The Chief Operating Officer of United Nigeria Airlines, Mr Osita Okonkwo, said the operating costs of indigenous airlines have increased by 300 per cent in the last two years.
Speaking with some select journalists in Lagos, Osita pointed out that when the airline commenced flight operations in 2021, a litre of Jet A1 (aviation fuel) was sold at N200 per litre, but regretted that the price had risen to N800 per litre in the local market.
More on the challenges: Okonkwo said that small-body aircraft like Embraer, CRJ, ATR, and Dash-8 aircraft require about 1,300 litres of aviation for an hour flight while middle-body aeroplanes like Airbus 319, 320, MD 83, and Boeing 737 require at least 3,000 litres for the same hour of flight.
At the rate of N800 per litre, the small body aircraft require N1,040,000 for an hour flight while the middle body aircraft N3,900,000 for the same journey.
He explained that the operators also pay different charges and levies to government agencies like the Nigeria Civil Aviation Authority, Nigerian Airspace Management Agency and the Federal Airports Authority of Nigeria (FAAN0, stressing that these charges further added to the operating costs. He said:
- “When we started operations in 2021, a litre of fuel was being sold for N200 or thereabout and suddenly, it moved to N500 per litre in February 2022. Now, we are buying a litre of fuel at N800 per litre or N790, depending on where you are buying from.
- “Also, we don’t have access to foreign exchange. Forex is not available. The Central Bank of Nigeria (CBN) only gives about 20 to 30 per cent of your needs. You have to queue, yet have it on the move. Operating costs are escalating at a very high rate.
- “There is a need for government intervention funds for operators. Governments all over the world are doing that. This is not too much for Nigeria to do for its own operators in the country.
- “There is a need for government’s intervention in airlines in Nigeria. The United States and the United Kingdom have done that especially when there are big issues. That is not asking for too much. They have intervened in some companies and given forex to some companies, they should extend the same to the airlines in Nigeria.”
Need for action: Okonkwo called on the Federal Government to come to the aid of the operators to prevent them from collapsing, warning that the sub-sector may collapse in the coming months.
According to Okonkwo, operating costs had continued to climb for the carriers in the last year, stressing that the airfares are being underwritten from other sources by most of the airline operators.
He also declared that the current low fares by airlines are not sustainable with the current situation of skyrocketing prices of aviation fuel and scarcity of foreign exchange.
What you should know: He dismissed the claim in some quarters that the airlines fixed prices of airfares, saying that the sector is competitive and would remain so.
- On the Spring Alliance six of the domestic airlines formed in 2021, Okonkwo said the alliance had helped reduce costs for operators as the airlines airlift each other’s passengers in case of any operational challenges.
- Besides, he stated that United Nigeria Airlines had airlifted about 800,000 passengers within the last two years of operations, adding that the carrier still maintained its fleet of four aircraft of CRJ.
- He, however, informed that plans were on to add more aircraft to its fleet, assuring that the airline would continue to offer qualitative services to the flying public.
United Nigeria Airlines does not own CRJ aircraft but Embraer 145s