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Domestic airlines under the aegis of the Airline Operators of Nigeria have said that rising operational costs occasioned by aviation fuel price hikes, foreign exchange shortage, among others may push the base economy flight ticket to N100,000.
The spokesperson for local airlines/Chairman, United Airlines, Professor Obiora Okonkwo, made the disclosure during an exclusive interview with The PUNCH on Wednesday in Abuja.
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.
Consequently, 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.
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 N100,000, between N100,000 and N120,000 base price, even with Jet A1 fuel at N400 – N500. 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 said, “Something has to give in. It’s either the prices of fuel that come down or the prices of airfares go up from where they are. So far, the airlines have tried very much to work within the airfares as they are. All sides of the divide are aware that the airlines have done the best that they can do.
As Published on Punch
This post was written by Obiajulu Joel Nwolu.
The views expressed here belong to the author and do not necessarily reflect our views and opinions.