Aviation blames cost of aviation fuel on skyrocket flight ticket

By allcitynews.ng

As fly ticket keep rising almost at every hour, leadership of avaition industry has blamed the increment on aviation fuel known as Jet A1.

They blamed the fuel price rise which reached N275 per litre from N220 barely two weeks ago as reason for high cost of flight.

There are however fears that some of the independent marketers may attempt to engage in shady deals by selling contaminated fuel to their clients in order to remain in business and sell at profitable rates.

This is as the Federal Government has been called upon to ensure local refining of the product in order to ensure airlines get the product at cheaper rates and make air tickets more affordable to the travelling public.

A source close to one of the airlines told our correspondent on Tuesday that the product goes for between N255 per litre and N275, depending on the airport and the volume of litres an airline may want to purchase.

Also, investigation conducted by our correspondent revealed that the product is cheaper in Lagos and most southern states, but relatively higher in most northern airports.

Investigation further revealed that as at two weeks ago, the product went for between N220 and N250, but increased to the new rate last week.

A source close to one of the airlines, but who didn’t want his name in print said this was the right time for airline crew to watch out for “fake fuel” from the independent marketers.

“Due to this price, I want to advise our colleagues to watch out for fake fuel. Please ensure your crew particularly pilots and engineers comply with proper fuel test and not leave the responsibility to the vendors alone,” the source said.

Besides, Mr. Olumide Ohunayo, Director, Research, Zenith Travels, lamented that aviation fuel alone consumes about 30 to 40 per cent of airline expenses.

Ohunayo in an interview with our correspondent in Lagos, however, explained that the sub-sector was deregulated, but noted that in order to cushion the effect of the high price, the Federal Government should repair the Nigeria National Petroleum Corporation (NNPC) underground pipe between Ejigbo and the Lagos airport.

He explained that for the airlines to benefit from the product’s pricing, they either buy in bulk or edge, which he said required lump sum.

He observed that passengers may bear the brunt as airlines would further increase airfares, while same passengers may witness flight delays and cancellations.

Already, a one-way ticket on Lagos-Abuja route goes for between N60,000 and N91,000 on most airlines.

Just on Sunday, one-way ticket from Abuja to Lagos went as high as N120,000.

To encourage the operators and reduced fares, Ohunayo also canvassed some tax waivers for operators from the government agencies.

He said: “Aviation fuel is deregulated in Nigeria. Unfortunately for the industry, 30 to 40 per cent operation expenses come from aviation fuel. The only way we can benefit from aviation fuel pricing is if you have a bulk purchase or edging and for you to edge, you must have enough money to edge fuel or you belong to an association whereby it is a policy of the higher the number you buy, the lower the price.

“Airlines in Nigeria don’t have any alliance or involve in any serious organisation or association. So, every airline deals with importer on an individual basis. They bear the brunt of the increase in fuel. Once there is any increase in fuel, the first set of people that get the fire are the passengers; the tickets go up, flight may be delayed because at times, it may not be available and if it is available, suppliers may be demanding for cash because of the cost of the product.

He also feared some of the independent marketers may engage in shady deals to remain in business and challenged the Nigerian Civil Aviation Authority (NCAA) and other organisations involved in the industry to set up a testing laboratory to prevent fuel contamination and ensure product’s compliant with modern equipment.

He added: “Yes, it is possible to have fuel contamination. At the end of the day, NCAA will need to work with the suppliers themselves. The suppliers are the ones that should self-regulate before the regulator comes in. NCAA can only come in to ensure supervisory and oversight on what it has done. The industry generally supports self-regulation. You saw the Azman case.

“We expect the Joint Users Hydrant Installation (JUHI), a committee of aviation fuel importers to set up a self-regulatory body within themselves to ensure that the fuel supply taken to the industry has not been contaminated. Once the price increases, there is the tendency to actually do that and this can affect safety.”

Besides, Capt. Ibrahim Mshelia, the Chief Executive Officer (CEO), West Link Airlines, like Ohunayo, said fuel contamination was possible, but insisted not common in the sector.

Mshelia observed that contamination may be as a result of rain, foreign objects or fluids in the hydrants.

Besides, he called on the government to encourage competition in the sub-sector, secure local refining of jet A, remove totally duty on aircraft and spare parts for all Air Operators’ Certificate (AOC) holders and aircraft certified for commercial purposes.

He added: “The total removal of Value Added Tax 9VAT) and slots for forex to be granted every commercial operator to buy dollars and fund foreign payments, spare parts and training among others. Currently, those who get, sell to airlines at black market rate and that is not progressive at all.

“Airlines need the forex as necessity particularly for safety enhancement through spares and even foreign periodic C-checks where facilities don’t exist locally. It’s a serious appeal that government considers airlines before forex bureaus.

“Airlines need no introduction of what they are to the economy. If these are checked, tickets will be cheaper. There are other ways to further reduce running cost for the agencies and further reduce the burden. There are many ways to juggle and get better results while still keeping the employments. Government should act now.”

Also, Grp. John Ojikutu, aviation analyst, said it was the duty of NCAA to ensure compliance with the quality of fuel to be supplied to airlines.

Ojikutu also appealed to NCAA to ensure establishment of a laboratory by JUHI at the airports, especially at the Lagos Airport to test and ensure that the fuel discharged into aircraft met the required standard.

“How regular has the NCAA been conducting safety audits on JUHI? Except the NCAA does the safety audits on JUHI and ensures it complies with the various safety recommendations, fuel quality assurance cannot be guaranteed,” he said.