Airlines borrow N60bn for fuel as operating costs rise

Nigerian airlines have amassed over N60 billion in loans from local banks to fund the acquisition of aviation fuel due to consistently high Jet A1 prices, according to the Airline Operators of Nigeria. Board member Roland Iyayi said the airlines are being forced to borrow heavily to operate as fuel costs continue to erode their revenues.

Iyayi blamed the government for failing to implement stakeholder recommendations to address the high fuel costs, despite the Airline Operators Collective threatening to shut down operations in February. The issue has hit Nigeria's aviation fuel prices 270% higher than in other parts of the world, with no government intervention to rectify the situation.

The fuel crisis has prevented airlines from remitting the five percent ticket sales charge to the Nigeria Civil Aviation Authority, potentially leading to complete shutdowns and halted economic activity. The Airline Operators Collective has also sought a 100 percent write-off of historical debts owed by airlines, but their request was misinterpreted as a demand for a 30 percent reduction in current debt.

Jet A1 fuel continues to account for about half of airlines' revenue, which is insufficient to make up for the escalating fuel prices, causing many airlines to operate at a loss.