JET-A1 CRISIS: Airlines borrowing, cutting operations to stay afloat – Onyema

……urges Tinubu to review aviation taxes before more airlines collapse

Founder and Chief Executive Officer of Air Peace, Allen Onyema, Tuesday, lamented the effect of the sharp rise in aviation fuel prices, known as Jet-A1, on airline operating costs, saying operators are borrowing from banks to purchase fuel and cutting down on flight operations to stay afloat.

Since the outbreak of the Iran war, aviation fuel, which accounts for about 30 per cent of an airline’s operating costs, has significantly increased.

Onyema blamed middlemen in the fuel supply chain for the high cost of Jet-A1 in Nigeria, saying they drive up prices before the product gets to airlines.

The Air Peace CEO also expressed dissatisfaction with the five per cent Ticket Sales Charge, TSC, imposed on air tickets by the Nigerian Civil Aviation Authority, NCAA, urging President Bola Tinubu to set up an Aviation Taxes and Charges Review Committee to review the taxes, levies and charges imposed on Nigerian airlines.

Speaking on Arise TV, he said: “What is happening to Nigerian aviation is global. Since the advent of the Iran war, the aviation world has been adversely affected. You could see that airlines have been shutting down operations worldwide. Before now, the cost of aviation fuel rose by about 30 per cent to 40 per cent from what it used to be in Nigeria. Just because of 30 per cent, airlines abroad are going under. Also, many are struggling to survive.

“However, in my country, aviation fuel has gone beyond 250 per cent. At a time, it was about 300 per cent. From N900 naira a litre, at a time, to about N3,300. You do the mathematics and this is what the Nigerian airline is supposed to grapple with. No Nigerian airline is smiling now. We have all borrowed and borrowed; thanks to the banks that believe in the aviation industry, we have all borrowed billions just to buy fuel alone and fly. Maybe you used to spend about N3 million or N4 million to buy fuel for a flight,  it is now about N12 million, N13 million for the same flight.