Domestic airline operators sound alarm as liter of aviation fuel rises to N780

Nigeria's national airlines, under the umbrella of Air Operators of Nigeria (AON), have applied for Federal Government approval of the fuel surcharge.

AON said the approval of the fuel surcharge will help cushion the effect of the continuing increase in the exorbitant price of aviation fuel on airline productions.

This is just as the price of the commodity which was sold at N200 in February this year has risen to N780 today. The airlines in a statement addressed to the Chief Executive of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu and sent to the media by its Chairman, Alhaji (Dr) Abdulmunaf Yunusa Sarina, the operators called for the removing the 5% fuel surcharge they were paying to the NCAA.

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Avoiding declaration, traders identified the increase in the price of aviation fuel and the lack of access to forex and their subsequent impact on the cost of their operations until the last action.

"Nigeria's airline operators hereby seek your kind approval of the fuel surcharge as an ameliorative measure to cushion the effect of the continued increase in the exorbitant price of the Jet A1 on airline operations in the country In addition to the crippling effect of intermittent Jet A-1 shortages, the price has risen from N200 per liter in February 2022 to over N780 today.This has significantly increased airline operational costs by more than 130%, but airlines are unable to raise fares and also suffer from the unavailability of foreign currency to conduct their operations.

"In order to avoid backlash and total system shutdown, airlines hope to resort to the introduction of a fuel surcharge of between 25% and 40% of the NUC to compensate for the additional load caused by the increase in fuel, considering that kerosene accounts for approximately 40% of total operational expenses.”

The operators have therefore sought the understanding and support of the regulatory agency "in reconsidering and revising the decision that airlines are required to obtain approval for an initial period of three (3) months prior to the implementation of a fuel surcharge, with a waiver of the requirement that airlines pay a 5% fuel surcharge, entirely separate from the 5% ticket sales charge (TSC).

“Unless this is done, it will effectively mean that whatever airlines collect as a fuel surcharge to cushion the effect of high fuel prices will again be taken away by the NCAA. This will effectively amount to double jeopardy, as airlines will not be able to offset the additional cost that the fuel surcharge is meant to cover in the first place. »

The operators have therefore proposed that the taxes be based on the part of the fare due to the airlines less the fuel surcharge which is specifically intended to cushion the effect of the increase in the price of fuel and not on the total paid for the ticket including fuel surcharge (i.e. fuel surcharge shall be exempt from TSC).

"We therefore ask that you consider favorably and kindly allocate our proposal to help alleviate the suffering of airlines in the country given the current scarcity and ever-increasing cost of JetA1. C It is a common practice all over the world; especially in Great Britain, America and Singapore, among others.

Given the relevant and urgent nature of this issue, can we use this avenue to request an urgent meeting with airline CEOs to expeditiously address the issue?"