200, 000 and N300, 000 depending on the time of booking and the Airline.
Ipledge2nigeria gathered that Jet A1 had reached over N903 per litre in some states in the Northern parts of the country as of Wednesday, thereby, making air travel very expensive and above the middle class.
According to a leading airline operator, Jet A1 sold for N880 per litre in Kano while it sold for N780 in Abuja and N740 in Lagos.
However, according to a document made available to ipledge2nigeria, it was gathered that flight arrival and departure had slowed down at terminal 2 of the Muritala Muhammed Airport (MMA2), Lagos.
It was gathered that while the terminal recorded 187 flight departures in the first week of July 2022, the terminal recorded a lower figure of 172 in the first week of August.
Also, arrivals dropped from 225 that was recorded in July to 140 in August, thereby, confirming aviation’s stakeholder’s fear of a drop in flights due to the high cost of tickets that was influenced by the hike in aviation fuel, foreign exchange and other operating costs.
This increment in the price of Jet-A1, according to airline operators, has eaten up their profit, thereby, making profitability very slim, as well as, passengers seeking alternatives to air transportation.
For instance, a return ticket on Max Air, Jos to Lagos goes for N280, 000 and a return ticket from Port Harcourt to Kano goes for N306, 000. Lagos to Katsina goes for N148, 000 while a return ticket from Abuja to Lagos is between N148, 000 to N155, 000.
Kaduna to Lagos flight on Azman Air is between N150, 000 to N170, 000 while the return ticket from Maiduguri to Abuja for the same day is N140, 000 and Abuja to Birnin Kebbi goes for N150, 000.
Abuja-Kano flight on Max Air is between N90, 000 and N130, 000; while it is between N74, 000 and N80, 000 on Air Peace. Also on Max Air, Abuja-Maiduguri is N90, 000 and Lagos-Kaduna on Azman Air for a Wednesday flight, N130, 000. A one-way Lagos-Abuja fare is now N80, 000 and could be as high as N150, 000 if the travel date is in 24 hours.
Air Peace return ticket from Abuja-Kano is between N140, 000 and N160, 000 and one-way, N78, 000. A return from Abuja-Gombe is N150, 000 and one-way, N75, 000. For Abuja-Port Harcourt, a one-way ticket is N100, 000; Abuja-Lagos, between N75, 000 and N100, 000.
Air Peace flight from Lagos to Enugu on Thursday showed that it costs N150, 000 for a one-way ticket.
Ipledge2nigeria gathered that the increase in the price of Jet A1 has made fuel constitute 70 percent of airlines’ operating costs as against 40 per cent before the global energy crisis.
Also, aviation fuel recorded a price hike of 268 per cent between January 2022 and April 2022, moving from N190 to between N750 to N900 in six months and this has made domestic airline carriers in Nigeria threaten to shut down their operations, citing rising jet fuel costs and the increasing cost of operation.
The stakeholders, in a separate chat with ipledge2nigeria, however, feared that the aviation sector may shut down in the next few years if the increase in price, aviation fuel and high exchange rate are not arrested.
Speaking to ipledge2nigeria, the director of Research, Zenith Travel Consult, Olumide Ohunayo, said commercial airline operators have started cutting down on schedules because the nation’s airports are empty and being deserted by passengers due to price hikes.
According to him, passengers have, as well, reacted to the increase in price and cut down on air travelling by either embracing technology or other means of transportation.
He said, “patronage is a bit low now because the ticket price is not coming down. It is increasing daily and this is because aviation fuel is about N903 and we are in the summer, the Russia Ukraine crisis that led to sanctions which haven’t been lifted leading to fuel crisis and we still have the naira exchange rate to dollar that hasn’t shown any hope of reducing.
“We have still not met the credit obligation to foreign airlines about the trapped funds to airlines so we have issues that make us feel any favourable cost to Nigeria due to all these factors. And since it’s not refined in Nigeria we can’t eliminate the exchange rate”
“Now, the airports are empty, airlines are reducing schedules and aircraft size. This is a reflection of the dwindling numbers of passengers at the nation’s airports which the airlines are reacting to another not to have some losses and we know that airline like Air peace has just stopped Johannesburg routes and foreign airlines are also reducing flights and giving strong conditions that tickets not originating from Nigeria can no more be sold in Nigeria so all these hard positions of the airline are based on how they can survive this harsh operating environment led by fuel prices and increasing loss of the naira.”
Speaking on what to bring patronage to the airports, Ohunayo, said, “What we can do is to encourage the passengers by showing empathy and explain that prices are conditions of oil markets and assured them safety will always be the priority.
Passengers have reacted to the new prices and flights have dropped. What we can only do is that we have to also see how we can keep some of those routes alive and not shut them down completely for those who want to fly for important meetings because instead of having conferences out of their destinations, organizations are reverting to zoom meetings that were on during COVID-19. This is a difficult time for the industry.
“Again, we can look at how the agencies can help with charges during this period, even surcharges on Jet A1 can be removed so that tickets can come down. These are ways to encourage more people to come back to the airports and probably there will be fare drops and possible promos from the airlines.
On his part, the former military commandant, Murtala Muhammed International Airport, Lagos, Group Capt John Ojikutu (rtd), said prices will continue to go up until Nigeria starts refining these products locally.
According to him, in the ’90s, aviation fuel was refined locally and transported through pipelines while the exchange rate was about N80 to a dollar.
He, however, said until Nigeria start refining locally and the foreign exchange hike go down because aviation business is done in foreign currency, the industry will continue to witness an increase in price and may shut down.
He said, “In the ’90s when the price was down, we are transporting fuel from mosimi through pipelines and not with tankers. The price cannot go down because if the dollar has been increasing from N80 in 2000 to what it is today and the refinery not working how do we bring down the price?” He asked rhetorically.
He stated further, “the component of commercial aviation anywhere in the world especially in Nigeria is in dollar so, if we cannot change all these components, there is nothing we can do. Also, let me say this 50 to 70 percent of people travelling are government and corporate officials and that are the ones buying tickets because very few people use their money to pay for tickets so let’s assume that the travelling public are generally 5 million and paying N50, 000, if the price is increased to N100, 000, passengers will drop by 40 or 50 per cent of that figure.
“The airline operators are not losing anything in terms of earning but possibly losing to hike in fuel price and the only way to address fuel is to refine fuel in this country. That’s the only way out but if we are still bringing fuel into this country under the same condition, we are not moving anywhere and am worried that the industry can collapse in the next two or three years,” he concluded.