Eko Hot Blog reports that the Airline Operators of Nigeria (AON) have raised alarm over the increasing operational costs as aviation fuel prices surge beyond N1,300 per litre.
The spokesperson for Airline Operators of Nigeria, Obiora Okonkwo, expressed deep concern in a statement released on Friday, highlighting the urgent need for government intervention to avert the potential collapse of several airlines.
The airlines emphasized the adverse impact of fluctuating forex rates and the skyrocketing cost of aviation fuel on operational planning and stability within the aviation sector.
Okonkwo, who also chairs United Nigeria Airlines, revealed that the unexpected spike in aviation fuel prices, rising from N700 per litre, coupled with an exchange rate of N1400/$1, has resulted in significant financial losses for airlines.
In the statement, Okonkwo pointed out the challenges faced by the airlines, stating, “We are making losses on factors that are beyond our control. We are not only faced with the problem of scarcity of dollars; even the aviation ecosystem is feeling the heat. Handling companies have increased the cost of their services, airports have increased their charges, and those that service the aircraft have also increased the cost of their services.”
Passengers who had purchased tickets at lower rates are now being transported at the current elevated costs, adding to the financial strain on the airlines.
Okonkwo highlighted the broader economic impact, noting that many businesses in Nigeria are experiencing reduced returns, resulting in fewer essential passengers during peak and off-peak seasons.
“Air travel is a catalyst for economic development. There should have been government engagement with airlines at different levels. Airlines do not have special forex allocation; so, they buy at the same place traders who trade in Brazilian hair, textiles, and others buy,” Okonkwo explained.
He also raised concerns about the declining state of the aviation industry, stating, “Our passion to remain in this business is being eroded. We are at the point of oxygen supply. Some airlines are going into a coma. Our equipment is diminishing.”
Okonkwo emphasized the challenges faced in expanding the fleet due to country risk considerations by aircraft owners.
Despite some airlines depositing money with the Central Bank of Nigeria, obtaining the necessary dollars for operations remains a significant hurdle.
The aviation industry, a vital component of economic development, calls for urgent government intervention to address the escalating challenges faced by airlines.
As operational costs continue to rise, the viability of the sector and the economic contributions it brings are under threat.
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