June 11, 2023

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This Week in the Aviation Sector

  • Closed runway increase cost.
  • AON appeals for fuel surcharge wavier.
  • Aviation fuel scarcity affects fight operations.

CEM REPORT | Airline Operators in the country have said there will be major disruptions of flights due to scarcity of aviation fuel, also known as JET-A1.

The operators under the aegis of Airline Operators of Nigeria (AON), said the current situation would lead to cancellations and prolonged delays across all airports in the country.

This is according to a statement by Obiora Okonkwo, spokesperson, AON.

This is to notify the members of the public, especially, consumers of air transport services in the country, that the aviation sector has been hit by a major crisis with the acute scarcity of aviation fuel otherwise known as Jet-A1,” the statement reads.

“For this reason, there will be major disruptions in scheduled flight operations, including cancellations and unnecessary delays across all airports in the country.

“This is a foreseen but unintended consequence of the aviation fuel scarcity in the country.”

AON added that “it is committed to rendering seamless and uninterrupted air transport service across the country”.

This is the second announcement on the disruption of services over the scarcity of aviation fuel in three months.

[READ ALSO] Aero Contractor Suspends Passager Flight Operations

In May, AON said the scarcity of fuel negatively impacted the seamless conduct of air transport operations and “would lead to flight rescheduling, and, or, cancellations.”

It planned to suspend operations — but shelved it after intervention by the house of Representatives.

In June, Allen Onyema, AON’s vice-president, said at least three domestic airlines were on the verge of shutting down operations due to the soaring price of the commodity.

Recently, AON sought the Nigeria Civil Aviation Authority (NCAA), to adopt the new 25 to 45 percent regime on aviation fuel consumption as part of measures to cope with the surge in the price of aviation fuel.

They said besides the fuel scarcity disrupting scheduled operations, the prevailing market rate of N690 to N714/litre is unsustainable.

Chairman of AON, Abdulmunaf Sarina, in a memo to NCAA, lamented that in addition to the crippling effect of intermittent shortages of Jet A1, the price rose from N420 per litre in February 2022 to over N780 last week.

“This has greatly increased the operational cost of airlines by well over 130 per cent. Yet, airlines are unable to increase fares and suffer the unavailability of foreign exchange to conduct operations.

“To forestall a backlash and total shutdown of the system, airlines are hoping to resort to introduction of a fuel surcharge of between 25 and 40 per cent of Neutral Unit of Construction (NUC) as a way of offsetting the additional burden brought about by increased fuel cost, bearing in mind that jet fuel accounts for about 40 per cent of total operational expenses.”

AON in the memo also appealed for a review of an extant rule that airlines are required to obtain approval for an initial three months before implementation of a fuel surcharge and waiver of the demand that airlines pay an additional five per cent on the fuel surcharge.

Unless this is done, it will mean, in effect, that whatever is collected by the airlines as fuel surcharge, to cushion the effect of the high fuel price, will be taken away once again by NCAA. This will amount to double jeopardy as airlines will be unable to offset the additional cost, which the fuel surcharge is meant to address in the first place.”

In another report the Federal Airport Authority of Nigeria (FAAN), closed the Runway 18L at Murtala Muhammed Airport Lagos, which the AON alleged to be without due notice.

The airline operators said the closed runway for purpose of airfield lighting repairs, has remained closed for a week without any work done on the critical facility adding that the closure adds an additional 10 to 15 per cent more fuel costs, based on additional flight and taxing time incurred.

The letter reads: “AON contends that in line with international best practices, runways of airports are only closed when there is no other option. For infrastructure projects, such as this one on 18L, to limit the impact on flight operations, FAAN ought to have ensured that the contractor does the work at night when the runway is not in use. If there is an absolute need for work to be done during daylight hours, then an agreement should have been reached with runway users on what time window would allow this.

“For the major airport in Nigeria, AON notes with disappointment that Runway 18L has been closed for a week now, with no evidence of any work going on. Yet the airlines have been burdened with huge but unnecessary additional costs and flight delays. Surely, this situation is not in the best interests of the industry.”

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