Domestic airline operators under the umbrella of the Airline Operators of Nigeria have declared that the rising operational costs occasioned by aviation fuel price hikes, foreign exchange shortage, among other reasons have the potential to push the base economy flight ticket to ₦100,000.
The spokesperson for local airlines/Chairman, United Airlines, Professor Obiora Okonkwo, gave this hint when he spoke in an interview with reporters on Wednesday in Abuja.
Africa Today News, New York reports that aside from the lingering aviation price hike crisis, the airline chief said local operators were being compelled to source foreign exchange from the parallel market at high rates due to a lack of adequate supply from the Central bank of Nigeria via the commercial banks.
For that reason, he said an increase in the base economy flight ticket to at least N100,000 might be inevitable for all domestic airline operators if the current situation persists.
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Okonkwo said, ‘Obviously, it is inevitable. I can tell you that all the airline operators, in the last three months, have been losing money, a huge amount of money. There is too much stress on the operational fronts for them to break even. Even if the aviation fuel is made available, there must be a review to reflect the minimal operational cost. We are offering patriotic services to the nation and understand the essential part of it. We are part of this economic development process in Nigeria but it is coming at a very huge sacrifice.’
He added, ‘Nothing less than ₦100,000, between ₦100,000 and ₦120,000 base price, even with Jet A1 fuel at ₦400 – ₦500. That is what it is.’
In this regard, he added that meetings with the CBN ad yet to yield any positive result in the provision of adequate forex.
He further stressed the need for the aviation industry to be seen as an essential service that should have special consideration in financial matters.
Okonkwo clarified that the operators have no joy in increasing fares but it has become necessary for them to avoid shutting down and running out of business.
He added, “In the industry, it is expected that you will gain some here and lose some here but the biggest challenge indigenous operators are having is that the cost of everything is high. You source money from the commercial bank rates. You source money from the black market. No moratorium for your loans and the banks and AMCON are quick to jump on you.”
Corroborating this view, the Chief Operating Officer, Ibom Air, Mr. George Uriesi, said local airlines had reached a point in their operational cost whereby ‘something has to give in.’
Uriesi, a former managing director of the Federal Airports Authority of Nigeria, said it was difficult to tell how long the local carriers would be able to continue with the high operational cost.