News
Aviation Fuel: Domestic Airlines Eye Ticket Price Reduction
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Anticipated increase in Jet A1 supply from Dangote Refinery may lead to reduced ticket prices for domestic airline passengers.
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Indigenous carriers have adjusted ticket prices over the past four years due to rising jet fuel costs.
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Managing Director of Aero Contractors, Captain Ado Sanusi, expresses optimism about potential price decrease if Jet A1 prices drop.
EKO HOT BLOG reports that there are indications that domestic airline operators might soon reduce ticket prices for passengers, thanks to the anticipated increase in the supply of aviation fuel, Jet A1, by Dangote Refinery.
Over the past four years, there has been a consistent rise in the price of jet fuel, leading indigenous carriers to adjust their operations by raising ticket prices.
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On February 20, 2022, all 12 scheduled airlines, including Air Peace, Aero Contractors, Arik Air, Max Air, Azman, Dana Air, Ibom Air, Green Africa, Overland, Rano Air, ValueJet, and United Nigeria Airlines, collectively agreed to raise airfares by 100 per cent to cover operational costs.
However, with the possibility of a significant decrease in the price of Jet A1 on the horizon, passengers may soon enjoy reduced airfares.
Managing Director of Aero Contractors, Captain Ado Sanusi, expressed that while the price of Jet A1 has remained stable, airlines would welcome a potential decrease in price.
Sanusi said: “As operators, we have no idea of the refinery where marketers buy Jet A1, but what we look at is the price. If the price drops, whether it is from Dangote refinery or refineries outside the country, we will appreciate it.
Aviation Fuel
”The price has been steady and that is what we use in making our projections. The price of jet fuel has been between an average price of N1,200 and N1,400 per litre.
On whether the imminent supply could result in a price drop, he added: “It depends on what price Dangote refinery sells Jet A1. If it sells below the market price, then, of course, it would drop price.
”However, if it is not selling below the market price, there won’t be a drop in price. Meanwhile, it is dependent on what crude oil is being sold to him and how much it costs him to refine. What we think will bring down the price of Jet A1 is the cost of freight.
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“If Port Harcourt, Warri and Dangote refineries could give us enough jet A1 for some time and we have steady prices, it will definitely have an impact on price. However, that won’t be possible in a few days. It has to be consistent for a few weeks and even months.”
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