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Abuja
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Abuja

Airlines seek implementation of 40% fuel surcharge as aviation fuel price skyrockets

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AIRLINE operators have asked the Nigeria Civil Aviation Authority (NCAA) to implement a 25-40 per cent fuel surcharge that will enable airlines manage troubling times.

Just yesterday, Aero Contractors announced a temporary suspension of flights from Wednesday, July 20, 2022.

Before then, both Ibom and Dana Air had apologised in advance to Nigerians, warning of flight delays due to closure of runway 18L/36R for a 90-day period and scarcity of aviation fuel.

Aero Contractors
An Aero Contractors aircraft. Credit: ThisDayLive

In a letter signed by the president of the Airline Operators of Nigeria (AON), Alhaji Abdulmunaf Yunusa Sarina, on July 18, 2022, he detailed the extent of the cost of aviation fuel on airlines’ operations.


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The letter said that the price of Jet A1 (aviation fuel) had risen from N200 per litre in February 2022 to over N780 today, noting that operational cost had, by implication, risen by over 130 per cent, with airlines unable to increase fares. It argued that a fuel surcharge included in ticket fares would go a long way in alleviating the pains faced by the airlines in striving to stay afloat.

It read, “In order to forestall a backlash and total shutdown of the system, airlines are hoping to resort to an introduction of a fuel surcharge of between 25 per cent 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.”

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It went further to request an immediate review of the decision that airlines are required to obtain approval for an initial three months before implementation of a fuel surcharge.


Travellers at a Nigerian airport   
Travellers at a Nigerian airport    Credit: FAAN/Twitter

It also sought a waiver of the demand that airlines pay an additional five per cent on the fuel surcharge entirely separate from the five per cent on ticket sales charge (TSC).

In a related development, the airline operators berated the Federal Airports Authority of Nigeria (FAAN) for closing the 18L runway on short notice.

It also questioned the airport landlord for failing to ensure that the contractor works at night, saying the move was causing unsustainable additional operating costs to the airlines.

The AON letter read, “The AON welcomes the effort by FAAN to install runway lighting on Runway 18L, at last. However, international best practice for such critical airfield infrastructure projects is for
the airport operator to enter into discussions with all affected parties to arrive at an optimal arrangement that allows the work to be done, while limiting the inconvenience, economic impact and safety implications on all concerned. In this instance, FAAN failed to do this.

”FAAN is aware of the current existential threat of runaway aviation fuel prices to the domestic airlines. The closure of the main domestic runway of Murtala Mohammed Airport (MMA) automatically adds an additional 10-15 per cent more fuel costs per sector into and out of MMA, based on the additional flight and taxi time incurred as a result. The airlines have already felt these additional costs within the first week of the closure of the runway. This unnecessary burden is unsustainable for a 3-month period on the airlines.

“AON contends that in line with international best practice, 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 agreement should have been reached with the runway users on what time window would allow this.”

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The operators alleged that the runway was closed without any evidence of work happening there, and the closure was another cause of domestic flight delays being experienced in the country.

However, the FAAN acting general manager, Corporate Affairs, Faithful Hope-Ivbaze, who responded to the airlines’ letter on July 19, 2022, swiftly denied that the runway had been abandoned with no work being done there.

Work ongoing on airport runway. Credit: FAAN

Hope-Ivbaze shared a progress report on the runway, noting that work had begun since the July 8, 2022 with the digging of the cable trenches. Her latest report on July 18 stated that the installation of the threshold 18L had commenced.

It read, “Digging of cable trenches in progress.

Workers on airport runway. Credit: FAAN

“Installation of the threshold 18L has commenced with cutting and excavation of the secondary cable trench and fixing of fittings.

“Marking of the taxiway centreline, stop-bars and No Entry lights on taxiway C has commenced and is almost completed,” the FAAN scribe responded.

Author profile

Experienced Business reporter seeking the truth and upholding justice. Covered capital markets, aviation, maritime, road and rail, as well as economy. Email tips to jolaoluwa@icirnigeria.org. Follow on Twitter @theminentmuyiwa and on Instagram @Hollumuyiwah.

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