Airlines decry loss of $2m monthly to exchange rate volatility

Airline Operators have said that with the depreciation of the naira and the high cost of aviation fuel, Nigerians should be paying over N250,000 to fly from Lagos to Abuja.

The spokesperson of the Airline Operators of Nigeria, Prof Obiora Okonkwo, said this on Wednesday while speaking on the tasks ahead of the newly inaugurated Minister of Aviation and Aerospace Development, Festus Keyamo.

Okonkwo said the new Minister of Aviation has a lot of work to do to reform the sector and make it globally competitive. In recent years, the aviation sector has faced severe foreign exchange crisis and hikes in the price of aviation fuel.

The International Air Transport Association (IATA) said in June that $812.2m belonging to airlines had been trapped in Nigerian banks.

As a result of the forex crunch, many local airlines are unable to service their aircraft over dollar scarcity. Currently, flights from Abuja to Lagos cost between N53,000 and N70,000 for economy tickets on Air Peace and N60,000 to N66,000 on United Nigeria Airlines.

Okonkwo said on Arise TV, “If you think tickets are expensive then, you probably may be one of those who do not appreciate the patriotic sacrifices made by local operators.

“If we have to charge the fare the way the costs are changing every day, you should be paying not less than N250,000 to fly from Lagos to Abuja. I can tell you that from December last year to March of this year, there is no airline that may be losing a minimum of $2m every month.

“We are doing that because we know how the economy works. The naira redesign, the elections, the economic uncertainties and the only option that we had would have been to shut down the activities of air. And when you do, you could be accused of economic sabotage.

“We absorb those things and we wish Nigerians sometimes know about it. That is why I say when you are going to the airport to fly, go with roses, it could be white or red. It doesn’t matter and give to them from the ground crew to the operators and the cabin crew. We have absorbed a lot.

“The new minister has to work with other agencies of government to rip the sector of speculators. Could you imagine that we were planning a new fleet that is supposed to be coming in from next month at the point we were making our financials, fuel was about N600 to N650.

“We said worst case scenario will make it N700 or N800. One month after, with N950 you are chasing $1. If you need $1m, you might not see it in one month. Fuel from N650 to N850 within two months and we believe that this is artificial.”

He said there is no reason why aviation fuel should be delivered to the pump for more than N500, irrespective of the international price of fuel.

Techrectory, Business, Abuja

See also Advance Program by Publiseer Launches, Supporting Top Creators

Leave a Reply

Your email address will not be published. Required fields are marked *

What do you think?

Written by News Desk

Your daily pulse on mind-blowing tech, business, and economy news. Stay informed, stay ahead!

Airtel Nigeria CEO, (PHOTO; Sourced By Techrectory)

Airtel Nigeria CEO Discusses 5G at Technology Times Live

Nigeria’s daily crude production falls 12.8% to 1.29mbpd in July 2023