AIRLINES are grappling with severe financial issues, having amassed over N60 billion in loans for aviation fuel due to exorbitant Jet A1 prices, which are 270% higher than global averages, according to the Airline Operators of Nigeria (AON).
Board member Roland Iyayi indicated that these loans are necessary for airlines to maintain operations amid ongoing fuel price pressures on revenues.
Despite stakeholder suggestions, the government has yet to implement effective measures. This cost crisis hampers airlines’ abilities to meet obligations like the five percent ticket sales charge, and they must keep ticket prices stable despite operational losses.
United Nigeria Airlines’ Public Relations Officer, Chibuike Uloka, highlighted that Jet A1 fuel constitutes about 50% of their revenue. Recent price increases have intensified financial strain, affecting payroll and taxes.
Although the government offered a 30% debt relief and began negotiations on fair Jet A1 pricing, the financial burden persists, complicating the industry’s viability and prompting threats of flight suspensions amid a global fuel price surge linked to geopolitical tensions.