Tuesday 7 June 2016

Domestic airlines may raise fares due to hike in aviation fuel

Domestic airlines in the country may increase the fares payable on air ticket following the recent hike in the price of aviation fuel, popularly known as Jet-A1.

According to them, a circular informing them of the increase in the price of aviation fuel from N115 per litre to N150 was issued in Lagos last week.

This is coming at a time when more foreign airlines are contemplating to halt their operations in the country following their inability to repatriate earnings to their various home countries.

The domestic and foreign carriers made their challenges known to the Minister of State for Aviation, Senator Hadi Sirika, during two separate meetings at the headquarters of the ministry in Abuja on Monday.

Speaking on behalf of the domestic carriers, the Chairman, Airline Operators of Nigeria, Capt. Noggie Meggison, said the hike in aviation fuel price was in contrast to what was obtainable in other parts of the world, where the cost of Jet-A1 had been falling.

The AON delegation had almost all the chief executive officers of the domestic carriers in attendance at the meeting.
Meggison said, “The pricing of aviation fuel is something that is mind-blowing. They just endorsed a circular last week in Lagos increasing fuel from N115 to N150. The aviation industries worldwide are declaring profits because of the aviation fuel that has come down in their climes; but in Nigeria, the price of aviation fuel is going up.
“We are paying N150 per litre and that is why we pray that the minister should be please assist us in looking into this matter in order to cut down the bills that will be passed on the customers.”
The AON further stated that many airports in Nigeria lacked the capacity to operate in the evening, adding that most of them close by 6.30pm.

Meggison cited the Benin airport as an instance, which he stated had no light on its runways, adding that once it was 6.30pm, it would be practically impossible for flights to land at the facility.
“I must say that 70 per cent of our delays and cancellation of flights during the harmattan and the rainy season are due to issues with navigation aids. In the last harmattan period, I know that the Calabar airport was closed for about three days because of poor visibility.”
The local airline operators also argued that they should receive greater priority than their foreign counterparts with respect to accessing foreign exchange.

They told the minister that accessing forex from the parallel market was highly detrimental to their ventures and stressed that they wanted to access the foreign currency from the Central Bank of Nigeria directly.

In response, Sirika constituted two separate teams made up of himself, ministry officials and members of the AON to dialogue with the CBN and the Nigeria Customs Service over issues of forex and waivers on imported spare parts for the airlines.

The minister said he had placed a call to the CBN governor on issues of forex, adding that the government would play its role of creating a level playing field for both domestic and foreign carriers in the sector.

Sirika said Jet-A1 would be made available before the end of the year when some of the refineries would come on stream in full.

He also explained that the government was reviewing most of the Bilateral Air Service Agreements it entered into with other nations in the past.

The Area Manager, International Air Transport Agency, South West Africa, Mr. Samson Fatokun, who led representatives of the foreign airlines to a meeting with the minister, said the non-repatriation of over $591m to their home countries might force most of them to stop operating in Nigeria.

Responding, the minister stressed that the issue was already before the Presidency and would be looked into as soon as possible.

Almost all the foreign carriers operating in Nigeria were at the meeting.

Credit: Punch

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