AON Warns of Potential Flight Groundings Amid Skyrocketing Aviation Fuel Prices
Airlines of Nigeria (AON) has issued a stark warning regarding the risk of grounding flights, citing an “unsustainable” increase in aviation fuel prices. The association argues that after weeks of absorbing these escalating costs, the industry has reached a tipping point.
In a letter sent on April 14 to fuel distributors, AON indicated that its members might suspend operations as early as April 20 due to the soaring prices of Jet A1 fuel. The communication was also directed to key government officials, including President Bola Ahmed Tinubu, Vice President Kassim Shettima, and Aviation and Aerospace Development Minister Festus Keyamo, highlighting growing public concern regarding the aviation sector.
In response to the widespread reaction to this warning, AON spokesperson and Chairman of United Nigeria Airlines, Obiola Okonkwo, elaborated on the situation during an appearance on Channels Television’s Politics Today. He emphasized that the decision was not made lightly but resulted from intense financial pressure and the depletion of operational buffers.
Okonkwo noted that even if no further developments occur before the weekend, some airlines might be forced to cease operations by Monday, an outcome he described as highly detrimental.
He explained that airlines have continued to fly despite rising costs, hoping to avoid sudden disruptions for passengers and the wider economy, but they can no longer sustain this approach. The price of Jet A1 fuel has surged from below N1,000 per liter to as much as N3,300 in certain areas within weeks, significantly increasing operational costs.
Initially, the industry held off complaints, anticipating they could absorb some expenses, particularly during off-peak seasons, but that buffer has now vanished. Okonkwo highlighted that aviation fuel constitutes the largest expense for airlines, and any further price hikes pose an immediate threat to their operational viability.
Moreover, he pointed to factors such as inconsistent pricing and supply constraints within the aviation fuel market, which compel airlines to purchase fuel at elevated prices depending on availability and location. While acknowledging global influences like oil price volatility and geopolitical tensions, he suggested that the structure of the domestic market exacerbates challenges for Nigerian airlines.
Urgent Action Needed to Avert Crisis
Okonkwo clarified that while global price fluctuations are beyond local control, the current pricing trends in Nigeria are unreasonable given the logistical complexities and profit margins. He argued that instances of artificial scarcity have further inflated fuel prices, forcing airlines to buy at market rates to maintain operations.
He cautioned that if the situation persists, multiple carriers may face closure within days, with many operators potentially failing to survive the weekend. Despite ongoing discussions with stakeholders in the aviation fuel supply chain and government officials, AON maintains that immediate action is essential to stabilize prices and avert widespread disruption in air transport services.
