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Indigenous Airlines’ Operating Costs Increases by 300%

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CEM REPORT, AVIATION | Indigenous airlines have called on the Federal Government to come to the aid of the operators to prevent them from collapsing, warning that the sub-sector may collapse in the coming months.

They noted that the operating costs of indigenous airlines have increased by 300 percent in the last two years.

According to the Chief Operating Officer of United Nigeria Airlines, Osita Okonkwo, while speaking with journalist in Lagos, he stated that a litre of Jet A1 (aviation fuel) was sold at N200 per litre, but regretted that the price had risen to N800 per litre in the local market.

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He explained that small-body aircraft like Embraer, CRJ, ATR, and Dash-8 aircraft require about 1,300 litres of aviation for an hour flight while middle-body aeroplanes like Airbus 319,320, MD 83, and Boeing 737 require at least 3,000 litres for the same hour of flight.

At the rate of N800 per litre, the small-body aircraft require N1,040,000 (one million and forty thousand naira) for an hour flight while the middle-body aircraft N3,900,000 (three million and nine hundred thousand naira) for the same journey.

Additionally, he said that the operators also pay different charges and levies to government agencies like the Nigeria Civil Aviation Authority, Nigerian Airspace Management Agency and the Federal Airports Authority of Nigeria (FAAN0, stressing that these charges further added to the operating costs.

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“Also, we don’t have access to foreign exchange. Forex is not available. The Central Bank of Nigeria (CBN) only gives about 20 to 30 per cent of your needs. You have to queue, yet have it on the move. Operating costs are escalating at a very high rate.

“There is a need for government intervention funds for operators. Governments all over the world are doing that. This is not too much for Nigeria to do for its own operators in the country.

“There is a need for government’s intervention in airlines in Nigeria. The United States and the United Kingdom have done that especially when there are big issues. That is not asking for too much. They have intervened in some companies and given forex to some companies, they should extend the same to the airlines in Nigeria.”

He also declared that the current low fares by airlines are not sustainable with the current situation of skyrocketing prices of aviation fuel and scarcity of foreign exchange.

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